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PSA shares rise following FCA's breakup with Renault

Shares in Groupe PSA, parent company of automakers Peugeot, Citroen and the DS brand, rose on Thursday as analysts considered the possibility that Fiat Chrysler could turn back to PSA after withdrawing its $35 billion merger offer for Renault. "Both parties have acknowledged the need for scale or [mergers and acquisitions] and may pursue other opportunities. If Nissan was an obstacle (to an FCA-Renault deal) PSA-FCA discussions could resume," wrote brokerage Jefferies. Back in March at the Geneva Motor Show, rumors started swirling that PSA was interested in a potential merger with FCA. Mike Manley, who took over at the helm of Fiat Chrysler following the death of Sergio Marchionne, had indicated a willingness to look into potential partnership options. Of course, that was all before FCA proposed a merger with Renault — with that deal now off the table, attention naturally turns back to PSA, which is also based in France. "We expect both shares to react negatively but see FCA having wider strategic options and Renault shares more downside risk near-term," said Jefferies. According to Reuters, PSA shares were up 1.5% at the time this was published, making it the top-performing stock on France's benchmark CAC-40 Index. Renault saw its shares slump 7%. Shares for FCA fell 3% in early trading on the Milan Stock Exchange. Considering that FCA said in its statement confirming the withdraw of its merger offer with Renault that "political conditions in France do not currently exist for such a combination to proceed successfully," we have to wonder how keen the company is to begin negotiations with another French automaker like PSA. Those thoughts were similarly voiced by Bernstein Research analyst Max Warburton, who said (via Forbes), "Expect PSA to rise on unrealistic hopes it may be FCA's next date." Earnings/Financials Chrysler Fiat Mitsubishi Nissan Citroen Peugeot Renault FCA renault-nissan

Preserving automotive history costs big bucks

$1.8 million is spent each year to maintain GM's fleet of 600 production and concept cars.
When at least two of the Detroit Three were on the verge of death a few years back, one of the tough questions that was asked of Ford, General Motors and Chrysler execs - outside of why execs were still taking private planes to meetings - was why each company maintained huge archives of old production and concept vehicles. GM, for example, had an 1,100-vehicle collection when talk of a federal bailout began.

Dealer chain accuses FCA of paying dealers to pad sales [UPDATE]

UPDATE: The story has been updated to include a full press release from Fiat Chrysler Automobiles on the Napleton Automotive Group's allegations. A Chicago-based dealership group has filed an explosive lawsuit against Fiat Chrysler Automobiles accusing the company of paying dealers to fake new-vehicle sales, Automotive News reports. Edward Napleton, president of the Napleton Automotive Group, filed the suit on Tuesday. It claims that FCA offered Napleton money to fudge end-of-month sales figures. According to the filing, dealers would report false transactions, only to "back out" at the start of a new month "before the factory warranty on the vehicles could be processed and start to run." According to Automotive News, FCA was aware of the false reports and rewarded dealership managers for hitting sales targets. The lawsuit cites one example at Napleton Arlington Heights Chrysler Jeep Dodge Ram where an FCA business center manager offered Napleton $20,000 "to falsely report the sales of 40 new vehicles." The payment would be disguised "as a co-op advertising credit to the dealer's account." Such a move would prevent a sales audit, AN reports. Napleton rejected the deal, telling FCA it was illegal. He later learned a similar arrangement was made with a competing dealer to falsify the sale of 85 vehicles. They were given "tens of thousands of dollars as an illicit reward for their complicity in the scheme." FCA has vehemently denied the accusation in a statement obtained by Automotive News. "While the lawsuit has not yet been served on FCA US, the company believes that the claim is without merit and was filed by internal counsel to the dealer group as FCA US has concurrently been discussing with the dealer group the need to meet its obligations under some of its dealer agreements," the statement said. "The company is confident in the integrity of its business processes and dealer arrangements and intends to defend this action vigorously." There are additional allegations, as well, claiming FCA "strong-armed its dealers to achieve sales numbers" and accusing the company of maintaining a "pattern of conduct towards its dealers [that] has been one of coercion and threats of termination having nothing to do with the actual performance of its dealers." FCA is riding a wave of 69 consecutive months of year-over-year sales gains. More on this one as it becomes available. FCA Strongly Rejects Allegations by Two U.S.