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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.

2015 Chrysler 200 gets 36 mpg with Tigershark four-cylinder

Chrysler has come out with the official fuel economy information on the new 200 following the info that was leaked from the EPA earlier this week. It turns out that our initial report of 18 miles per gallon in the city and 29 mpg on the highway for the all-wheel-drive V6 was correct.
What we didn't know at the time, though, was what sort of economy the 200's other powertrain options managed. Outfitted with the 2.4-liter four-pot, Chrysler is promising 23 mpg in the city and 36 mpg on the highway, with a combined rating of 28 mpg. Those figures are fairly impressive; besting figures of the 2.5-liter Ford Fusion and tying the 1.5-liter, EcoBoost, non-start-stop model. It's also beats the four-cylinder Toyota Camry's 35-mpg highway figure while tying its combined efficiency.
Stepping up to the 295-horsepower Pentastar V6 pushes the economy down to 19 mpg in the city, while the highway figure is a respectable 32 mpg for the front-driver. The combined rating for the FWD V6 is 23 mpg. Those figures can't quite match the 270-horsepower 2.0-liter, EcoBoost four of the Fusion, which nets 22 city and 33 highway. In fact, the V6 200 has trouble besting even the 3.5-liter V6 of the Camry, which returns 21 mpg city and 31 mpg highway. Again, though, the 200 is noticeably more powerful.

Canada bailed out GM, Chrysler without really knowing what they were getting into

The Auditor General of Canada recently issued a report that makes at least one thing clear: it doesn't know how effective Canadian government loans given to General Motors and Chrysler in 2009 were in ensuring the viability of both companies. That year, the Canadian and Ontario governments dished out $10.8 billion CAD ($9.6B US) to GM and $2.9 billion CAD ($2.6B US) to Chrysler, but hadn't yet sorted out precisely how the funds were to be used before disbursing them. This happened in spite of the fact that, according to a piece in Bloomberg, the loans weren't meant to be handed out until authorities were clear on the manufacturers' plans for reorganization. In fact, federal officials hadn't finished establishing the concessions made by all the involved parties, the pension liabilities, nor the long-term soundness of the automakers' financial positions. On top of that, apparently it didn't keep close tabs on the money after loaning it: the report says that $1B CAD should have been applied to GM Canada pension plans but was instead given to GM to use. Chrysler repaid $1.7 billion, while GM handed back $3.8 billion and Bloomberg believes the feds in Ottawa still own 110 million shares of The General, which, at the stock price as of writing, would be good for another $3.9 billion. Those were mad, bad days, though, and we're not sure what point the report serves, other than to say, "Oh, by the way...." News Source: BloombergImage Credit: Bill Pugliano / Getty Images Government/Legal Chrysler GM bailout