Found this on the news today about a Fiat/PSA Peugeot-Citroen merger

http://in.reuters.com/article/businessNews/idINIndia-37016920081213

Some figures I found on Wikipedia:

Production
PSA: 3.4 million units, Fiat: 2.6 million units

Revenue:
Fiat: €58.529 billion (2007)
PSA: €60.61 billion (2007)

Profit:
Fiat: €2.054 billion (2007)
PSA: €885 million (2007)

I think the Fiat figures might include its other non-car businesses.

There is not much to find on Google News and not much detail to go on, so perhaps it could just be rumour.

Have heard this story banded around quite a bit lately and in the present economic climate I can see the cost saving benefits being attractive to all parties but I think this could only be considered a medium to long term gain as the time taken to integrate platforms and ranges could not be completed over night.

Also would a larger group also want to produce the C1, 107, Panda, 500, 1007, 207, GP etc. I think not so what would go?

PSA's financing arm have also been bailed out by the French government today with the best part of €1/2billion and they issued a profit warning in October so will Fiat want to get into that after only just dragging it's self back from the brink?! Also will Fiat want to close plants in Italy and PSA in France, errr no, and will they want to close the profitable plants in eastern europe, err no so can't see it happening myself unless things become unsustainable for either.

Can't see a merger other than on joint models like commercial vehicles / MPVs. I feel that Fiat will get closer to TATA in emerging markets. A closer TATA - Fiat link could lead to some interesting platform possibilities eg Alfa/Maserati with Jaguar and Land Rover with Fiat (A baby Land Rover on the Panda Cross platform would do wonders for LR's Co2 average)

JON

(All points made in this message a entirely fantasy)

Gingosporting said:

Can't see a merger other than on joint models like commercial vehicles / MPVs. I feel that Fiat will get closer to TATA in emerging markets. A closer TATA - Fiat link could lead to some interesting platform possibilities eg Alfa/Maserati with Jaguar and Land Rover with Fiat (A baby Land Rover on the Panda Cross platform would do wonders for LR's Co2 average)

JON

(All points made in this message a entirely fantasy)

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That would make sense. Fiat have done alot in "new" markets i.e by letting the communists ruin some of their cars (i.e Yugo and Lada.)

I was thinking India and South America. The Tata Indica already uses the 1.3 Mjt.

JON

TATA have just payed a lot of money for 2 brands (Jag and LR) that are both in the part of the market that is going to be most badly hit by the economic downturn so maybe they will be looking for a tie in with a western profitable small car producer and Fiat will be looking to move into the Asian marketplace?

This won't happen. Fiat is just asking for a bit of government help and when they get it all talk of mergers will be off. Fiat is compartively speaking in a good position compared to other manufacturers, they have a good range of small cars which are selling far better than other manufacturers who rely on bigger cars and fleet sales. Merging with PSA would be a dumbass move because they would still have masses of production capacity and still sod all demand for cars.

PSA and Fiat have seen what's happening in the US with the manufacturers getting handouts and want a bit of free money

I can see this happening especialy after FIAT CEO last week said he would welcome any talks to form a merger with other car makers, it was quoted in a few mags, Auto Express I think for one.

He went on to say that he believes that within 5 years there will only be a handfull of car companies, his predictions are;

2 German= Porsche/VAG group which covers VW, AUDI, Lambo, SEAT which is now worlds biggest car maker overtaking Toyota and GM, just. And the proposed BMW/Mercedes merger forming the other.

France= Renault/Nissan look robust enough to see it out.

One other Europe which he hoped included FIAT group so the Peogoet merger looks a sound one.

One Japanese= Toyota which pretty much owns Subaru and Diahatsu, though Hondas future seems unlcear in this.

One Korean

One Chinese

and his boldest predection of only 1 US maker.

Will it all come true, who knows, but things will change.

In last two days alone, Suzuki and Subaru have both withdrawn from WRC, looks like Ford may follow, leaving just Citreon.

J333EVO said:

Auto Express i think for one.

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With all due respect Auto Express isn't a credible source

Perhaps I'm wrong and Fiat aren't bluffing and really do feel they need to join up with another car maker to survive but a lot of people feel that it's just a bluff to get some government money

306maxi said:

With all due respect Auto Express isn't a credible source

Perhaps I'm wrong and Fiat aren't bluffing and really do feel they need to join up with another car maker to survive but a lot of people feel that it's just a bluff to get some government money

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When quoting verbatim from Fiat CEO, you can't really go wrong, Fiat have issued profits warning, and Lancia launch in RHD markets has been put on hold indefinetly which considering they have sold more Lancia's than Alfa's this year shows how bad a position they are in that they can't push there 2nd biggest selling brand.

