TURIN -- A combined PSA Group and Fiat Chrysler Automobiles will have 14 brands, from Alfa Romeo to Peugeot. But would all of them survive?
PSA chief Carlos Tavares, as designated CEO of the combined company, said in November that there were no current plans to scrap any of the brands, but he acknowledged that managing the portfolio would be part of the "challenge" he and his leadership team will face.
The new company would produce 8.7 million vehicles annually, based on current sales, making it the world's fourth-largest automaker. But some of the brands, especially FCA's, have been starved of investment or rely on just one or several models. And there is a risk of geographical or segment overlap.
Tavares suggested that despite his love for storied brand names like Alfa Romeo, some might not survive. "We love the history of car brands, it gives us a foundation on which we can project ourselves into the future," he told the French broadcaster BFM Business.
He said that the merged group could have a "significant number" of brands -- but less than Volkswagen Group, the current No. 1 automaker, with more than 10 million annual sales and 10 passenger car brands, including newer Chinese ones such as Sihao and Jetta.
The Renault Nissan Mitsubishi alliance, which vies with VW for the top spot, has just four brands with global reach (Renault, Nissan, Mitsubishi and Infiniti), as well as regional players such as Alpine, Dacia, Datsun, Lada, Renault Samsung and Venucia.
Toyota, the No. 3 automaker, has just Toyota, Hino and Lexus as global brands, plus regional brands such as Daihatsu.
The following analysis is based on company figures for PSA and Jato Dynamics estimates for FCA, as it does not report sales by brand.
Abarth: Tavares, a racing enthusiast, could have a soft spot for Abarth's high-performance variants of Fiat's mainstream models. As COO of Renault, Tavares was the driving force in the revival of Alpine, the French equivalent to Abarth. Abarth was founded in 1949 and taken over by Fiat in 1971. It was closed in 1981 and restarted in 2007, and now offers performance versions of the Fiat 500 minicar and the recently discontinued 124 Spider, itself a variant of the Mazda MX-5. Sales increased 7.4 percent last year, to 26,736 units. But without an electrified model in its lineup, Abarth is at risk because of stricter EU emissions rules that take effect Jan. 1.
Alfa Romeo: FCA's last three attempts to relaunch this Italian brand with a strong racing heritage failed badly. Founded in 1910 and bought by Fiat in 1986, Alfa had been constantly losing money for almost 20 years.
After ceasing production of the Mito small hatchback and the low-volume 4C coupe and spider, Alfa today offers just three models: the Giulietta compact hatchback, the Giulia midsize sedan and the Stelvio midsize SUV.
Global sales increased by 10 percent in 2018, to 119,269 vehicles, of which 69 percent were in Europe and 21 percent in North America. But in Europe, at least, sales have fallen sharply this year, to 45,232 units through the end of October from 74,746 in the same period in 2018. The Stelvio was the brand's best seller in 2018, at 46,087 units. At the end of October, FCA Mike Manley said that investments into Alfa would be reduced, throwing its future into further doubt. Among the effects: the Giulietta will not be replaced; plug-in hybrid versions of the Giulia and Stelvio will not appear; and two other announced models, a large SUV for the North American market and a high-performance coupe have been killed. The brand will add a small and compact SUV, the latter previewed by the Tonale concept displayed this year at the Geneva auto show. Tavares would have to decide if it is worth the time and money for yet another relaunch for a brand that this year will sell less than 100,000 units globally.
Citroen: This French brand, founded in 1919 and part of PSA since 1976, is in the midst of a strategic repositioning focusing on comfort and seems safe. Citroen now shares underpinnings with other PSA brands, but it is famous for three milestones in automotive history: the Traction Avant of the 1930s, the world's first mass-produced front-wheel-drive car; the 2CV, which brought cheap and quirky transportation to postwar France; and the DS of the 1950s, distinguished by its space age styling and pneumatic suspension and transmission. Citroen sold 1.05 million cars last year, mostly in Europe, with the small C3 hatchback its bestseller with 252,000 units. Sales are down by 3.9 percent this year through the third quarter, and the Chinese market, where Citroen was the first French brand to establish a manufacturing presence, is a particularly weak point, as it is for all PSA brands.
Chrysler: The namesake brand of the North American side of FCA is quietly fading away: It offers just two models, the 300 large sedan and the Pacifica minivan, the latter as the group's only plug-in hybrid. Founded in 1925 and merged into Fiat in 2014, Chrysler last year saw its sales decrease by 13 percent to 178,102 units globally, of which 166,000 were in the U.S. This year sales in the U.S. are down 26 percent through the third quarter. FCA did not announce any new models for Chrysler in its five-year plan unveiled in June 2018.
DS Automobiles: PSA unveiled this upscale brand in 2014, when it relied on versions of Citroen models. The name is a homage to Citroen's legendary flagship sedan, and PSA hoped that it would evoke an image of French luxury and design, especially among Chinese buyers. But sales fell sharply until 2018, when the brand's first all-new model, the DS 7 Crossback compact SUV, was introduced. It was joined this year by the DS 3 Crossback small SUV, and sales are up 8.2 percent through the third quarter. Even so, the Chinese joint venture is being dissolved after production slowed to a trickle. Tavares and DS executives say the brand is profitable, despite selling just 53,300 units in 2018. A new flagship sedan is set to debut next March at the Geneva show.
Dodge: This American brand dates back to 1900 and was acquired by Chrysler in 1928. Today it is focused on performance cars -- the Charger large sedan and the Challenger coupe -- and the lineup includes an SUV, a crossover and a minivan. Its 2018 sales declined by 3.9 percent to 554,782 units, nearly all sold in North America. Sales of the Charger are up this year, likely helped by sales to law enforcement agencies. FCA has not recently announced any new models for Dodge.
