by Cathy Drummond
Fiat Chrysler and Peugeot have agreed to merged, instantly becoming the third largest Automaker seated behind Toyota and Volkswagen. Many believe that this is a merger is of mega proportions both domestically as well as internationally. However, this is nothing new for Fiat.
Fiat merged with the Chrysler Automotive group back in 2014. This merger of two manufacturing automakers represented a marriage so to speak. An International Automaker with a domestic one. More of which would occur with much more frequency. Chrysler was based In North America and Fiat being based in Italy. At the time, Fiat was struggling with cash flow and was cash strapped. Chrysler represented to Fiat a substantial profit incentive, which was needed at the time. The merger at that time cost about 4.35 Billion dollars. A lot of money at that time.
Fast forward to 2019 with the merger between Fiat Chrysler and Peugeot reportedly worth approximately 50 million dollars. This merger will instantly propel the combined automakers to number three in the world. Both companies will come with equal footing.
Mergers of this magnitude don’t occur often. However, most mergers seemed to be fueled by need more so than greed. And although bigger does not always equate to better. Sometimes bigger can be better in terms of competition and so-called market advantage. The original merger of Fiat and Chrysler represented a win-win for Fiat. Chrysler was a strong North American automotive brand. Chrysler brands are Plymouth, Jeep, and the subsets of Chrysler, such as the 300’s. PT Cruiser, Voyager, and others.
The merger between Fiat Chrysler and Peugeot seems to be of a similar mindset of the previous merger between Fiat and the Chrysler. with market significant market expansion for French Cars according to one source. Some have seen a significant increase in French Cars in the U.S. And to many, this merger is truly a big deal.
The sale of cars on the International stage is here to stay. The Fiat Chrysler and Peugeot is nothing other than one company’s attempt to increase its overall market share. Car mergers are rare and but are not anomalies.
According to some sources, https://www.barrons.com/articles/fiat-and-peugeot-are-merging-french-cars-will-be-coming-to-the-u-s-51576755000. But the news is still relatively new. Wall Street will have a say so in either the long term success of this merger. Although, the final judge and jury will be the actions of the marketplace.
Market forces are just that. Forces of supply and demand, and consumer spending patterns. Forces which will create profits and or losses. Telling signs needed for the needed success of this mega automotive merger between Fiat Chrysler and Peugeot.