Confirmed: PSA-FCA won’t cut brands, but those Alfa Romeo sports cars are now dead

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November 11, 2019 08:50 AM

Confirmed: PSA-FCA won’t cut brands, but those Alfa Romeo sports cars are now dead

Job cuts haven’t been ruled out as two auto giants seek to save billions of dollars per year.

Jay Ramey

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Alfa Romeo had been planning a new GTV based on the Giulia for some time, as seen in our rendering, that would have featured a mild-hybrid electric boost system and over 600 hp.

Last month’s surprise announcement of a merger between Fiat Chrysler Automobiles (FCA) and PSA Group, composed of Peugeot, Citroen and Opel/Vauxhall, brought with it fresh fears of a house cleaning as the newly created automaker could tighten its belt and shed unprofitable divisions. The same week the merger was announced Alfa Romeo had reportedly axed two planned sports cars, which were part of a five-year plan announced just over a year ago. 
Plans to cut the 8C halo car and the GTV coupe have now been confirmed, Automotive News reports, adding that plans for a large SUV that was also in the works have been scrapped as well.
The planned 8C halo car was announced as part of the marque’s five-year plan, revealed in the summer of 2018, and was planned to feature a twin-turbo midengine layout with electric boost at the front axle, serving up at least 700 hp. The GTV was planned as a sportier, more powerful version of the Giulia sedan, and would have also featured electric boost.
The new business entity created by the merger, now the fourth largest automaker in the world, is still expected to eliminate redundancies in its global operations to become leaner, but this won’t include putting underperforming brands out to pasture, PSA CEO Carlos Tavares told the French TV station BFM Business according to Automotive News Europe.
“I see that all these brands, without exception, have one thing in common: they have a fabulous history,” Tavares told BFM Business, according to Automotive News Europe. “We love the history of car brands, it gives us a foundation on which we can project ourselves into the future. So today, I don’t see any need, if this deal is concluded, to remove brands because they all have their history and they all have their strengths.”

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But Tavares did not rule out job cuts, pointing out that such steps are common in automotive industry mergers. But he did not indicate where those job cuts could come from as the two auto giants seek to capture billions in cost savings. Specifically, 3.7 billion euros or $4.09 billion annually, Automotive News Europe notes.
To be sure, the global FCA lineup has faced a number of challenges in the past several years, which is what led former FCA boss Sergio Marchionne to seek out mergers with other automakers for much of the decade in order to share development costs and platforms. It’s no secret that out of the two auto giants, it is FCA that has a greater share of older platforms in its brands’ lineups, tallied from the time of their introduction, and arguably faces greater headwinds in North America, its main market that accounts for two-thirds of its revenue, than PSA does in Europe. 
One of the main promises of the merger, according to industry observers, would be FCA’s access to PSA platforms and development for its global offerings, as well as greater market share in Europe, while PSA will gain access to the North American market, which it has eyed for some time. FCA is also expected to improve its European operations with PSA’s help, where it has faced challenges in recent years.
PSA is coming off fresh from the purchase of Opel and Vauxhall from General Motors just two years ago, one that has been met with optimism, but it remains to be seen how PSA handles a much larger merger.

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Source:https://autoweek.com/article/car-news/confirmed-psa-fca-wont-cut-brands-those-alfa-romeo-sports-cars-are-now-dead

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