Fiat Chairman Says Next European Car Alliance May Involve PSA

Fiat and Chrysler CEO Sergio Marchionne believes that the next European car alliance will involve the French group PSA Peugeot Citroen, the largest manufacturer of its country. "The next merger will probably be French. They tried with Mitsubishi and they will try with someone else", said Marchionne, quoted by BusinessWeek.
 

A Peugeot spokesman declined to respond to Marchionne's remarks. PSA Peugeot Citroen, Europe's second largest carmaker, broke off talks last month involving an equity swap with Mitsubishi Motors Corp. but vowed to strengthen further cooperation even if an agreement hasn't been reached. The Italian CEO has said before acquiring 20 percent of Chrysler in June last year that an alliance with PSA would be a "marriage made in heaven".
 

Last year, Fiat produced 2 million cars, while Chrysler managed to shift 1.3 million. However, the combined output of the two companies is still far away from Marchionne's goal of at least 5 million units a year. Marchionne has repeatedly said that in order to survive globally, an international carmaker needs to build at least 5 million cars a year. Peugeot Citroen sold 3.2 million vehicles last year, so a potential merger between Fiat and PSA would put the resulting company well over that ideal yearly sales figure. The deal could make sense to the French company as well, which is looking to share development, parts and production costs with their Italian counterparts.
 

The other French giant, Renault and its Japanese affiliate Nissan Motor Co., announced a 3.1 percent stake swap with Daimler AG to support a cooperation deal during the next five years involving engine sharing and saving production costs.