Peugeot's small car platforms should be favored in Fiat merger: executive

MILAN (Reuters) - Small car platforms developed by France's Peugeot should be favored if plans to merge PSA PEUP.PA and Fiat Chrysler FCHA.MI go ahead, PSA executive Gaetano Thorel told Reuters on Wednesday.

FILE PHOTO: The logos of car manufacturers Fiat and Peugeot are seen in front of dealerships of the companies in Saint-Nazaire, France, November 8, 2019. REUTERS/Stephane Mahe/File Photo

Managers on both sides are finalizing discussions to try and create the world’s fourth-largest carmaker, a move that will result in choices being made about which technologies to adopt in the merged entity.

The platforms encompass the underlying structure of a vehicle, or the sets of parts that can be chosen from to build a car.

“On smaller segments PSA has the platforms which allowed the group to make the highest margins in Europe among all the automakers, so I find it reasonable that these platforms might be used in the future on some FCA models too,” Thorel said.

“On the other hand FCA has got RAM and Jeep, and I find it reasonable that the new group might use those platforms in that segment,” Thorel, who is PSA’s managing director for Italy, said.

European labor unions have called on France’s PSA and Italy’s Fiat Chrysler to avoid job cuts and factory closures as the two major carmakers prepare to complete their $50 billion deal and aim for 3.7 billion euros in annual cost savings.

The firms have yet to outline how they can meet that pledge while working toward deadlines to meet stricter emissions goals in Europe, which is likely to add pressure on FCA to adopt PSA’s more efficient engines.

That is turning the spotlight on FCA’s engine plants in Europe, including in Italy and Poland.

Consultancy IHS Markit projected in a recent report that some 1.5 million FCA cars may shift onto the French carmaker’s platforms in the region by 2025.

FCA has become more heavily-geared toward pick-up trucks and SUVs since the 2009 tie-up between Fiat and U.S. centric Chrysler.

But it does have a heritage in small cars too, including its Fiat Panda and Fiat 500 models. An electric version of the latter, developed with one of the company’s own platforms, is due to be unveiled next July.

Depending on the production cycle, some FCA models like the Jeep Renegade, Fiat Doblo vans or the upcoming small electric Alfa Romeo SUV could be likely candidates to shift onto PSA vehicle structures, analysts have said.

PSA recently launched production of the latest Opel Corsa models on the platform also used for its Peugeot 208, two years after the company bought Opel.

FCA declined to comment.

Reporting by Giulio Piovaccari in Milan; Additional reporting by Gilles Guillaume in Paris: Writing in Edward Taylor and Sarah White; Editing by Christoph Steitz and Elaine Hardcastle