France's PSA and US-Italian rival Fiat Chrysler have joined forces and will now carry the name Stellantis, becoming the world's fourth-biggest automaker by volume. Delayed by the Covid-19 pandemic, the 50-50 tie up is seen as crucial for the two groups to invest in clean car technology.
The new company, confirmed on Saturday, will bring together producers such as Peugeot, Citroen, Fiat, Chrysler, Jeep, Alfa Romeo and Maserati, each of which will continue under their own brand names.
The 14 Stellantis brands will account for about nine percent of the global auto market. Together they produced eight million vehicles in 2019.
Ranking behind global rivals such as Volkswagen, Renault-Nissan-Mitsubishi and Toyota, Stellantis will be the fourth-largest automaker by volume and the third-largest by revenue, with a workforce of over 400,000.
John Elkann, Fiat chairman and scion of Italy's storied Agnelli family, will retain his role at Stellantis in what he has called "a challenging era".
Coronavirus a 'dent' in the industry
The company is looking to electric-power, to coax back into the new car market drivers who have switched to used cars or rentals, as well as deal with the economic fallout brought on by the ongoing coronavirus pandemic which is putting major dents into many industries.
PSA's global sales -- Peugeot, Citroen, DS, Opel, Vauxhall -- fell by 27.8 percent last year.
The European Commission had been worried the merger could affect competition in Europe's lucrative van market, with PSA and Fiat Chrysler together accounting for 34 percent of market share.
Addressing these concerns, the commission said PSA would continue an agreement with Toyota to manufacture vans to be sold under the Japanese brand in Europe.
PSA and Fiat-Chrysler estimate that their marriage will allow up to five billion euros worth of savings through synergies both in the production costs and research.
Such savings will please shareholders but are a worry to the two workforces.
On the trade union side, most saw the merger as inevitable, but remain on their guard.
"Let's see in a year," said Olivier Lefebvre, a delegate of the French FO union.
On Monday the new group Stellantis, the name derived from the Latin verb "stello" meaning to brighten with stars, will launch on the Milan and Paris stock exchanges followed by its debut in the New York stock market the following day.
On Tuesday Tavares, as Stellantis chief executive officer, will hold the new group's first news conference, laying out the vison for the newly merged automaker.