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Stellantis: The New Name for the Fiat Chrysler-PSA Merger Car Giant


What is a merger car and why should you care?




If you are interested in cars, you may have heard of the term "merger car". But what does it mean exactly? And why should you care about it?




merger car



A merger car is a car that is produced by a combined entity formed by two or more automakers through a strategic alliance or a merger. It is not just a regular car that is branded or marketed by different companies. It is a car that benefits from the shared resources, technologies, platforms, components, markets, and brands of its parent companies.


Merger cars are becoming more common in the automotive industry as automakers face various challenges such as increasing competition, rising costs, changing regulations, shifting consumer preferences, technological disruption, environmental concerns, and global pandemics. By joining forces with other automakers, they can achieve greater scale, efficiency, innovation, diversity, profitability, and sustainability.


In this article, we will explore some of the benefits of merger cars, such as electric vehicle technology, cost savings and synergies, and market access and expansion. We will also look at some of the challenges of merger cars, such as chip shortage and raw material prices, regulatory compliance and consumer preferences, and technological innovation and competition. Finally, we will provide some examples of successful merger cars in the market, such as Renault-Nissan-Mitsubishi Alliance and Fiat Chrysler-PSA Group (Stellantis), and predict some trends and opportunities for merger cars in the future.


Definition of merger car




A merger car is a car that is produced by a combined entity formed by two or more automakers through a strategic alliance or a merger. It is not just a regular car that is branded or marketed by different companies. It is a car that benefits from the shared resources, technologies, platforms, components, markets, and brands of its parent companies.


Merger cars are different from joint ventures, which are temporary collaborations between two or more companies for a specific project or purpose. Merger cars are also different from badge engineering, which is the practice of selling the same car under different names or logos without significant changes.


Merger cars can be classified into two types: horizontal and vertical. Horizontal merger cars are those that are produced by companies that operate in the same segment or market, such as luxury cars or SUVs. Vertical merger cars are those that are produced by companies that operate in different segments or markets, such as mass-market cars or electric vehicles.


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Benefits of merger car




Merger cars offer several benefits for consumers, manufacturers, and the environment. Some of these benefits are:


Electric vehicle technology




Merger cars can leverage electric vehicle technology to improve performance, efficiency, and sustainability. Electric vehicles (EVs) are powered by batteries or fuel cells that can be recharged from external sources of electricity. EVs have lower emissions, lower operating costs, and higher reliability than conventional vehicles that run on gasoline or diesel.


By combining their expertise and resources, merger car companies can develop better EVs that can compete with other automakers and meet the growing demand for green mobility. For example, Fiat Chrysler and PSA Group (Stellantis) have joined forces to create a global leader in EVs, with a target of selling 1 million EVs per year by 2025.


Cost savings and synergies




Merger cars can reduce costs and increase profits by sharing platforms, components, and resources. Platforms are the basic structures and systems that underpin different models of cars. Components are the parts and accessories that make up a car. Resources are the human, financial, and material assets that support the production and distribution of cars.


By sharing these elements, merger car companies can achieve economies of scale and scope, which means they can produce more cars at lower costs and offer more variety to customers. They can also eliminate duplication and inefficiency in their operations and supply chains. For example, Renault-Nissan-Mitsubishi Alliance has saved over 5 billion euros per year by sharing platforms and components across its brands.


Market access and expansion




Merger cars can access new markets and segments by offering diverse products and services. Markets are the geographical areas where customers buy cars. Segments are the groups of customers with similar needs and preferences for cars.


By combining their strengths and capabilities, merger car companies can enter new regions where they have little or no presence, such as emerging markets like China or India. They can also target new customer groups that have different tastes or budgets for cars, such as young drivers or families. For example, Fiat Chrysler-PSA Group (Stellantis) has expanded its global footprint to cover 90% of the world's automotive markets with its 14 brands.


Challenges of merger car




Merger cars face several challenges and risks in the industry. Some of these challenges are:


Chip shortage and raw material prices




Merger cars are affected by the global chip shortage and rising raw material prices that affect the production and supply of cars. Chips are the small electronic devices that control various functions in a car, such as engine management, navigation, entertainment, safety, and connectivity. Raw materials are the natural substances that are used to make parts and components for cars, such as steel, aluminum, copper, rubber, plastic, glass, and lithium.


The chip shortage is caused by a combination of factors, such as the disruption of manufacturing due to the COVID-19 pandemic, the surge in demand for consumer electronics during lockdowns, the trade tensions between the US and China, and the fire at a factory in Japan that produces chips for the auto industry.


The rising raw material prices are caused by a combination of factors, such as the increased demand for metals and minerals for EVs and other applications, the disruption of mining and transportation due to the COVID-19 pandemic, the trade tensions between the US and China, and the environmental and social concerns over mining practices.


These factors have led to higher costs and lower availability of key materials for car production, such as steel, aluminum, copper, rubber, plastic, glass, and lithium.


These challenges have forced merger car companies to adjust their production plans, reduce their output, increase their prices, or seek alternative sources of chips and materials. For example, Renault-Nissan-Mitsubishi Alliance has cut its global production by 500,000 vehicles in 2021 due to the chip shortage. Fiat Chrysler-PSA Group (Stellantis) has temporarily closed some of its plants in Europe and North America due to the same issue.


Regulatory compliance and consumer preferences




Merger cars need to comply with different regulations and meet changing consumer preferences in different regions. Regulations are the rules and standards that govern the safety, emissions, fuel efficiency, quality, and performance of cars. Consumer preferences are the needs and wants of customers for cars, such as price, design, features, comfort, and reliability.


By operating in multiple markets, merger car companies face more complexity and uncertainty in complying with various regulations that may differ or conflict across countries or regions. For example, the US has stricter safety standards than some other markets, while the EU has stricter emissions standards than some other markets. Merger car companies also need to adapt to the changing consumer preferences that may vary or diverge across markets. For example, some consumers may pref


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