FCA–PSA fusion: first of the electric shock waves?

Electric fusion

The merger attempt by FCA and PSA will be complicated but makes economic and operational sense, including for supply chain management and logistics. Whether or not it goes ahead, more consolidation is likely as the automotive industry gears up for electrification

The pace at which PSA Group and Fiat Chrysler Automobiles appear to have agreed a deal to merge and create the world’s fourth largest carmaker is remarkable, with an agreement in principal hammered ou in just a few days.

Although hurdles remain before a final merger, that speed belies a growing urgency across the automotive industry. In the face of mounting pressure to invest in new technology, notably electrified powertrains, expensive fines over emissions, and the risk of a prolonged slowdown in global vehicle sales, traditional automotive players need to gain even more economies of scale and pool risk to make these transitions – if not to survive.

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