Fiat Merger Agreed

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Fiat Merger Agreed

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Fiat Chrysler agrees mega-merger with Peugeot, Citroen and Vauxhall-owner PSA to create the world's fourth largest carmaker

Two of the world's biggest car companies Fiat Chrysler and PSA - the owner of Peugeot, Citroen and Vauxhall - confirmed that they have agreed a merger today.

The move would tie together Fiat Chrysler's major position in North America and PSA's status as Europe's second largest carmaker, to create the world's fourth biggest vehicle firm.

The firms say that they could save £3.2billion (€3.7billion or $4.1billion) in costs with the merger, but claim they could do this without any factory closures.

However, the deal is likely to face fierce scrutiny as employees and unions fear that it would lead to jobs being lost in France, Italy and the UK, where there is particular concern for the Ellesmere Port factory.

The swift-moving deal, comes after rumours broke earlier this week, and five months after Fiat Chrysler's attempted merger with Renault collapsed.

Fiat Chrysler and PSA believe pooling their resources will bolster their attempts to move into electric cars, as the world shifts away from solely internal combustion petrol and diesel engines.

The new company would potentially produce 8.7million cars per year and have prospective combined revenues of £146billion, or €170billion and profits of £9.5billion, or €11billion. It would be worth about £39billion, €45billion or $50billion.

It would sit behind Toyota, Volkswagen Group and the Renault-Nissan alliance in the global carmaking league.

If a merger goes through, PSA Peugeot boss Carlos Tavares would be chief executive, with Fiat Chrysler chairman John Elkann becoming chairman.

Fiat Chrysler CEO Mike Manley would have a senior executive role and work closely with Mr Tavares.

Mr Tavares said: 'This convergence brings significant value to all the stakeholders and opens a bright future for the combined entity.'

This is Fiat Chrysler's second bid this year to reshape the global car industry, as it faces huge challenges with the transition to electric and autonomous vehicles.

Fiat Chrysler has long been looking for a partner to help shoulder investments in the the future of carmaking, believing that failure to consolidate will inevitably lead some companies to fall by the wayside.

Former boss Sergio Marchionne, who died in July 2018, was considered a car industry visionary, who pulled together Fiat and Chrysler and saved both from decline.

Pressure has mounted in recent years, with carmakers facing a slowdown in global demand in the wake of a major boom, at the same time as they are dealing with the unpopularity of diesel vehicles stigmatised as being bad for air quality.

At the same time as they battle declining sales, manufacturers are having to make huge investments to develop plug-in electric vehicles, cleaner technology and self-driving vehicle systems.

A merger of the two groups would bring under one roof some of motoring's most famous names: Abarth, Alfa Romeo, Chrysler, Citroen, Dodge, Fiat, Jeep, Lancia, Maserati and Citroen, DS Automobiles, Peugeot and PSA's most recent acquisitions Opel and Vauxhall.

Confirmation of these latest talks follow a failed attempt by FCA earlier this year to tie-up with Renault.

The deal was eventually scuppered by French government concerns over the role of Renault's Japanese partner Nissan.

Fiat Chrysler Automobiles was formed in 2014 out of a merger of Italian car maker Fiat and the American company Chrysler, which Fiat brought back from the brink of bankruptcy.
 
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Well, that's pretty much the end of Alfa, Lancia and Vauxhall.

Better hold onto my Alfa 75 as the last of the pre-Fiat Alfa designs (although it was built under Fiat ownership) and the Seicento as a proper little Fiat unsullied by the French and Americans.
 
I thought Lancia was pretty much dead anyway. Vauxhall won't be any great loss, as they seem to have forgotten how to make decent cars. What makes you say that Alfa Romeo will get the chop?
 
Hmmm, the Astra and Insignia are decent cars - at least as good as the Ford opposition. If they'd been given Opel badges, they'd probably sell better. The Vx badge is tarnished with a poor reputation.

Agree that Lancia are more or less dead, but under Fiat ownership there was hope they'd find a proper use for the badge - now it's competing with Pug and Citroen for space in the portfolio, I think it'll be culled completely.

As for Alfa. Sadly, the RWD unique platform idea hasn't really worked. The 8c replacement has been culled, too. If the brand survives, it'll be little more than a badge engineered Peugeot / Citroen from now on.
 
