Jeep and Chrysler will merge with Peugeot; which vehicles will America get?

December 18, 2019

Fiat Chrysler Automobiles and PSA Groupe officially signed a 50/50 merger between the European and American automakers Wednesday, making the as-yet-unnamed automaker the fourth largest in the world behind Volkswagen AG, Renault Nissan Mitsubishi, and Toyota. 

It remains to be seen which vehicles will be offered and which ones will be discontinued, let alone the company name, but in a press release and presentation to shareholders, there is a clear indication where Peugeot SA and FCA intend to go. 

One of the strengths listed for FCA is a “strong SUV and pickup truck lineup,” which clearly indicates the two profitable arms of FCA in the Jeep and Ram brands out of America. It also references the “premium/luxury brand experience,” which suggests the Maserati and Alfa Romeo brands from Italy. 

There is no mention of Dodge, Chrysler, or Fiat, all of which have had product lines stripped down over the past few years, and past decade. Chrysler sells the Pacifica minivan, but the 300 full-size sedan is aging, and the Voyager is essentially the inexpensive minivan for fleets. 

Fiat cut production of the 500 city car series in the U.S. earlier this year, leaving the 500L and 500X small crossovers, as well as the low-volume Fiat 124 Spider built out of a partnership with Mazda. Fiat still has a strong presence in its home country of Italy. 

The Dodge question might be the largest one. The aging but beloved fleet of classic American muscle cars in the Challenger and Charger has been pared back in recent years, even as Dodge keeps making headlines with its SRT performance brand, which is responsible for the 797-horsepower Dodge Challenger SRT Hellcat and other performance beasts. It’s a surprise that Dodge is still making the Journey crossover and Grand Caravan minivan, so those vehicles likely won’t be part of the new family. The Dodge Durango three-row crossover SUV might also be kicked to the curb. 

The entire Dodge lineup runs contrary to one of PSA's stated strengths of "smartly addressing CO2 emissions," and contrary to many industry forecasts.

FCA has one plug-in hybrid in the Chrysler Pacifica, and mild-hybrid versions of the Ram 1500 and Jeep Wrangler won’t be enough to reach fuel economy targets in the U.S. and Europe. 

This is where the French automaker can help, ostensibly. PSA Group owns Peugeot, Citroen, Opel, Vauxhall, and DS Automobiles, which aren't sold in the U.S., and perhaps more importantly, struggling in China. PSA boasts two “multi-energy flexible platforms” to ramp up electrification plans. It currently has seven plug-in hybrids (PHEV) and battery electric vehicles (BEV), and, in 2019, committed to a PHEV or BEV version for each new vehicle launch. 

A Dodge Challenger plug-in hybrid does not seem likely. A future Dodge lineup with overt Opel overtones, and a Chrysler family filled with DS and Peugeot-alikes, shows some promise.

The merged brands expect to save $4 billion annually in cost savings. 

The merger shakes up the automotive world order, but it is the culmination of years of international courtships and stalled partnerships. Fiat rescued Chrysler in the wake of Chrysler’s 2009 bankruptcy filing, eventually turning FCA into a global company in 2014. CEO Sergio Marchionne actively but futilely pursued partners until his death in 2018. A proposed merger with Renault was withdrawn in 2019. 

The French automotive company of Peugeot has had a recent turbulent past as well. General Motors tried to rescue Peugeot-Citroen in 2012 in a partnership that would last for only one year. In 2017, GM cut ties with its European brands of Opel and Vauxhall Motors to, who else, PSA Group. 

Technology, product, and platform sharing should account for cost-saving synergies that will not result in “any plant closures resulting from the transaction,” the group said in a statement. FCA shareholders will get a special dividend of about $6.1 billion. 

The merger is expected to take at least a year, and will need approval of both companies’ shareholders as well as pass regulatory requirements. In the meantime, dealerships and service centers will continue business as usual.

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