Fiat-Peugeot Merger Prepares for Success in South America

Improving sales in the region is key to merger success

São Paulo

The merger between the groups FCA Fiat Chrysler and PSA Peugeot Citroën, announced in October, was confirmed on Wednesday (18) by the companies.

The new company, the world's fourth-largest in sales, has a portfolio based on city compact cars, SUVs, and light cargo vehicles. South America is an integral part of this strategy.

A worker checks cars at the PSA Peugeot Citroen plant in Poissy, near Paris, October 31, 2019. REUTERS/Charles Platiau - REUTERS

Operations in the region are subject to less stringent environmental and safety laws than those applied in European markets, North America, and even China, where there is greater pressure to electrify vehicles. This change of energy matrix implies high investments with long term returns.

Recovering sales in Brazil and Argentina, the largest South American markets, means improving profitability. Most of the vehicles proposed for the continent use well-developed and well-accepted engines, with efficiency gains by combining turbo and ethanol.

Recent investments made by merging automakers put them in comfortable positions for vehicle refurbishment. From 2020, PSA will produce models on the new CMP platform in Brazil and Argentina. Between 2020 and 2022, the company will launch new generations of Peugeot (208 and 2008) and Citroën (C3 and Aircross) models.

Translated by Kiratiana Freelon

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