VW have been very successful in giving Skoda, Seat, VW and Audi different identities for effectively the same cars underneath.
PSA have been reasonably successful at this with different identities for Peugeot and Citroen. Hopefully they'll be able to do this for Fiat and Vauxhall.
Like VW, I see Fiat being the lower rank, Peugeot in the middle, Citroen the odd outsider, like Seat, and perhaps Vauxhall/Opel set a little higher up long term.
If they drop any marque, many of those loyal followers will move elsewhere. If they keep the marque as carefully badge-engineered ranges, loyal followers are more likely to stay.

As an example, everyone currently owning a Vauxhall or Fiat, have not just chosen that brand, but actually chosen not to buy a Peugeot or Citroen.

The future looks different, not necessarily all bad. Hopefully, Fiat will show PSA how to do engineering more simply. Peugeot and Citroen have always been a bit odd at times with the way they build things.
 
I don't see any true identities in the VAG stable.

The cars may have unique styling, but you get more or less the same driving experience, just the amount of soft plastics inside changes as you move through the ranks. The gap between VW and Audi is minuscule, too - very few reasons to buy an A3 over a Golf or even an A4 over a Passat, despite the A4 riding on an Audi rather than VW platform.
 
Hmmm, the Astra and Insignia are decent cars - at least as good as the Ford opposition. If they'd been given Opel badges, they'd probably sell better. The Vx badge is tarnished with a poor reputation.

Agree that Lancia are more or less dead, but under Fiat ownership there was hope they'd find a proper use for the badge - now it's competing with Pug and Citroen for space in the portfolio, I think it'll be culled completely.

As for Alfa. Sadly, the RWD unique platform idea hasn't really worked. The 8c replacement has been culled, too. If the brand survives, it'll be little more than a badge engineered Peugeot / Citroen from now on.
I think lanica with there one horrid model outsells Alfas entire lineup in Europe
 
I'm fed up with all the negativity.

Every time FCA announce something its always the end for Alfa, why?

Alfa are never going to be a volume seller, the PSA, or Vauxhall/Opel group can't make premium cars, DS is a mess, so Alfa should be the premium in the group. The Georgio platform could make a good large Pug or Citroen.

PSA have a nice small car platform, FIAT could use that after years of neglect.

Both sides need each other to stay in the game
 
The Alfa Romeo name is surely a considerable asset so I don't see that being dropped any time soon. Most likely, Fiat-Chrysler will limit themselves to small cars and 4x4s. Probably with PSA engines.


A far bigger issue is the rise of electric cars. This is Tesla-centric but very clearly shows the considerable problems ahead for Big Auto.



Right now if you compare what Tesla offer against the electric competition, most buyers will save up the extra for a Tesla. The competition need to up their game. But it's not in their interests to do that.


Once people drive an electric car with decent range, many will not want to go back to ICE. As soon as the manufacturers announce viable electric cars in volume production, their ICE car sales will dry up as people wait for the electric version to arrive. Right now they are restricting supply but that can't continue unless they want the new boys to take over.

Tesla, Rivian and any new entries into the market do not have that legacy to deal with (or even dispose of) and they'll grab the market.
 
Im not really a fan of PSA products.. but they have a reputation for developing tech. That works!!

Theyve had diesel hybrids for a decade..
Which in the real world... will suit a lot of people.

I know very few people who can make a £40k 'golf.cart' work for them.

Peugeot were just about bankrupt.. until the 405 success story ( fiat employed that designer.. to build them a topnotch 'repmobile'... over the years it proved excellent.. but of course fiats over 1500cc never sell..)

The Berlingo was a cut above
: a mould breaker in its day.

I once ended up with a 1.9 d Citroen estate. you would never know it had covered 350k.. solid :)


PSA.. motors.

Due to national policy.. the French ruled diesel engines .. before FIAT brought commonrail to the mainstream market.

I dont think their motors are anything special now.

Wheras FIAT are .. through FPT.. still making big money selling development.

JLR were famously troubled by 'dirty diesel' messing up a vast percentage of their range sales.

'Multiair' is getting petrol back on the agenda for them.

We will see how this pans out..

Did they even do the 'baby petrol' thing.?

