The European Commission approved this Monday the merger between Fiat Chrysler Automobiles (FCA) and PSA (Peugeot, Citroën) that will form the fourth largest car production group in the world – 8.7 million vehicles sold in 2019 -, being healthy competition with other brands is preserved.
Last year PSA, which leads the commercial vehicle segment, dominated more than 25% of the market, which is very profitable on the European continent. The Fiat group adds up to 9%. This means that the new company would accumulate more than 34% of the market, double that of Renault, which comes next with 16.4%.
The green light in Brussels will allow the creation of a new group called Stellantis, which will help FCA and PSA to face the two biggest challenges facing the automotive industry: financing green vehicles and the crisis generated by the pandemic virus, caused by the covid – 19 virus . The new group will have more than 400,000 workers and a turnover of 167 billion euros, based on the figures for 2019, just behind Toyota and Volkswagen.
Margrethe Vestager, executive vice president of the European Commission, said in a statement that despite this approval “competition in the automotive market will remain strong”.
The Brussels decision follows an in-depth investigation in which PSA proposed, among other things, to strengthen Toyota in the multi-service segment. French and FCA, an Italian-American company, have also authorized dealers in some cities to repair vehicles of competing brands.
The merger between the two groups, carried out entirely in shares, will bring together brands such as Fiat, Jeep, Dodge, Ram and Maserati with those of Peugeot, Opel and DS, while aiming at annual cost reductions of five billion euros without the closure of factories.
Faced with the crisis caused by the coronavirus, Fiat and PSA had to change their project in September, revealed in December 2019, with the aim of strengthening accounts and preserving the businesses developed before the pandemic. The two groups hope to complete the merger by the end of the first quarter of 2021.