The Wall Street Journal unveiled that French automaker Peugeot had moved toward Fiat Chrysler Automobiles (FCA) about a possible merger earlier this year and then the Financial Times announced that Renault was planning to merge with its Japanese alliance Nissan before presenting their own offer to the Italian-American automaker.
The attractiveness of Fiat Chrysler to potential buyers lies in the 12% market share in North America. In the United States, the automaker focuses mainly on pickups and SUVs, with margins above the industry average and broadly comparable to its competitors Ford and General Motors.
Some of the leading brands around the world who are expected to compete with the manufacturer of Jeeps, Maserati, and Rams. Peugeot has been criticized for its excessive exposure to European demand. About 90% of Peugeot Auto sales happen in Europe, where analysts generally believe the phase is at the top and can slow down.
“The logic is very strong for a rapprochement amid Peugeot and Fiat Chrysler and there is some time,” said an equity analyst at Jefferies, Philippe Houchois.
If Peugeot wants to branch out its geographic blend by developing in the United States, it can endeavor to do it organically, but even if it succeeds, it may not make enough variation to the overall formation of the group.
In the Korean and Japanese car markets, domestic players have developed strongly, influencing the market and offering low costs. In a spin, they transformed national benefits into their export strategies and became global players. However, Chinese automakers have no control over their domestic market and cannot develop in the same way as Japanese and Korean automakers in recent decades.
FCA has also concluded that it will reduce its shifts at its assembly plant at Windsor, Ontario, where the minivans are produced. This in general could lead to loss of 1,500 jobs.
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