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Fiat Chrysler open to mergers, and PSA is looking for one

GENEVA — Fiat Chrysler (FCA) is open to pursuing alliances and merger opportunities if they make sense, but a sale of its luxury brand Maserati is not an option, Chief Executive Mike Manley said on Tuesday. "We have a strong independent future, but if there is a partnership, a relationship or a merger which strengthens that future, I will look at that," Manley told reporters at the Geneva Motor Show. Asked whether he would consider selling Maserati to China's Geely Automobile Holdings, as suggested by recent media reports, Manley said: "Maserati is one of our really beautiful brands and it has an incredibly bright future. ... No." FCA is often cited as a possible merger candidate. Bloomberg said this week that the Italian-American carmaker was attractive to France's PSA Group given its exposure to the U.S. market and its popular Jeep brand. The Detroit News' headline on the situation Friday read, "Fiat Chrysler CEO open to a deal as PSA circles" and stated that Manley's open-to-just-about-anything comments were aimed directly at PSA. Bloomberg said talks between the two were preliminary and said PSA chief Carlos Tavares has also contemplated mergers with General Motors or Jaguar Land Rover, which is losing money for Indian owner Tata. PSA has enjoyed a decade of turnaround and has $10.2 billion in net cash available. The maker of Peugeot, Citroen and DS, acquired Opel and Vauxhall in 2017 and made them almost instantly profitable. Manley, who took over after the death of Sergio Marchionne, said he currently had no news on possible deals. Manley also said the world's seventh-largest carmaker, which is lagging rivals in developing hybrid and electric vehicles, would take the least costly approach to comply with increasingly more stringent European emissions regulations. "There are three options. You can sell enough electrified vehicles to balance your fleet. Two: You can be part of a pooling scheme. Three is to pay the fines," he said. "I don't see a scenario when (carmakers) continue to subsidize technologies ... indefinitely." The carmaker had said last June it would invest 9 billion euros ($10.19 billion) over the next five years to introduce hybrid and electric cars across all regions to be fully compliant with emissions regulations. Asked about a 5-billion-euro investment plan for Italy FCA announced in November but then put under review, Manley said the plan had been confirmed as originally presented.

Marchionne: Maserati to ‘switch all of its portfolio to electrification’  

After 2019, all Maseratis will be electrified, according to FCA CEO Sergio Marchionne. It's part of a larger electrification strategy from FCA as a whole, which intends to have half of its fleet electrified by the end of its five-year plan through 2022, Marchionne said. On an earnings call last week, he said: I'll give you a couple of broad sort of indications of where we are today in terms of the delineation of the post 2018 FCA. The first one and I've mentioned this in passing and other occasions about the fact that there's nothing that will prevent an OEM from engaging in the type of development work that Tesla has done so far. We have been – as you well know, we have been reluctant to embrace that avenue until we saw a clear – a path forward. I think we're now in a position to acknowledge at least one of our brands and in particular Maserati will, when it completes the development of its next two models effectively switch all of its portfolio to electrification. It's especially significant because of FCA's feet-dragging when it comes to offering hybrid and electric vehicles. As it currently stands, Fiat offers the 500e ­– of which Sergio Marchionne has said "I hope you don't buy it" because the company loses money on them — and Chrysler offers the Pacifica Hybrid minivan, which experienced significant launch delays. While diesel is an important part of the emissions strategy for 2020 standards in Europe, Marchionne said he thinks the current situation leaves diesel in a "weaker state" as a solution. Hence the electrification push. He said, "I think what has really made the issue absolutely mandatory now is the fate of diesel and the fact that it's actually the inclusion of, especially in Europe, of some type of electrification on gas engines is inevitable." In the short term, at least, it will put pressure on prices. Though Marchionne said he's "encouraged" by the direction of battery costs, he said, "I still think that there's going to be a huge increase in prices in 2021, 2022. If effectively the electrification becomes as widespread as people expect, there has to be a shift in pricing." He also says that FCA has no intention of making its own batteries. "Given the level of knowledge and depth of that knowledge that sits with other people in the industry, what right do I have to enter that space? None." We already know what the first two plug-in vehicles from Maserati will likely be. The company plans to launch an all-electric Alfieri in 2020.

Stellantis sees vehicle loan durations extended amid banking turmoil

Stellantis is seeing clients seeking longer-term financing and leasing deals for their vehicles as a consequence of higher global interest rates, the carmaker's head for the business said. Chief Affiliates Officer Philippe de Rovira said loans which normally had a three-year maturity were now increasingly moved to four years. "This allows customers to get a car for a monthly instalment that is similar to that they had before," he said. The world's third largest carmaker by sales on Tuesday announced it had completed a plan announced in late 2021 to reshuffle and simplify its leasing and financing operations in Europe. Under its terms, Stellantis created a 50-50 single long term multi-brand leasing company named Leasys with Credit Agricole Consumer Finance. It also set up local joint ventures in European countries for its new Stellantis Financial Services unit, formerly Banque PSA Finance, with BNP Paribas Personal Finance and Santander Consumer Finance. "These banks have always had better funding conditions than those we can have as an automaker," de Rovira said. Benefits of the plan included cutting the number of financing and leasing entities the group runs in each country and the number of IT systems it uses, with expected savings exceeding 30% in this particular area, he added. De Rovira said the group had a huge portfolio of orders it had not yet delivered due to supply chain shortages impacting production. "Demand is not our main issue. The issue is to deliver as fast as we can cars that are in our order portfolio, which is still at record levels," he said. The group aims to expand its corporate leased vehicle fleet to more than one million units in 2026 and to double net income from its so-called banking activities to 5.8 billion euros ($6.3 billion) by 2030. De Rovira said Stellantis was not seeing a downward trend in vehicle pricing. "Probably the significant price increases we have seen in 2021 and 2022 will not be repeated because the context is changing, but for the moment we don't see decreases, we see stabilisation". ($1 = 0.9188 euros) (Reporting by Giulio Piovaccari and Gilles Guillaume; Editing by Jan Harvey) Earnings/Financials Plants/Manufacturing Alfa Romeo Chrysler Dodge Jeep RAM