This deal exists basically because with it, PSA will have finally its door open to the US and Canadian market, while FCA will have the EV platforms and technology that it needs to make the transition from the ICE to the EV era.
While this is the positive side, there is one big downside to it: While the Premium brands of the new group shouldn't have any problems co-existing (DS, Alfa Romeo, Maserati and Jeep all have their distinct target audiences), the same can't be said regarding the mainstream market, especially in Europe.
If PSA was still trying to figure out how to diferentiate Opel from Citroen and Peugeot, now how can they do it with yet another brand (FIAT) to deal with?
And to have it approved, both sides left garantees that no factories would be closed...
Well, that is for the new CEO of the Group, Carlos Tavares, to solve, let's just look at what this might bring, when it comes to plugins, in the new PSA-FCA Group:
Peugeot, Citroen and DS - With a large door for the North American market now open, they can now bet on larger cars and SUVs, so the current 508 PHEV should see its way into North America in the first wave of Peugeot's to land on the other side of the pond in decades, possibly followed by the DS7 PHEV, the Citroen C5 Aircross PHEV and a future Citroen C5(6?/7?) PHEV.
But then again, super-size is the rule in North America, so i wouldn't be surprised that these brands now had the confidence to go one up in their lineup, and create a large 7-seater SUV, something like a Peugeot 7008 PHEV/BEV, DS 9 PHEV/BEV and a Citroen C7 Aircross PHEV/BEV.
On the other end of the lineup, maybe the two mainstream brands could use their own version of the FIAT Centoventi-based Panda? It is still a few years away, but the original concept looks promising...And the Free2Move car-sharing fleet needs fresh blood, doesn't it?
Opel / Vauxhall - An entry in the US market might not be in the cards of the German maker, but i think it could make sense, if done properly, as the fact of not having a relevant history in North America could make it innovative, being the "Full EV" brand of the Group in the US. I mean, even their logo would fit the branding...
Aside from this possibility, the only significant addition to the brand for its plugin lineup coming from this deal could be its iteration of the plugin 7-seater SUV platform.
And maybe a 2020 FIAT 500e-based Opel Adam EV? Just thinking out loud...
FIAT - It is said that the longer the model is, the less interesting FIATs become, and something similar can be said in this case, because if the next generation 500e is less than a year away from landing, and the next generation, Centoventi-based Panda looks promising, above these two models, it is a complete desert of ideas...
So the brand will need a bunch of models coming from PSA platforms, like its own Peugeot 208 EV, one Italian Peugeot 2008 EV and a C-segment EV, most likely based on the future Citroen C4 EV.
Also FIAT LCVs/Vans will profit from the PSA EV technology.
See why FIAT was looking for a merger?...
Alfa Romeo & Maserati - The famous brands are in need of fresh blood in its lineup, and the Alfa Romeo Tonale PHEV compact SUV, said to land next year, will help with that.
But these makers need to refresh and electrify the remaining lineup, so what can PSA technology and platforms do to help? Not a lot, as these brands seem to be stuck in using PHEVs and making adaptations of their sporty ICE-models.
Jeep - The current star of the FCA lineup, the maker has been one (the only?) success story of FCA, growing every passing year, so it is no surprise that it has been receiving the latest and greatest, when it comes to technology. So it wouldn't be surprising if the same thing would happen under the new bosses.
With this in mind, most of the next generation of vehicles from Jeep should transition into PSA platforms, meaning the Renegade would become a sibling of the Peugeot 2008 EV, the Compass / Cherokee would be a US-based iteration of the Peugeot 3008/5008 models, while the larger Grand Cherokee would be based on the hypothetical 7-Seater SUV platform of the Group, possibly being the first brand to use it.
The remaining lineup should continue without significant PSA input.
Dodge, Chrysler and Ram - None of these brands should see significant input from PSA platforms, aside from the large 7-seater SUV platform, that could be used on the next generation Dodge Durango and / or Journey, while Chrysler, in the case of resisting the axe, could also get its own version of the large SUV platform (maybe the next generation Pacifica?).
Also, i would expect PHEV versions, not full EVs, as the market for these big vehicles would demand big electric ranges, that i doubt could be provided by the PSA-FCA Group.
Pretty sure the idea behind the merger is not to bring more brands to additional markets, but rather to leverage existing brands across the group... So I'd be surprised to see Peugeot/Citroen/DS/Opel/Vauxhall enter the US market. A Peugeot/Citroen/Opel/Vauxhall-branded 500e for France/Germany/UK seems likely though, as does a Fiat-branded 208e for Italy, and various Dodge/Chrysler/Jeep-branded PHEVs based on PSA models for the US.