Twinair.. Ecoburst.. Firefly etc
 
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Back in the 1990s, Ford were about to launch a super clean petrol 2 stroke with direct fuel injection. For some reason the plug was pulled during the end stages of development. It promised clean emissions, better fuel consumption, much lower service costs and less weight to lug around. The Haynes museum has a pre production 2 stroke Ka so it was getting very close before being stopped.

Konisegg has the Freevalve an electronic valve engine. Intake and exhaust valves are fully computer controlled. There are no cam shafts, no cam belt, saves about 20Kg in weight and is considerably more powerful per cc. It also offers much lower service costs, but for some reason nobody is buying the technology.

Does this lack of engine development suggest the money is going into electric tech? Who knows. The electric Panda concept with five removable batteries looked a great idea, but it's all gone very quiet. Maybe electric is still too costly for small low budget cars.
 
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The Ford 2 stroke still suffered from the same issues as most other 2 strokes. Poor longevity and emissions. You can’t get around burning oil and the introduction of catalysts and emissions standards which more or less require catalysts killed the idea.
 
'Multiair' is getting petrol back on the agenda for them.
We will see how this pans out..

Indeed but the technology needs pushing further.

Hig pressure common rail petrol and diesel injection is now bog standard and nothing new to be excited about.

Valve Train Actuation has been an long and interesting story/history. The same basic problem (unless you are talking about two stroke engines) is that valves have to be operated and timed "as an addition process" to the crank/piston operation.

So over the years we have had "side valve engines", "overhead cam/valve engines" and gear driven, chain driven and cam belt driven examples.

The fundamental problem for engine valve operation that currently defies solenoid driven valves is the amount of force and HP required to overcome/drive the valve springs.

Fiat (FPT) seem to have solved the intake valve operation with hydraulics but they/it relies on the belt driven power from the crank. This suggests to me that there is currently no reliable *electric* high pressure and high volume oil pump that can drive both intake and exhaust valve actuators.

There is another twist to this. Diesel & Petrol & LPG & .... fossil fuel burning engines are on their way out. Electric is coming, will be mandated ..... so any future combustion engine developments will have a limited life span and any such developments will have to be "cheap" and radical for them to provide any short to medium time duration return on investment. Manufacturers are probably already declining to future invest in combustion engines and focussing and investing in electric.
 
The Ford 2 stroke still suffered from the same issues as most other 2 strokes. Poor longevity and emissions. You can’t get around burning oil and the introduction of catalysts and emissions standards which more or less require catalysts killed the idea.

You say that but these were done in the late 1990s and were shown to have a very good service life. By then, we had been using catalysts on diesels as well as petrols. Two strokes running direct injection require much less lubrication so the small amount of oil that does go through is easily handled by the exhaust catalyst. In terms of oil consumption, they used only 50% more than a 4 stroke over a service period. But there were no oil change costs, no oil filter and no oil disposal issues so significantly less cost per mile.

The big problem with port injected or carburettor 2 strokes is inconsistent ignition at low throttle or closed throttle. Fuel, gets sucked through the (almost) closed throttle or gets condensed in the crank case, causing the engine to 4 stroke and even 8 stroke. This is noisy, rough on transmission and causes piston slap ans excessive wear, not to mention the awful emissions.

Direct injection solves the problem as the engine breathes clean air and the bottom end never sees fuel. With no fuel to wash oil off moving parts they use a lot less. With consistent ignition there is no piston slap they have a good service life. Replacing a set pistons sounds awful but parts and labour would cost less than most 4 stroke cam belt changes.

BRP Skidoo use a Rotax 800cc direct injected 2 stroke that makes 160bhp with good mid range lugging power. It easily meets the USA EPA air pollution demands - which are especially tight. They make more power than competing 1200cc 4 strokes, use less fuel, with less air pollution and save a lot of weight and servicing costs. Used in a car, they could have 50% full power and still give a very healthy output with great mpg low NOx and easily meet the other emissions demands.

Two stroke diesels go one better. The bottom end is lubricated like any 4 stroke. They have a small driven blower for low speed scavenging with a turbo for normal operation. The NOx emissions are low (no hot exhaust valves) but particulates are probably no better than a 4 stroke diesel.
 
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