TURIN – Fiat Chrysler Automobiles has told its suppliers that its next generation of small cars will use a platform from PSA Group.
The two companies are in talks to combine into a new automotive group that will be known as Stellantis. The merger's completion is expected in the first quarter of next year.
In a letter sent in late July and obtained by Automotive News Europe, FCA asked its suppliers to immediately stop any research, development and tooling construction activities on future B-segment (small/subcompact) cars.
FCA had already told suppliers in March to temporarily suspend the development of five small cars for the Alfa Romeo, Fiat, Lancia and Jeep brands because of the COVID-19 pandemic.
FCA had updated its small-car platform so that it could be used by a new family of small cars with gasoline and diesel engines and battery power. The Fiat New 500 full-electric minicar, which arrives in European dealerships in October, is underpinned by the platform. The New 500, which is built in Turin, will not be offered in North America.
FCA’s new small cars will switch to PSA’s Common Modular Platform (CMP) small-car architecture. The platform underpins the Peugeot 208 and 2008, the Opel/Vauxhall Corsa and new Mokka, and DS3 Crossback. All these models have internal combustion engine as well as full-electric variants.
In its note to suppliers, FCA said it will build CMP-based small cars in its plant in Tychy, Poland. The factory currently makes the Fiat 500 and Lancia Ypsilon. Italian press reports suggest FCA will build up to 400,000 units a year of CMP-based models in Tychy.
FCA and PSA must continue to behave and act as competitors until the merger is completed to avoid any possible antitrust issues. To avoid legal problems, FCA told its suppliers that it has created a standalone cooperation with PSA for development, production and assembly of vehicles based on PSA’s CMP platform.
FCA’s decision to use PSA’s CMP architecture is consistent with its decision to abandon selling minicars and concentrate on small cars.
In October, FCA said it plans to quit Europe's minicar segment, where it is the leader, joining other automakers in axing their smallest cars because of increasing development costs so the models meet tougher emissions limits.
FCA traditionally dominates minicar sales in Europe with the Fiat 500 and Panda, that alternate at the top of the segment. Last year Fiat sold 183,322 units of the Panda and 175,566 units of the 500, well ahead of the Toyota Aygo at No. 3 with sales of 97,944. The Panda and 500 had a combined one third share of minicar sales in Europe, according to JATO Dynamics data.
FCA will try to shift Fiat’s minicar customers to the small-car segment.
"In the very near future you will see us refocus on this higher-volume, higher-margin segment, and that will involve a move away from the minicar segment,” FCA Mike Manley told analysts on FCA's third-quarter earnings call on Oct. 31.
Fiat plans to win back customers in the small-car segment it exited in 2018 when the Punto hatchback was discontinued, Manley said. The Punto was Fiat's best-selling car in Europe for a long time but former FCA CEO Sergio Marchionne said its sales were not large enough to build a successor profitably.