J333EVO said:

When quoting verbatim from Fiat CEO, you can't really go wrong, Fiat have issued profits warning, and Lancia launch in RHD markets has been put on hold indefinetly which considering they have sold more Lancia's than Alfa's this year shows how bad a position they are in that they can't push there 2nd biggest selling brand.

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On the point of Lancia and Alfa Romeo. Alfa's range isn't the best when you're wanting to push sales figures against a brand which has just launched the Delta. The 147 is old and in need of replacement and the Mito hasn't had it's effect on the YTD figures just yet but for November Alfa was back in front of Lancia due to the boost the Mito has given.

The thing is I've no doubt these things were said but it's the intent behind them that I'm questioning. Fiat is a matter of pride for Italy and no Italian government will let them fall unless they want to see scenes similar to those in Greece recently. So the government will cave in and help Fiat out and keep them Italian. I think at best you'll perhaps see some collaboration when it comes to things like drivetrains but that will be the extent of it.

As PandaCraig said, are they going to close French and Italian plants? Hell no! Are they going to close the profitable eastern European plants? Hell no! So how the heck do they downsize?

I found the info now, major thread on it on Piston Heads.

8th Dec 2008
Major Marques on Death Row
Fiat boss warns sales slump may take big-brand victims

The global slump in car sales could sound the death knell for major automotive brands including BMW, with one automotive group CEO predicting only six high volume survivors.

Fiat group boss Sergio Marchionne has told Automotive News that 24 months from now the global car making scene is likely to look very different, with survival only guaranteed for groups that can build and sell more than 5.5 million vehicles a year. Currently that means Toyota, GM, Volkswagen, Ford and Renault-Nissan, and Marchionne’s view of the new global reality is stark.

‘We’re going to end up with one American house, one German of size, one French-Japanese, one in Japan, one in China and one potential European player,’ he told AM. ‘Independence in this business is no longer sustainable’.

While bigger companies can achieve cost savings and enjoy economies of scale, smaller outfits are likely to bear the brunt of the recession.

According to AM’s analysis, brands with a large ‘family-owned’ stake are at most risk – including BMW and Peugeot-Citroen, which could be put up for sale by the Quandt and Peugeot families. Fiat is also considered vulnerable.

While some predict mergers and acquisitions as the way for European brands to survive, others are more cynical citing EC competition rules and the failure of previous ventures like Daimler’s takeover of Chrysler and the BMW Rover debacle.

I think the Fiat/Tata merger? or more likely increased cooperation may have legs.
Remember Tata himself is on the Fiat Main Board and I dare bet has spare capacity in his manufacturing plants in India, as well as a huge market for modern small cars likely to grow apace with the thriving Indian economy and their new "Middle class" eager to spend their new found wealth.
Plus sharing Jaguar/Land Rover technology would'nt go amiss at any car company, Research and Development alone would be a huge boost to any possible future tie up.

Daver said:

I think the Fiat/Tata merger? or more likely increased cooperation may have legs.
Remember Tata himself is on the Fiat Main Board and I dare bet has spare capacity in his manufacturing plants in India, as well as a huge market for modern small cars likely to grow apace with the thriving Indian economy and their new "Middle class" eager to spend their new found wealth.
Plus sharing Jaguar/Land Rover technology would'nt go amiss at any car company, Research and Development alone would be a huge boost to any possible future tie up.

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Why do Fiat want spare capacity though? The problem right now is too much capacity!

Tata is screwed anyway as they borrowed lots of money to buy Jaguar and Land Rover.

306maxi said:

Why do Fiat want spare capacity though? The problem right now is too much capacity!

Tata is screwed anyway as they borrowed lots of money to buy Jaguar and Land Rover.

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Spare capacity in Indian factories would allow Fiat to get around the import duty paid on imported cars in India. The import tax is soo high an average spec 500 costs around £20K over there. Building cars in India opens up the indian market for them.

Fiat is in a much better position to survive than the likes of Merc, Chrysler, GM etc. BMW have the mini and 1 series, Merc have nothing to fall back on when people start to down size so they could be on the ropes. Porsche will buy the rest of VW sooner or later, that was going to happen anyway. Fiat employ so many people in Italy the government would never see it go to the wall, the worry is Ferrari and Ferrari F1 and the cost of sustaining those enterprises. Korean makers are going to be in a bit of trouble as costs have risen and there is no where they can make cheap cars. Eastern europe is covered by Wetsern car companies and they have no chance of going into China due to the North/South thing! I can't see the 6 manufacturers thing happening though, car companies seem to have responded swiftly to the financial climate so far so hopefully a few more will make it through the other side. If not the car world will be much duller without the variation and competition of multiple makers.

