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Why FCA-PSA merger is no quick fix for their China problem

BEIJING — Fiat Chrysler and Peugeot owner PSA's merger is unlikely to provide a quick fix to their problems in China, as both companies have long struggled to find the right products at the right price for the world's top car market, analysts say. The companies said on Thursday they aimed to reach a binding deal in the coming weeks to create the world's fourth-biggest automaker by production volume. But scale alone will not make Italian-American Fiat Chrysler Automobiles (FCA) and France's PSA Group more competitive in a market where they have been slow to adapt to trends and win over consumers, leading their sales to lag far behind foreign rivals such as Volkswagen and General Motors. PSA does not have enough competitive SUV models, and neither company has enough electric and plug-in hybrid vehicles, or enough cars packed with hi-tech features for Chinese tastes, analysts say. In a market where 28 million cars were bought in 2018, FCA sold just 155,215, while PSA sold 257,723, according to consultancy LMC Automotive. At the end of September, FCA had a market share of 0.5% in China's passenger car market, while PSA's was 0.6%. Analysts say they have been squeezed by Japanese and local brands, which have product line-ups better suited to Chinese tastes at cheaper prices. "Both companies are very home-market centred and have failed to adapt to shifts in Chinese market preferences," said Bill Russo, head of Shanghai-based consultancy Automobility Ltd and a former senior Asia-based Chrysler executive. "Neither company has recognized and delivered on the trends of shared, connected and electric vehicles,” Russo said. That makes them ill-prepared to deal with further shifts in the Chinese market, which saw annual sales contract for the first time since the 1990s last year and is expected to see another drop this year. "China's overall market is experiencing a transmission and adjustment period," said Alan Kang, a Shanghai-based senior analyst at LMC Automotive. "It is very hard for these two companies, which do not have enough competitive up-to-date products, to quickly recover with the merger." FCA has a partnership in China with Guangzhou Automobile Group, which said on Thursday it backed the merger. PSA has been trying to reboot its operations in China.

So, just how different are the Fiat 124 Spider and Mazda MX-5 Miata?

"We leveraged a great platform." That's how Bob Broderdorf, Jr., Fiat's North American director, summarizes the creation of the 124 Spider. We all know Fiat's new roadster shares its underpinnings with the fourth-generation Mazda MX-5 Miata, but there are a lot of key differences to keep them separate in the eyes of consumers. Mazda may have engineered the platform, but Fiat added many of its own touches. Here, we'll take a closer look at the spec sheets of the two cars, and summarize the major differences between the Japanese and Italian roadsters. If you need a refresher, read our full First Drive of the 2016 MX-5 Miata, and glance at all the Fiat 124 Spider details in this post. Design Fiat Chrysler design lead Ralph Gilles is super excited about this car. "I think it's going to change lives," he told the assembled media at an event in Auburn Hills, MI, earlier this month. Yes, it's definitely exciting to add a small roadster to any lineup, especially one that uses such a proven platform. But we're not sure people are going to get all that jazzed about it from a design standpoint. You'll either love it or hate it, and we're kind of leaning toward the latter. Every single body panel is new, and the design is "100 percent Italian." There are a number of creases and angles throughout the exterior, with a squared-off rear end and rectangular taillamps. Fiat trusts you'll be able to spot the similarities between the new 124 Spider and the original, but we're not so sure. We can see a bit of the old car's grille on the new car's face, and the dual hood blisters are a nice throwback touch, but that's about it. Trust us when we say that this car looks way better in photos. In person, it really didn't wow us. Of course, beauty is in the eye of the beholder. One colleague told us his wife, a long-time Miata owner, hates the look of the new one but will absolutely adore the Fiat. Good for her, and good for Fiat. But based on design alone, we'll take the Mazda every single time. What about you? Dimensions When Broderdorf said Fiat leveraged the Miata's platform, that means the Italians took it as-is. The two cars ride on an identical, 90.9-inch wheelbase. The front and rear tracks lengths are the same, at 58.9 and 59.1 inches, respectively. But that's where the similarities end.

Fiat Chrysler recalls 1.33 million vehicles over fire, air bag risks

WASHINGTON - Fiat Chrysler Automobiles NV said on Friday it is recalling 1.33 million vehicles worldwide in two separate campaigns for potential fire risks and inadvertent airbag deployments. The Italian-American automaker said it is recalling about 770,000 sport utility vehicles because of a wiring issue that may lead to inadvertent deployment of the driver-side air bag and is linked to reports of five related minor injuries, but no crashes. The company said wiring could chafe against pieces of steering-wheel trim, potentially causing a short-circuit and ultimately leading to an inadvertent air bag deployment. The issue could also cause unintended windshield wiper operation or inoperable switches. The recall covers 538,000 2011-2015 Dodge Journey vehicles in North America and 233,000 2011-2015 Fiat Freemont crossovers sold elsewhere. Dealers will inspect and replace the wiring, as needed and equip it with additional protective covering. The automaker is also recalling 565,000 vehicles to replace their alternators because of fire risks. The company said hot ambient temperatures could lead to premature diode wear, may result in a burning odor or smoke, could impact the anti-lock braking system or lead to engine stalls. The company said it is aware of two potentially related accidents but no injuries. The recall covers 2011-2014 model year Chrysler 300, Dodge Charger and Dodge Challenger cars and Dodge Durango SUVs and 2012-2014 Jeep Grand Cherokee SUVs. In October, Fiat Chrysler recalled about 86,000 Ram 2500 and 3500 pickup trucks, 3500, 4500 and 5500 chassis cabs from the 2007-2013 model years and 2011-2014 Dodge Charger Pursuit sedans for the same alternator issue. Fiat Chrysler said at the time one minor injury was related to the recall. Dealers will replace the alternators. By David ShepardsonRelated Video: Auto News Chrysler Fiat RAM Safety Coupe SUV Sedan FCA dodge journey fiat chrysler automobiles fiat freemont