ReplyDeleteI totally agree that the merged group would still have a large hole in their EV lineup, due to lack of a BEV platform for larger vehicles...
Funny aside: with the merger, all cars my uncle ever owned (Fiat, Opel, Peugeot) would retroactively become one family ;-)
ReplyDelete:D
DeleteI don't think the EV tech that is currently possessed (or not possessed) by either group factored significantly into the decision to merge.
ReplyDeleteAdditionally, there is speculation of behind-the-scenes dealings between PSA and Tesla in which Tesla would supply powertrains to the group.
Where did you see speculation about PSA and Tesla? I did see some speculation about FCA and Tesla -- but that seemed like a long shot, based on very weak hints...
DeleteYes, thanks for catching that..I meant FCA. The CEO, Michael Manley, was asked by Adam Jonas if he would be interested in purchasing Tesla electric platforms to which he effectively said he would be. He also indicated that if the FCA/PSA deal went through, then electrification then electrification would happen on a "grand scale". It seems to me that even with the EV tech possessed by Vauxhall and Opel that "grand scale" electrification is many years away
DeleteYeah, I'm aware of the discussion on the FCA earnings call. However, the Morgan Stanley analyst (not Jonas this time...) also asked on the Tesla call whether they would consider supplying power trains to other makers, and Musk said that it would be in line with Tesla's mission -- but it sounded like he was musing about it on the spot, i.e. not like they are in active negotiations.
DeleteWhat Opel/Vauxhall EV tech are you talking about? The only thing they have is the Ampera-e, i.e. Chevy Bolt leftover from the GM days; and now the upcoming Corsa-e, which is a PSA platform. (Peugeot 208 in a slightly different skin.) AFAIK Opel hasn't had any own technology ever since GM bought them two decades ago?...
It should be noted though that FCA has announced a bunch of larger BEVs (especially from Jeep) coming in the next couple of years, and AIUI PSA also has some plans -- so it's not like they don't have anything in the works... Just nothing (aside from tiny 500e and smallish 208/Corsa) right now.
Yes, you've made my point. There's nothing really convincing that equates to "grand scale electrification" in either the current or planned offerings by these companies. As an aside, why hasn't the Ampera-e sold more units in Europe?
DeleteGM sold Opel before deliveries of the Ampera-e started in earnest; and with Opel no longer part of GM, GM is not interested in Opel selling EVs for compliance reasons -- so they are essentially just shipping leftovers they didn't get to sell in other compliance markets; and at a price that is actually profitable, i.e. much higher than the US price or the originally announced European price... Meanwhile, comparable EVs (Kona, Leaf e+) are now available in Europe at much more attractive prices.
DeleteThis is a very product-driven analysis, like Antrik says: very unlikely they will introduce PSA brands in North America. This merger looks further ahead in time, where according to marketwatchers, cars become more and more copies, because there is less and less technique involved that would give them something unique like in the old days: No more own engines, own gearboxes etc. Brands become just marketingtools, and people will care less and less. So in the future it is all about volumes, that is why marketwatchers think there will be place for just 5 or 6 major players in the global market. It will be the only way to survive and be profitable. Also, less and less people in the crowded Western world will buy a car and start using other transportation solutions. This was mentioned specifically when the merge was announced: developing new transportation solutions.
ReplyDeleteActually, if private car ownership indeed becomes rare, as some people predict (though personally I'm not quite sold on that prediction yet), then traditional car brands become meaningless: the cars will only carry the branding of the network operators instead.
DeleteCar manufacturers will become white-label suppliers of unbranded cars to the mobility service operators, building them to order according to the operators' desired specs rather than the manufacturers' ideas.
(Unless they become service operators with in-house manufacturing -- though historical experience from other areas of technology suggests that service operators doing in-house manufacturing will likely be an exception rather than the rule...)
Your comment made me think how the market would be in that hypothetical future.
DeleteAs most orders would come from fleets, i think it would resemble the Light Commercial Vehicle market, with a lot of badge-engineering, with one model having 4 or 5 different badges, according to the brand and / or location, consequence of being a market with small margins.
While with a smaller number of players, there would still be different choices, but they would be similar to each other when it comes to design and specs, with the major differences laying on price and/or branding.
Heh, turns out I'm not the only one seeing it this way :-)
Deletehttps://electrek.co/2019/11/08/waymos-detroit-plant-goes-online-a-step-toward-reducing-fca-into-a-hardware-provider/
This deal is good for the ego of the management.
ReplyDeleteBuying drive-trains and technology from Tesla is a better solution for FCA.
Entering the North-American market is perhaps not the smartest move for PSA.
