VIGO, Spain - Which auto company will be the next to announce merger plans as the industry continues to consolidate?
It won't be PSA/Peugeot-Citroen SA, vows CEO Jean-Martin Folz.
'We learned many lessons from the merger of Peugeot and Citroen in the 1970s, and I am not a great believer in mergers and acquisitions for a number of reasons,' he said over lunch here late last month.
'There have been several deals announced recently, but it will take five or six years, the life of most models, to see how well they have worked.'
Cars, Folz said, are not commodities in the same way other purchases are.
'If a champagne company buys a brandy company, it can put the bottles on the shelf side by side, and people will buy both. But you will not see that with cars,' he said.
'As for economies of scale, these can only come with a common platform strategy. Consumers now demand so many different models and variations that production numbers for each individual variant actually are becoming smaller.'
Folz said he could not see PSA entering into a merger or acquisition because the Peugeot family does not want to sell its controlling stake.
'But I do see technical partnerships, such as the joint development we are carrying out with Ford on diesel engines,' he said.