PandaCraig said:

Fiat is in a much better position to survive than the likes of Merc, Chrysler, GM etc. BMW have the mini and 1 series, Merc have nothing to fall back on when people start to down size so they could be on the ropes. Porsche will buy the rest of VW sooner or later, that was going to happen anyway. Fiat employ so many people in Italy the government would never see it go to the wall, the worry is Ferrari and Ferrari F1 and the cost of sustaining those enterprises. Korean makers are going to be in a bit of trouble as costs have risen and there is no where they can make cheap cars. Eastern europe is covered by Wetsern car companies and they have no chance of going into China due to the North/South thing! I can't see the 6 manufacturers thing happening though, car companies seem to have responded swiftly to the financial climate so far so hopefully a few more will make it through the other side. If not the car world will be much duller without the variation and competition of multiple makers.

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The only way the Ferrari F1 programme will be cancelled would be for political reasons. IE that it's not appropriate to be spending that sort of money when they're making people redundant etc etc even though the Ferrari F1 campaign funds almost completely from sponsorship and merchandise. Fiat has to put very little money into it from their own pockets so it's pretty good value.

Mercedes have their own small cars A and B Class as well as SMART and a huge range of mega efficient turbo diesels in the Bluetec series. They also have their production plants in South Africa, India and China producing vehicles for Europe as well as new markets.

JON

Another article on the PSA/Fiat merger.

by Michael Gauthier
December 14, 2008 11:22 AM

Reports out of Italy have suggested that Fiat and PSA/Peugeot-Citroen are looking into the possibility of merging as a way to survive the current financial crisis. The news comes just days after Fiat's CEO, Sergio Marchionne, stated that the company would need to find another automotive partner to ensure the company's survival in light of the recent economic downturn.

The issue seems to have reached a high enough level that leaders in both France and Italy have held discussions on the matter. According to analysts a merger between the two companies would make sense, considering that both have extensive experience making small cars and the two have worked together since 1978 on joint projects such as the recent Peugeot Boxer, Citroën Jumper and Fiat Ducato vans. If the two companies were to merge their combined output would rival Volkswagen and Renault-Nissan, making the proposed company the fourth largest automaker in the world.

Any potential merger would take months to complete, but if such as tie-up does occur hopefully we can expect the return of the Citroen SM.

http://www.worldcarfans.com/9081213.015/report-fiat--psapeugeot-citroen-set-to-merge

Yet more on it.

Fiat Group SpA has shut down most of its Italian plants for a month, laying of 48,000 blue collar workers for an extended holiday break due a drop in demand for new cars. The shutdown will be effective until mid-January and will affect 20 Italian Fiat plants.

According to InsideLine sources, Fiat and PSA Peugeot-Citroën have been talking about a possible merger. Fiat Group’s CEO Sergio Marchionne predicted at the 2008 Paris Motor Show that the European car market would drop 5 percent next year. Fiat’s sales have declined 30 percent year on year in November in Italy alone and things aren’t looking any better for Fiat’s worldwide markets.

However, PSA Peugeot-Citroën is doing well in France, reporting a 17 percent drop year on year.

Insiders say that an alliance between the two companies could work really well. “For one thing, both companies are expert in smaller and inexpensive cars. Also, Fiat is number one in Brazil, a big emerging market where the French are weak,” said the source.

Both automakers are considered to be on the cutting edge of R&D when it comes to diesels and small-displacement engines.

http://www.egmcartech.com/2008/12/16/fiat-and-psa-peugeot-citroen-talking-about-a-possible-merger/

and then just reiterating what was said before

Milano Finanza newspaper reported that France and Italy are considering a potential tie-up between automakers PSA Peugeot-Citroën SA and Fiat SpA.

The report comes just days after Fiat Chief Executive Sergio Marchionne said the Italian company needed to find a partner to survive the crisis besetting the car sector.

Italian Prime Minister Silvio Berlusconi and French President Nicolas Sarkozy have tackled the issue of a possible tie-up, Milano Finanza said, citing sources close to Berlusconi’s office. The issue coincides with Berlusconi’s office examining possible aid to the auto sector, it said.

The two companies produced some 6.2 million units last year; the combined output from a merger would make a Fiat-Peugeot-Citroën the fourth-largest automaker by production.

http://www.greencarcongress.com/2008/12/france-italy-co.html