BRUSSELS -- Fiat Chrysler's planned $50 billion merger, with PSA has hit a bump after EU regulators voiced concerns about the companies' market share in small vans, indicating concessions may be required, sources said.
FCA and PSA, which are seeking to create the world's fourth biggest automaker, were told of the European Commission's concerns last week.
If the two companies fail to dispel those concerns in the next two days and then decline to offer concessions by Wednesday, the deadline for doing so, the deal would face a four-month investigation once the preliminary review ends.
The EU competition enforcer, which has set a June 17 deadline for concluding its preliminary review, declined to comment. FCA and PSA also declined to comment.
FCA and PSA produce vans through a 50-50 joint venture called Sevel, which is based in Atessa, Italy, and is Europe's largest assembly plant for vans. It built 1,200 units a day before interruptions due to the coronavirus.
According to the European industry association ACEA the two automakers produced 755,000 light commercial vehicles last year, giving them a potential combined market share of around 34 percent, the market leader, followed by Renault and Ford with about a 16 percent market share each. Volkswagen had 12 percent of the market and Daimler 10 percent.
Hiving off overlapping businesses, usually a regulatory demand to ensure more competition, could prove tricky for the automakers because of the technicalities.
FCA and PSA are looking to merge to help offset slowing demand and shoulder the cost of making cleaner vehicles to meet tougher emissions regulations.
The deal puts under one roof FCA's brands such as Fiat, Jeep, Dodge, Ram, Maserati and the French company's Peugeot, Citroen, Opel and DS marques.