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PSA reportedly ditching its two tiny gasoline city cars ahead of merger

The Peugeot 108.   PARIS — PSA is ending the production of Peugeot and Citroen small city cars, three sources told Reuters, withdrawing from an increasingly unprofitable market as its starts a strategic review ahead of its planned merger with Fiat Chrysler. While PSA had already agreed to sell its stake in its Czech joint venture with Toyota where the Peugeot 108 and Citroen C1 models are made, the decision to stop selling the gasoline cars altogether has just been taken, the sources said. Carmakers are reviewing the production of vehicles with combustion engines as they need to fit costly exhaust filtering systems to meet tighter emissions laws. That's pushing up the cost of some so-called entry-level A segment cars to the point where they are hard to justify economically. "PSA is getting out of both the factory and the A segment business, as it is offered today, and on which manufacturers have arguably lost the most money in Europe," one of the sources familiar with the matter said. PSA declined to comment on the future of the two small cars. It said it was reviewing which products would best meet customer expectations in the A segment and cope with European carbon emissions targets. "This means a reflection with fresh and disruptive ideas," a spokesman for the French carmaker said. The European Commission is planning to tighten its emissions limits for cars under new proposals designed to cut the bloc's greenhouse gas output further by 2030. PSA's merger project with FCA has also increased the options available, two of the sources said, as the Italian-U.S. company has no intention of abandoning its small best-selling Panda and 500 models. Both already have hybrid versions and the 500 is also available in full electric mode. "Current projects could be replaced by new ones made possible by the merger with FCA", another source said. "The merger is turning all the cards around, especially when you consider that the A segment, from the very first 500 to the Panda, is inseparable from Fiat history". FCA declined to comment. PSA and FCA aim to finalize their merger in the first quarter next year to create a new company called Stellantis, which will be the fourth-biggest automaker in the world. Market contraction The European market for frugal city cars has been shrinking for several years.

Feds sue Fiat Chrysler, accuse it of cheating on diesel emissions

WASHINGTON - The US government has filed a civil lawsuit accusing Fiat Chrysler Automobiles NV of using software to bypass emission controls in diesel vehicles. The Justice Department suit, filed in US district court in Detroit, is a procedural step that may ramp up pressure on Fiat Chrysler. The suit could ultimately help lead to a settlement, as in an earlier probe of rival Volkswagen AG that will cost VW up to $25 billion, but which affected a much larger number of vehicles. VW admitted to intentionally cheating while Fiat Chrysler denies wrongdoing. It did not immediately comment on Tuesday. US-listed Fiat Chrysler shares were down 2.9 percent at $10.44. The suit also names Fiat Chrysler's unit V.M. Motori SpA, which designed the engine in question. Reuters reported last week the Justice Department and EPA have obtained internal emails and other documents written in Italian that look at engine development and emissions issues that raise significant questions. The investigation has scrutinized VM Motori. FCA acquired a 50 percent stake in VM Motori in 2010 and the remainder in October 2013. The lawsuit asserts the Italian-American automaker placed undeclared "defeat devices," or auxiliary emissions controls, in 2014-2016 Fiat Chrysler diesel vehicles that led to "much higher" than allowable levels of nitrogen oxide, or NOx pollution, which is linked to smog formation and respiratory problems. The suit seeks injunctive relief and unspecified civil penalties. EPA said in January the maximum fine is about $4.6 billion. In January, EPA and California accused Fiat Chrysler of illegally using undisclosed software to allow excess diesel emissions in 104,000 U.S. 2014-2016 Jeep Grand Cherokees and Dodge Ram 1500 trucks. Fiat Chrysler said on Friday it plans to update software that it expects will resolve the concerns of U.S. regulators about excess emissions in those vehicles. The January notice was the result of regulators' investigation of rival Volkswagen, which prompted the government to review emissions from all other passenger diesel vehicles. Volkswagen admitted in September 2015 to installing secret software allowing its cars to emit up to 40 times legal pollution levels. In total, VW has agreed to spend up to $25 billion in the United States to address claims from owners, environmental regulators, states and dealers and offered to buy back about 500,000 polluting US vehicles.

Sell your own: 2015 Fiat 500 Abarth

Looking to sell your car? We make it both easy and free. Quickly create listings with up to six photos and reach millions of buyers. Log in and create your free listings. Bred from the rich postwar history of Fiat and its competition counterpart, Abarth, Fiat Chrysler reintroduced the Fiat 500 Abarth to US showrooms in 2012. It had been a long time since US drivers had access to a small, easy-to-park Italian package. Mini's Cooper S provided Fiat Chrysler with the market research, and like Burger King locating next to a McDonald's, Fiat's 500 Abarth was ushered into US showrooms. With the 500 delivering just over 100 horsepower, the Abarth (a-BART) supplies a full 160 horsepower to the front wheels, along with an oh-so-flexible 170 pound-feet of torque. Driving through a five-speed manual (or available automatic), and planted on a short 90-inch wheelbase, the 500 Abarth offers the engagement your friends (prior to the iPhone) used to provide. Our 'for sale' 2015 example, located in Prescott, Arizona, looks to be in good cosmetic condition. With but 24,000 miles it should have plenty of high-revving life left in it. We'd always suggest a pre-purchase inspection, and those with rural zip codes should consider Fiat dealer support. But if looking for bang-for-the-buck (and the seller's 'ask' is right where it should be), there are few better options this side of $20,000. Please find the listing here. Related Video: