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The PSA Group and Fiat Chrysler Automobiles are considering a partnership to share the investment in the construction of cars in Europe, according to people familiar with the discussions.
The French automaker and its Italian-American counterpart have engaged in preliminary discussions to collaborate on a "super platform" – the basic foundation of an automotive model – in order to reduce their investment costs in the highly competitive region, said officials be named as the matter is private. Preliminary talks could be announced by the end of the first half, said one of the officials.
PSA President and CEO Carlos Tavares said earlier this month that his company was poised to seize growth opportunities less than a year after the integration of Opel and Vauxhall brands purchased At General Motors Co. Fiat Chrysler's CEO, Mike Manley, said at the same time that he would "clearly look into" an agreement that would strengthen the Italian-American automaker, including an alliance or merger.
Any potential partnership will likely include sharing of investments in new electric cars, the citizens said. According to Bloomberg NEF estimates, electric vehicle sales are expected to increase by around 60 million euros annually by 2040 worldwide.
"No automaker alone can afford the size of the investments needed to develop platforms for the kind of smart, hybrid and connected vehicles that will be on the road in the years to come," said Carlo Alberto Carnevale Maffe , professor at the Bocconi University of Milan. . "Discussions between PSA and FCA, as well as those of BMW and Daimler, clearly show that the sector needs to find a new balance of competition on end products and services, taking advantage of the inevitable cooperation in technology and infrastructure development. Support."
The partnership could eventually become a broader combination in the future, although the focus is currently on limited cooperation, said two of the interviewees.
A spokesman for PSA declined to comment and referred to Tavares' comments to the Wall Street Journal on Saturday, in which he said the company was not targeting a "specific" partner and was not taking part in "deep negotiations". "to find a link. -up.
"We have ongoing discussions with our partners," Tavares told the WSJ in response to a question about potential discussions with Fiat. "There is no specific purpose – no specific negotiation, thorough and ongoing."
In February, Fiat and Peugeot expanded their cooperation in the field of light commercial vehicle vans with the brands of the French manufacturers Opel and Vauxhall.
Car manufacturers are increasingly joining forces to share investments as the auto industry is facing a technological disruption caused by electric cars and autonomous cars. The stricter emission rules imposed by European regulators also force the industry to move away from traditional combustion engines.
Automakers are increasingly squeezed by near-recession valuations, while cash-rich Silicon Valley giants, like Alphabet Inc., are implicating in data access future cars to l & # 39; industry. Ford Motor Co and Volkswagen AG are now working to create a broad-based partnership that includes commercial vehicles and autonomous driving, while BMW AG and Daimler AG are collaborating on various shared and autonomous driving efforts.
Fiat Chrysler President John Elkann agrees with former CEO Sergio Marchionne that the auto industry needs to consolidate to end the duplication of investment. Marchionne said in his 2015 "junky confession capital" speech that the auto sector was wasting weekly 2 billion euros ($ 2.2 billion) in product development costs and costs. tooling shareable.
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