Tavares sees no hurdles to PSA-FCA merger

PARIS -- PSA Group and Fiat Chrysler Automobiles have submitted 14 of 24 applications to antitrust authorities as they seek to complete their merger in the next 12 to 15 months, PSA CEO Carlos Tavares said Wednesday.

Two areas of potential antitrust concern are the light-commercial vehicle market in Europe and sales of small cars in southern Europe.

PSA Group brands have a 25.1 percent share of the European van market and FCA has about a 10 percent share. PSA and FCA already jointly produce midsize vans in Italy.

The European minicar segment, which is especially large in Italy, is led by two Fiat models, the Panda and the 500, and PSA has three models in the top 10.

Together PSA and FCA had a 46 percent market share in the segment in 2019, or about 510,000 sales of a total of 1.1 million,  according to data from JATO Dynamics.

Tavares said there had not yet been any feedback from regulators and that no problem areas had been identified.

"We have no reason to believe there will be any problems, including on the LCV side," he said. "But our stance is very simple: Whatever we have to discuss or modify, we will."

Until the merger closes, the two companies will remain competitors, with only very limited information exchanges allowed.

Brand decisions

Tavares said that there were no plans to trim any of the "13 or 14" brands from the merged company's portfolio. "What we can see is that we'll have a fantastic brand portfolio that will cover the market," he said. After the merger closes, he said, "We'll decide what is the best way to go to market, to map the market, to cover the market, to reduce cannibalization, if there is any."

"For the time being I'm more excited about what we can do more of rather than what we should do less of," he said.

One area of increased collaboration will be in electric vehicles and CO2 compliance. PSA Group is "on track" to meet its 2020-21 EU emissions with its own models, Tavares has said, while Fiat Chrysler is partly relying on purchased credits from Tesla electric car sales in Europe and does not have many electrified models in its product pipeline.

PSA is collaborating with oil company Total on two battery cell factories expected to come on line in 2023, and Tavares said these factories would supply the products for the merged company.

"We intend to protect our new company from any strategic problems arising from battery supply," he said.

He pointed to Opel as a model for lowering emissions of Fiat Chrysler, noting that Opel's fleet CO2 emissions had fallen by 20 grams in 2019, by moving models such as the Corsa quickly onto PSA's more efficient platforms, and by discontinuing high-polluting GM-developed models.

PSA and FCA struck a deal in December to create the world's No.4 automaker. The automakers hope to seal the merger by early 2021.