merged psa fca aiming to build a world leader in sustainable mobility

Fiat-Chrysler Automobiles has finally found a suitor—and in it, a partner in mobility and electrification. 

FCA and France's Groupe PSA (which operates the Citroën, DS, Opel/Vauxhall and Peugeot brands) announced Thursday that they have reached an agreement to merge operations, creating the fourth-largest automaker in the world with an estimated annual volume of 8.7 million units. The deal will be a true 50-50 combination of the two global automakers, and should save the two more than $4 billion a year in redundant costs without eliminating any of their assembly facilities. 

"In a rapidly changing environment, with new challenges in connected, electrified, shared and autonomous mobility, the combined entity would leverage its strong global R&D footprint and ecosystem to foster innovation and meet these challenges with speed and capital efficiency," PSA's announcement said. 

Several of PSA's brands have launched hybrid and electric vehicles—the Citroën e-Mahari, for example—and both Citroën and Peugeot even dabbled in diesel-electric hybrid automobiles, alongside Mercedes-Benz. For FCA's part, though, this is lofty language for a company whose biggest sustainability play in recent years may have been the one involving cylinder-deactivation tech for its V-8 models.

That may seem hyperbolic, but FCA's electrification efforts continue to lag the industry, especially among other high-volume automakers. Earlier this year, the company paid nearly $2 billion to pool its emissions credits with Tesla's in Europe through 2022; it is also one of the few automakers to side with the Trump administration in its ongoing tiff with California over federal and state fuel efficiency and emissions standards. 

The deal is still in the early stages, and there's a lot that needs to happen before either half of the new company can pivot to new projects, but we may already be seeing the first signs of cost-savings already being outlined to some of the companies' divisions. Alfa Romeo's product road map has been stripped of its performance variants, leaving only three crossovers and the Giulia sedan.

Where the new entity will choose to focus its electrification and autonomy efforts remains to be seen, but we suspect a lot of buzz to surround the re-imagined Fiat 500e, which is due to be introduced next year. Luxury builder Maserati has already committed to the electrification of its lineup, with a hybrid Ghibli due to be revealed in 2020 with a full electric sports car concept to follow. 

On the PSA side, a BEV variant of Opel's Corsa hatchback is expected to be the company's first dedicated electric of the post-GM era; it shares powertrain architecture with sister company Citroën's DS 3 Crossback.