PSA, FCA Merger Could Result In Fewer Models And Brands For China

In order to regain lost ground in China, Stellantis, the combination of PSA and Fiat Chrysler, will reportedly focus on fewer brands, fewer models and less factories.

“It’s not reasonable to think that we will continue with so many brands, so many platforms and so many car lines in Stellantis, given the volumes that the combined entities are doing,” stated PSA CFO Philippe de Rovira.

He also said that PSA had recently sold one factory that it operated with joint venture partner Dongfeng, while closing another, in a bid to lower fixed costs, reports Autonews Europe.

Read Also: FCA And PSA Take Another Step Towards Securing Regulatory Approvals For Merger

For PSA, China used to be its largest single market, where the French carmaker used to sell more than 700,000 vehicles per year as recently as back in 2014. Last year however, the group sold roughly 119,000 cars, and this year, it is likely to sell fewer than 50,000 – sales through September 2020 were 31,239 units.

FCA meanwhile focuses on the Jeep brand in China, building gasoline and plug-in hybrid variants of the Jeep Grand Commander, as well as gasoline versions of the Renegade, Compass and Cherokee at its joint venture with GAC Motor.

According to GAC, sales this past month fell 36% to 3,862 units, with year-to-date volume dropping 47% to 27,675 units.

Some analysts believe that PSA and Fiat Chrysler, as well as other mass-market brands like Ford and Renault (who recently halted car sales in China), have been squeezed by Japanese and other local brands, which produce models better suited to Chinese tastes at better prices.

Updated: November 5, 2020 — 12:58 pm

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