Upon the official approval of Fiat Chrysler’s “merger of equals” with Groupe PSA by shareholders, industry specialists are contemplating the implications on the range of products at FCA dealerships. Speculations suggest that the existence of the sluggish yet iconic Chrysler brand might be approaching its end, as indicated by the Associated Press.
Within the formation of Stellantis as the two automotive powerhouses unite, the reigns will be handed over to the current PSA CEO Carlos Tavares, a leader known for swiftly discontinuing underperforming brands and products. Experts and analysts in conversation with AP indicate that all slow-selling Fiat Chrysler products, including the entire Chrysler brand, are on the brink of extinction.
Chrysler
The potential demise of one of America’s oldest and most renowned brands shouldn’t come as a major shock when viewed from a strictly business standpoint. Presently, the brand’s offerings are limited to the Pacifica minivan and the decade-old 300 sedan. (Though Chrysler categorizes the Pacifica Hybrid and Voyager as distinct models, they are essentially variations of the Pacifica in terms of environmental-friendliness and affordability, respectively.)
A minivan and an aged sedan do not constitute a lucrative lineup in today’s prevalent truck and crossover-focused market. In the third quarter of 2020, Chrysler’s U.S. sales accounted for merely 6% of Fiat Chrysler’s total.
Combine this with Tavares’ intention to introduce PSA vehicles in the U.S., and the likely disappearance of some slow-selling FCA products appears almost certain. Such a move would result in job cuts across Italy, Germany, and Michigan, as indicated in the report.
“Maintaining the entire range of both companies does not align with cost efficiency,” remarked Karl Brauer, an analyst at iSeeCars. “We’ve witnessed this scenario in the past and are likely to witness it again as they streamline these platforms globally, across various markets.”
On the contrary, the operational landscape at Ram or Jeep is anticipated to remain largely unaffected under the new leadership, given their profitability and U.S. market popularity.
Tavares, who previously served under Carlos Ghosn at Nissan, renowned for his aggressive cost-cutting strategies, is slated to assume control over Stellantis no earlier than late January. Apart from his role as Stellantis CEO, Tavares will also hold the deciding vote on the company’s board, occupying the sixth seat for PSA against FCA’s five.
We have reached out to Chrysler for statements and will provide an update on this matter once we receive a response.
Update 1:52 p.m. ET: A spokesperson from FCA has responded with the following message:
“Stellantis’ unparalleled collection of renowned and prestigious brands forms one of its greatest assets. This merger and the ensuing resources will be a boon for these brands, driving the innovation of exceptional products for their global customer base. As previously stated, there will be no factory closures as a result of this transaction.”
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