Fiat Chrysler Automobiles (FCA) considers merger options to help the company boost its revenue in the European market as it faces the looming European Union limits on carbon emissions. France's Renault and South Korea's Hyundai are among the options of FCA as partners.
FCA is expected to merge with European companies and Renault is one of the possible options for a merger. FCA recently became partners with Peugeot. Reports are also circulating that the Italian-American company sees Hyundai as a potential suitor. The reports from the Italian media said that John Elkann, FCA's chairman, proposed the plan to President Xi Jinping of China as a recent dinner in Rome.
Mike Manley, the FCA CEO, is also rumored to seek a partnership that includes a possible merger with the prestigious brands Maserati and Alfa Romeo. Closing a deal with the two big names will surely strengthen the company.
Giuseppe Berta, a modern history professor at Milan's Bocconi University and former director of the Fiat Archives said that Fiat is not in a position to go on like this for long, something's got to change. He added that Its US brands are going strong, but its Italian-European brands are performing increasingly badly.
Experts believe that the slowdown in the car sales in Europe of the world's seventh-largest carmaker could dramatically worsen in the case of a no-deal Brexit. Berta said that FCA's European arm would be sold off, or strongly scaled down if the slowdown continues. In February, the company the deliveries of the company dropped 5.3 percent. Fiat is seen declining by 11.5 percent as it suffers from an aging range. The company's Jeep gained during the month after its registrations increased 35 percent. Recently, the company decided to abandon its production of sedans as they focus on the manufacture of Jeeps and Ram. The decision was seen to have paid off.
The concerns from investor are growing as they see the company focusing on one region following the slowing demand trend in the United States market. Many believe that the deal with the European nations could benefit FCA. A merger with a tie-in French carmaker PSA that owns Peugeot, Citroen and Opel brands could ease the entry of the company into China's market where the PSA has a strong footing.
Europe is also tightening its policies in carbon emission in 2021. A merger with Peugeot will give FCA an advantage since Peugeot already have the necessary technology to develop hybrid and electric vehicles.