Most noteworthy is the lack of synergy between the companies.
Need I say more?
I'm sceptical about the "lack of synergy" narrative. While media have latched onto the "no plant closures" promise, I'd like to point out that a) synergies come mostly from shared platforms, which can be built across any number of plants, and b) this is really just empty talk to pacify unions: I'm sure there *will* be plant closures, as soon as they miss some goals and announce the next round of restructuring... Which is basically business as usual in the car industry.
DeleteAlso, the merger likely makes sense, since their businesses are in fact quite complementary: with PSA lacking a US and China presence, and FCA being pretty weak in Europe with essentially only the struggling Fiat brand...
Unfortunately, I don't see how any of this could actually benefit EVs, though.
What a long piece of narrative going on here but so little proven facts and credible possible outcomes mentioned, either by the commentators and the author.
ReplyDeleteFirst things first: both groupe PSA and FCA are beaten death horses, or putting it the other way, heroes in their own backyard only. Groupe PSA is strong on the light commercial vehicle sector namely in Europe and North Africa and on diesel powertrain engineering and production. On the other hand, FCA is strong in the Americas, mainly because it has a valuable volume brand, Jeep, while in Europe its just Fiat, the market leader on the very compact passenger vehicle segment.
Since the policies being enacted worldwide are moving into a path that punishes anything automotive and in particular, with ICE, the current key strengths of both these groups are losing relevance and conducting them to fragility/loss of bargaining power, as well as, increasing dependence of external know-how and manufacturing capacity.
The key here for the merger is, being relevant on the global scale in the future.
In Europe, they could gain manufacturing capacity and bargaining power on very compact passenger and light commercial vehicle sectors, while on a global scale they can combine and strength their engineering and production operations for ICEs and future BEVs development. The introduction into new markets is also benefited with this.
Tesla has BEV technology that is only profitable to them, their battery technology isn't interesting to anyone else (just look that, in China, Tesla didn't license technology, they will need to buy battery cells), so it is very unlikely that PSA/FCA will spend their moneis into buying from Tesla, without on the other hand, anything valuable to offer (in exchange of supplies of diesel engines to Tesla?). So no, PSA/FCA and Tesla relationship is only a one side profit generator, so no chances to happen. Indirectly there could have been some chances, but FCA already sold Magnetti-Marelli, PSA will sell Faurecia while Gefco might be of very useless benefit to Tesla. Mopar on the other hand... oh wait, their expertise isn't very much software debugging, so another No-Go avenue to Tesla.
Someone mentioned the light commercial vehicle sector as being a market with small margins, well that isn't true: those vehicles are less complex to engineer, the platforms/vehicle cycles last longer, they sell in huge numbers and have very few options customers can choose from, like useless features such ambient lightning, color paints or software features. They are very strong profit generators.
Not sure what point you are trying to make... But to address the Tesla-related aspect: why do you think PSA/FCA needs to have anything to "offer" in such a deal? They would just be a buyer, i.e. their "offer" would be additional revenue for Tesla. If they buy in sufficient volumes to significantly increases Tesla's scale of manufacturing, that would actually be a big benefit to Tesla -- if they can make it happen without diverting too much resources from Tesla's core products...
DeleteRegarding technology: while nothing is official yet, at this point it seems pretty much certain that Tesla is changing the way they will be building cell production capacity in the future: with more proprietary technology (Maxwell etc.), and less dependence on external partners (Panasonic). The LG supply deal for Shanghai is probably just a temporary arrangement for the near term, since they don't want to build another cell factory using the old approach, while in the process of bringing up a new way of handling cell production...
But cells are just part of the equation anyway: these are mostly a commodity. Tesla's real strength is in building superior battery packs from those commodity cells -- along with the most efficient drive units on the market. I have no doubt that Tesla's batteries and drive units would be interesting to other car makers as well -- if they could just get over their egos and admit that they actually can't do better EV technology in-house...
If I can sum it, I just strongly desagree with your first paragraph.
ReplyDeleteThe Automotive world is just business, pure business. And regarding the CEO of Groupe PSA that is very visible.
He dislikes wasting moneis into licencing because that hurts profitability. That's why just buying from Tesla without anything valuable to offer (sell to them) is a strong No-Go avenue.
...But we should wait then and see if this merger company in future will buy Tesla products and right of access to their supercharging network for their own benefit. I do not believe that.
Tesla is believed to have the best battery cost in the market -- so in the foreseeable future at least, it would likely actually *save* PSA (or other legacy makers) money to buy from Tesla instead of pursuing their own technology...
DeleteHaving said that, as I pointed out in another post, I'm also pretty sceptical about such a deal actually happening -- just for different reasons...