Fiat Chrysler and Peugeot boards accept the auto merger

The board of directors of the French and Italian car manufacturers Fiat Chrysler and Peugeot have accepted the auto merger as equals. This statement from the companies confirms the earlier media writing this week. The shareholders of each company would own 50% of the equity of the newly combined group.

According to the companies, this new combination will create the 4th largest global auto company with 8,7 million vehicles annually. The strength areas would be the FC´s in the North America and Latin America and Peugeot PSA´s strength in Europe. The brand areas would include luxury, premium, mainstream, passenger car, SUVs and Trucks.

-The merged entity would bring together the companies’ extensive and growing capabilities in the technologies shaping the new era of sustainable mobility, including electrified powertrain, autonomous driving and digital connectivity, the companies say in the press release.

The Fiat Chrysler and Peugeot estimate that the annual run-rate synergies would be 3,7 billion euros without any plant closures resulting from the transaction. According to the release, it is argued that 80% of the synergies would be achieved after 4 years.

-The total one-timecost of achieving the synergies is estimated at €2.8 billion, Fiat Chrysler and Peugeot say.

The new company would have Dutch parent company, with Dutch governing rules, and the Board would include a majority of independent Directors. John Elkann would be the Chairman of the Board and Carlos Tavares would be as CEO, but also a member of the board.

It is expected that the companies form the Memorandum of Understanding in the coming weeks.

– Both share the conviction that there is compelling logic for a bold and decisive move that would create an industry leader with the scale, capabilities and resources to capture successfully the opportunities and manage effectively the challenges of the new era in mobility, the companies underline the benefits of the merger.

The new car company would have annual revenues, combined of nearly 170 billion euros and operating profit over 11 billion euros.

 

 

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Brexit: Boris Johnson’s elections rejected

The UK Parliament has rejected the Prime Minister Boris Johnson´s plan for the December 12th elections. He failed to reach the two-thirds majority which was needed.

It is now expected that the Prime Minister will back the Liberal Democrat plan to change the elections earlier, to December 9th. The Labour leader Jeremy Corbyn is also expected to back the earlier elections alhough they have been against all until the no-deal Brexit risk is removed.

 

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VW in talks with electric cars R&D sharing – Bloomberg

 

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HongKong to open Dialoque Office – South China Morning Post

The HongKong city has opened a Dialoque Office in order to start the engagement with different stakeholders regarding the protests in the city.

According to the South China Morning Post, this will help to build bridges in the area with over 100 days of ongoing protests. The city has faced many cancellations in the tourism business due to the protests. According to the newspaper, hotel stays and airplane ticket sales have fallen.

The credit rating company Moody’s have lowered the HongKong’s outlook to negative, but kept the rating the same Aa2 level.

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New sport utility car from the UK? – FT

According to Financial Times, the UK may have a new sport utility car vehicle production, when one of the country’s richest man  Jim Ratcliffe is considering to start the production in Wales.

The newspaper says that the new factory would be in Wales where the US manufacturer Ford is closing its factory. It is expected that this would bring new jobs and new life to the UK automotive industry.

The auto sector is having 82 billion pounds turnover annually and the industry employs directly 186.000 people and over 850 000 indirectly. The UK auto export is about 12 % of the total export of the country.

 

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Elon Musk: Tesla service development is going mobile

The Tesla (TSLA) CEO Elon Musk said in the company conference call yesterday that Tesla´s service development is going mobile, more and more in the future.

-Our mobile service is part of the growing service development, while this is the best way to reach our customers, Musk said.

The company also said it has opened 25 new service locations globally and that they measure the new locations by traffic and driving time. The need for service development is essential while the Tesla fleet have doubled in a year and the growth expectations are also showing the same trend. Also service needs to be scaled.

According to Musk, the car service operations is one of the main drivers for the new car sales. For example during the Q2 period this year, the company generated orders at a high pace.

Tesla is also developing its automation within the cars and for example the automatic stopping at the stop signs and traffic lights is going to part of the new safety automations. The Model 3 has reached the highest ever safety standards in the US Safety Assist Category, the company said.

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