Stellantis: The Birth of a New Automotive Star from FCA and PSA

Stellantis: The Story of a Star-Studded Merger. Stellantis is the name of the new company formed by the merger of Fiat Chrysler Automobiles (FCA) and PSA Group, which was completed on January 16, 2021.

The name Stellantis comes from the Latin word "stello", which means "to brighten with stars". The company aims to be a leader in the global automotive industry, with a portfolio of 14 iconic brands, such as Jeep, Peugeot, Ram, Citroën, Dodge, Opel, and Maserati. But how did this merger come to be? What were the challenges and opportunities that led to the creation of Stellantis? This article will explore the history of Stellantis, from its origins to its present.

The Origins of FCA and PSA

FCA and PSA are both the result of previous mergers and acquisitions that shaped their history and identity. FCA was formed in 2014 by the merger of Fiat S.p.A. and Chrysler Group LLC, two companies that had a long-standing partnership since 2009. Fiat was founded in 1899 in Turin, Italy, by a group of investors led by Giovanni Agnelli. Fiat became one of the largest and most influential car manufacturers in Europe, with brands such as Alfa Romeo, Lancia, Ferrari, and Maserati. Chrysler was founded in 1925 in Detroit, Michigan, by Walter P. Chrysler. Chrysler grew to become one of the "Big Three" American automakers, along with Ford and General Motors, with brands such as Dodge, Plymouth, Jeep, and Ram.

PSA was formed in 1976 by the merger of Peugeot S.A. and Citroën S.A., two companies that had a history of collaboration since 1965. Peugeot was founded in 1810 in Sochaux, France, by Jean-Pierre Peugeot and his family. Peugeot started as a manufacturer of coffee mills and bicycles, before entering the automotive industry in 1889. Citroën was founded in 1919 in Paris, France, by André Citroën. Citroën became known for its innovative and distinctive cars, such as the Traction Avant, the 2CV, and the DS. PSA expanded its portfolio by acquiring other brands, such as Simca, Talbot, Chrysler Europe (which became Talbot), and DS.

The Failed Merger with Renault

In May 2019, FCA proposed a merger with Renault S.A., another French carmaker that had an alliance with Nissan Motor Co. and Mitsubishi Motors Corp.. The proposed merger would have created the world's third-largest automaker by sales volume, behind Volkswagen Group and Toyota Motor Corp.. The merger would have also allowed FCA and Renault to share costs and technologies in areas such as electric vehicles (EVs), autonomous driving (AD), and connectivity.

However, the merger faced several obstacles and complications. One of them was the role of the French government, which owned 15% of Renault's shares and had two seats on its board. The French government wanted to secure its influence over the merged entity, as well as to protect jobs and plants in France. Another obstacle was the reaction of Nissan, which had a strained relationship with Renault since the arrest of Carlos Ghosn, the former chairman and CEO of both companies. Nissan feared that the merger would weaken its position within the alliance and reduce its autonomy.

After weeks of negotiations and discussions, FCA withdrew its offer on June 6, 2019. FCA blamed the French government for demanding more time to win Nissan's approval. The French government blamed FCA for being too hasty and not giving enough guarantees on jobs and governance. The failed merger was seen as a missed opportunity for both companies to gain scale and competitiveness in a changing industry.

The Successful Merger with PSA

On October 31, 2019, FCA announced that it had reached an agreement with PSA to pursue a 50/50 merger. The announcement came as a surprise to many observers, who had expected FCA to look for another partner after the Renault deal collapsed. However, FCA and PSA had been in talks for several months before making their move public. The two companies had several reasons to join forces:

• - They had complementary geographic footprints: FCA was strong in North America and Latin America, while PSA was strong in Europe and Africa.
• - They had complementary product portfolios: FCA had popular brands in SUVs, pickup trucks, and luxury cars, while PSA had popular brands in compact cars and vans.
• - They had similar visions and strategies: Both companies were focused on improving profitability, efficiency, and innovation, rather than chasing volume and market share.
• - They had compatible cultures and values: Both companies were led by charismatic and visionary leaders, John Elkann and Carlos Tavares, who shared a common respect and trust.

The merger was approved by the shareholders of both companies on January 4, 2021, with more than 99% of votes in favor. The merger was also approved by the regulatory authorities of various countries, such as the European Union, the United States, China, and Brazil. The merger was completed on January 16, 2021, and the new company was officially named Stellantis. The name Stellantis comes from the Latin word "stello", which means "to brighten with stars". The name reflects the ambition and vision of the new company to be a leader in the global automotive industry.

The Future of Stellantis

Stellantis is the world's fourth-largest automaker by sales volume, behind Volkswagen Group, Toyota Motor Corp., and Renault-Nissan-Mitsubishi Alliance. The company has a presence in more than 130 countries, with approximately 400,000 employees and a combined annual revenue of nearly €165 billion. The company claims to have the scale, the resources, and the expertise to capitalize on the opportunities and challenges of the new era of sustainable mobility.

Stellantis has four global electric vehicle (EV) platforms, which can cover all market segments and offer a range of driving ranges and power outputs. The company also has a dedicated business unit for hydrogen fuel cell vehicles, which are considered to be zero-emission and have a longer range than battery EVs. Stellantis is committed to reaching carbon net zero by 2038, as well as to creating shared and long-lasting value for all its stakeholders.

Stellantis has 14 brands: Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, DS, Fiat, Fiat Professional, Jeep, Lancia, Maserati, Mopar, Opel, Peugeot, Ram, and Vauxhall. The company plans to invest in each brand and give them the autonomy and resources to develop their identity and potential. The company also plans to launch more than 40 new or refreshed models in 2021, as well as to expand its presence in emerging markets such as China and India.

Stellantis is a new automotive giant with a bold vision. The company aims to leverage its diverse portfolio of brands, its global presence, and its innovative capabilities to create value for its customers, shareholders, employees, partners, and society at large. Stellantis is ready to lead the way the world moves.

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