Peugeot owner in merger talks with Fiat Chrysler

PSA Group, the French owner of Peugeot, is exploring a merger with its US-Italian rival Fiat Chrysler.

A deal between the two carmakers would create a business with a combined market value of nearly US$50 billion (NZ$78.8b).

Merging of the two groups would bring a number of brands under one roof including Alfa Romeo, Citroen, Jeep, Opel, Peugeot and Vauxhall.

The merged entity could make nearly 9 million vehicles per year, putting it up against the likes of VW, the Renault-Nissan-Mitsi Alliance and Toyota in volume. 

PSA Group put out a statement following reports of the merger talks. “Groupe PSA confirms there are ongoing discussions aiming at creating one of the world’s leading automotive groups,” it said.

FCA declined to comment.

If the two companies combine, PSA chief executive Carlos Tavares is expected to lead the enlarged group. The French government has said it would approve the deal only if there were protections for French jobs and factories.

It is Fiat Chrysler's second attempt at a merger this year after it pulled out of an agreement with Renault in June.

There is increasing pressure on carmakers to consolidate as the industry shifts toward electric models, faces stricter emissions standards and the development of new technologies for autonomous vehicles.

PSA has been involved in other mergers in recent years, including in 2017 when it agreed to pay US$2.3b to buy GM's European business, adding the Opel and Vauxhall brands as GM exited the continent.