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Stellantis reports surprising 2020 results, is 'off to a flying start'

MILAN — Low global car inventories and cost cuts should boost Stellantis's profit margins this year, though a shortage of semiconductors and investments in electric vehicles could weigh on results, the newly-formed automaker said on Wednesday. The forecast came as Stellantis, created by the January merger of Peugeot-maker PSA and Fiat Chrysler (FCA), reported better-than-expected results for 2020 that sent its shares up around 3% in morning trading. "Stellantis gets off to a flying start and is fully focused on achieving the full promised synergies (from the merger)," Chief Executive Carlos Tavares said in a statement. Stellantis is the world's fourth largest carmaker, with 14 brands including Fiat, Peugeot, Opel, Jeep, Ram and Maserati. It said 2021 results should be helped by three new high-margin Jeep vehicles in North America and a strong pricing environment there. The U.S. market has driven profits for years at FCA and starts off as the strongest part of Stellantis. The group's guidance assumes no more significant lockdowns caused by the global COVID-19 pandemic, which shuttered auto plants around the world last spring. Stellantis should also get a lift as its starts to implement a plan aimed at delivering over 5 billion euros a year in savings, without closing any plants. Tavares has also pledged not to cut jobs. But a pandemic-related global shortage of semiconductors, used for everything from maximizing engine fuel economy to driver-assistance features, could hurt business. Auto industry executives have said the shortage should ease by the second half of 2021. Stellantis said its "electrification offensive" could also weigh on results this year. Automakers are racing to develop electric vehicles to meet tighter CO2 emissions targets in Europe and this week Volvo joined a growing number of carmakers aiming for a fully-electric line-up by 2030. Stellantis plans to have fully-electric or hybrid versions of all of its vehicles available in Europe by 2025, broadly in line with plans at top rivals such as Volkswagen and Renault-Nissan, although Stellantis has further to go to meet that goal. The carmaker is targeting an adjusted operating profit margin of 5.5%-7.5% this year. That compares with a 5.3% aggregated margin last year: 4.3% at FCA and 7.1% at PSA excluding a controlling stake in parts maker Faurecia, which is set to be spun-off from Stellantis shortly.

FCA recalling 323,000 cars for wiring, software issues

The Basics: Fiat Chrysler Automobiles (FCA) is conducting a voluntary recall for an estimated 323,361 cars in the US. The affected vehicles were built after September 23, 2014 and include: the 2015 Chrysler 200, Ram ProMaster City, Jeep Renegade, and 2014 and 2015 Jeep Cherokees. The Problem: An insufficient crimp in the vehicles' wiring harness may result in a solenoid fault code, which could cause the engine to stop. The loss of power could lead to an accident. Injuries/Deaths: None reported. The Fix: FCA will update the affected vehicles' software and replace wire harnesses, as needed. According to FCA, owners that experience the problem can temporarily resolve the issue by restarting the vehicle. If you own one: FCA is reaching out to owners to schedule a service. Related Video: Statement: Wire Harness Crimp July 22, 2016 , Auburn Hills, Mich. - FCA US LLC is voluntarily recalling an estimated 323,361 vehicles in the U.S. to update certain software and replace wire harnesses, as needed. An examination of warranty data led to an FCA US investigation that discovered an insufficient crimp in a wire harness. Such a crimp may lead to a solenoid fault code that can cause propulsion loss. The Company is unaware of any related injuries or accidents. Most vehicles in the recall population will not experience this fault code over their lifetimes. However, should the condition occur, it can typically be temporarily resolved by stopping the vehicle and re-starting its engine. Accordingly, FCA US urges customers to heed the instructions on their recall notices. Affected are certain model-year 2015 Chrysler 200 midsize sedans, Ram ProMaster City small vans, Jeep Renegade and Cherokee SUVs. Certain model-year 2014 Cherokees are also affected. A change made in the harness-manufacturing process eliminates the need to recall any vehicle built after Sept. 23, 2014. An estimated 35,511 additional vehicles in Canada are included in the campaign; as are 7,067 in Mexico; and 43,927 outside the NAFTA region. Customers will be advised when they may schedule service. Those with questions may call the FCA US Customer Care Center at 1-800-853-1403. News Source: FCAImage Credit: AOL Recalls Chrysler Jeep RAM FCA jeep renegade ram promaster city

FCA and Peugeot reportedly agree on merger

Citing a Wall Street Journal report, the Detroit Free Press says "Fiat Chrysler and PSA Groupe have agreed to merge." The Journal reported on talks between the two car companies only yesterday. It's said that Peugeot's board met yesterday to approve the deal, FCA's board met today, and an announcement could come as soon as tomorrow, Thursday. Both automakers have released statements, but neither company has released any information beyond admitting to ongoing talks. If the merger happens, the combined entity would become the world's fourth-largest carmaker with a $50 billion valuation, slotting in behind Toyota, the Volkswagen Group, and the Renault Nissan Mitsubishi alliance. Among the merger options possible, "an all-stock merger of equals" is the one analysts and Moody's seem to give the best grade. The reported merger would come about four months after FCA walked away from merger talks with Renault. FCA said the French government scuppered those talks over the role of Nissan in a reformed entity, but there were also brewing issues with French unions, and ongoing turmoil among Renault and Nissan leadership thanks to continuing fallout from ex-CEO Carlos Ghosn's arrest last year. FCA makes most of its revenue in the U.S. and rules Italy, while Peugeot is the second-best-selling automaker in Europe with its own brand in France and Opel in Germany. The two companies already have a partnership in Europe making vans, one that FCA CEO Mike Manley has spoken highly of. Among the list of obvious benefits in a potential merger, FCA would get access to Peugeot's small, modern platforms, $10.2 billion in cash, and electrified and hybrid architecture developments, the latter especially important to FCA as those are fields where it lags. Peugeot would get much easier access to the U.S. market, and the money-printing brands Jeep and Ram. A merged carmaker would have combined sales of nearly 9 million a year, based on 2018 results. By comparison, both Volkswagen and Toyota sell over 10 million cars a year, while the Renault-Nissan-Mitsubishi alliance almost 11 million. Peugeot CEO Carlos Tavares has proved he knows how to do turnarounds and mergers. After leaving a position as Carlos Ghosn's right-hand man in 2012, Tavares took over Peugeot in 2014, navigated a bailout from the French government and China's Dongfeng Motors in 2015, and turned PSA into a regional powerhouse.