Fiat: The namesake brand of the Italian side of FCA turned 120 years old in July. It would be the second-largest brand in the merged company, with 1.38 million units sold last year, after Peugeot. Fiat has substantial manufacturing and sales operations in Europe and Latin America, as well as a successful light-commercial vehicle division, Fiat Professional, which shares with PSA production of the Ducato large family of vans. The brand has abandoned China and is fading in the U.S., where it is discontinuing sales of the 500 minicar. Global sales last year declined 8.5 percent and have fallen by more than 10 percent this year in Europe, its main market. The aging 500 remains Fiat's best seller, and it leads the minicar segment in Europe with the Fiat Panda. But FCA has recently said it would abandon the low-margin minicar segment, suggesting that it would try to move buyers up to the small car segment. A new range of small and compact models could be launched based on PSA's CMP architecture.
Fiat is planning to unveil in March at the Geneva show an electric version of the 500 minicar, but it is seen as lagging behind other automakers in electrification.
Jeep: The brand has passed from American Motors to Renault to Chrysler to Daimler to FCA, but it has thrived under Italian stewardship. When Fiat merged with Chrysler in 2014, Jeep sold 1 million units and had four plants in the U.S. Last year, Jeep increased global sales by 11 percent to 1.55 million units, with a total of 10 manufacturing facilities in the U.S., Mexico, Italy, Brazil, China and India. Its most iconic model is the Wrangler, an heir to the original World War II era Jeeps. Its best-selling model is the Compass compact crossover, with 413,000 units.
A big boost to Jeep sales in Europe could come from an entry model, to slot below the Renegade, that FCA has announced and postponed several times. The so-called B-Jeep now seems slated for a 2022 launch.
Lancia: Now a single-model brand, Lancia looks at risk under a merged company. It could play in the same near-premium segments as DS. Founded in 1906 as an Italian luxury brand focused on design and comfort, it was taken over by Fiat in 1969. Lancia's fortunes began to decline a decade ago when Fiat drastically reduced its pipeline of new models. Two years ago, Lancia was reduced to just the Ypsilon small car -- sold only in Italy, where it found 48,557 customers in 2018, but sales are up considerably this year.
Maserati: The only truly premium brand in the PSA-FCA merger, Maserati was born as a race car maker in Bologna, Italy, in 1914 and moved to Modena in 1937, the first in a long series of ownership changes. Fiat bought an initial stake in 1989 and completed the takeover in 1993, giving full control of Maserati to its then-subsidiary Ferrari. Maserati today builds the Ghibli midsize sedan, Quattroporte large sedan and Levante midsize SUV. Sales last year fell by 28 percent to 35,238 units, and have continued to drop in 2019, as the brand slumped in its two largest markets, China and the U.S. FCA is planning to relaunch Maserati with seven new models between 2020 and 2023, all featuring a battery electric variant.
Opel: With its sister British brand Vauxhall, the German-based brand is the latest addition to PSA's stable after the French group bought it from GM in 2017. Opel produced its first car in 1899, and in 1929 GM took a majority stake in the company, using it as its European arm. But Opel had been losing hundreds of millions of dollars annually in the decades before PSA's acquisition. Sales in 2018 were 1.04 million, and have fallen slightly this year, by 2.2 percent. Under Tavares Opel has been returned to profitability, largely by moving models to PSA platforms and finding efficiencies in purchasing, engineering and other functions. Currently a Europe-only brand, Opel hopes to become more international, starting with re-entering the Russian market. The small Corsa, Opel/Vauxhall's best-seller, has been renewed this year on PSA's CMP platform, including a battery electric version.
Peugeot: The "P" in PSA has a history that dates back more than 200 years, and it would be the largest brand in a PSA-FCA merger, with 1.74 million units sold last year. The family business that preceded the current Peugeot company was founded in 1810 to manufacture coffee mills and bicycles. Armand Peugeot built the company's first car, a steam tricycle in 1889; this was followed in 1890 by an internal combustion car with a Panhard-Daimler engine. Peugeot remained under family control until February 2014, when to stave off financial collapse the family accepted a capital hike in which Dongfeng Motors of China and the French government each bought a 14 percent stake for about 800 million euros each. The Peugeot family stake was consequently reduced to 14 percent.
The majority of Peugeot sales are in Europe, where it is the fourth-best-selling brand after Volkswagen, Renault and Ford. The 208 small hatchback is Peugeot's best seller at 294,000. A new generation is being launched currently, including a battery-electric variant. Other top sellers are the 3008 compact SUV, the 5008 midsize SUV and the newly renewed 2008 small SUV. Sales are down around 20 percent this year, due to slumps in China, Latin America and the Middle East, including the complete loss of the large Iranian market after sanctions were reimposed there.
Ram: Together with Jeep, Ram is the cash cow of FCA's North America region, which in the third quarter delivered 2.02 billion euros in operating profit, equivalent to a 10.6 percent operating margin. The American nameplate had been used for Dodge pickup models before becoming a standalone brand under former FCA CEO Sergio Marchionne in 2009. Sales rose from 263,000 units that year to 720,456 in 2018, and 2019 sales of pickups and vans are up sharply.
Vauxhall: It was founded in 1857 as a pump and marine engine company before turning to cars in the early 20th century. It was acquired by GM in 1925, and in recent decades built and sold Opel models in the UK. Opel CEO Michael Lohscheller recently said that Vauxhall would remain in a merged PSA-FCA, saying that it was the only British volume brand, and that it could offer opportunities, especially with Brexit.
Peter Sigal contributed to this report