(WXYZ) — A new automotive giant is being formed as a merger will happen with FCA and PSA.
Analysts tell 7 Action News Reporter Jim Kiertzner this will be good for Fiat Chrysler in Europe and other foreign car markets. It will also be good for the French parent company of Peugeot to give it much more of a presence here in the U.S. market.
The benefits are better scale. A bigger company means they can share the costs of design and production of cars, effectively lowering their costs. And that includes cars of the future, all-electric and self-driving cars.
The analysts say this will help FCA with much needed smaller cars, more fuel efficient for the European markets and will help PSA here in the U.S. with shared profits and put it into the pickup and SUV market.
Analysts also say this will have little or no effect on the upcoming contract with FCA and the United Autoworkers union, that just ratified a contract with General Motors and is negotiating with Ford.
Speaking of Ford, the analysts say automotive company has established a partnership with Volkswagen and GM has a partnership with Honda for the same business reasons moving forward.
The formal announcement of the FCA-PSA deal is expected Thursday.