Why EU regulators could be looking at PSA, FCA van shares

Under CEO Carlos Tavares, PSA Group has made commercial vans a centerpiece of the automaker's growth strategy, with the target of doubling profits in the lucrative segment from 2016 until 2021 under the Push to Pass midterm plan.

Following the acquisition of Opel/Vauxhall in 2017, PSA had a 25 percent share of the European light commercial vehicle market in 2019, driven by new versions of small and medium vans across its brands.

That figure may have drawn the notice of EU competition authorities, who are scrutinizing PSA’s proposed merger with Fiat Chrysler Automobiles. According to news reports, regulators have raised concerns about the combined company’s potential market share in small vans.

PSA and FCA have been asked to address the concerns, the reports said, ahead of a June 17 deadline for the EU to finish a preliminary review of the deal, which is expected to close by the end of the first quarter of 2021.

The two automakers already collaborate on building large vans, and have worked on vans of other sizes in the past. Together, they had a total of about 34 percent of the European LCV market in 2019, according to industry group ACEA. Renault and Ford each had about 16 percent.

But a look at PSA’s home market, France, shows that a combined PSA-FCA could have an LCV share as high as 45 percent, a figure that may have drawn the attention of EU competition officials. The automakers' combined LCV market share figure in Italy would by as high as 48 percent share. 

There is no exact sales threshold per country or segment that could trigger an official review from the competition authorities, said Stefano Aversa, chairman of Europe, the Middle East and Africa (EMEA) at AlixPartners, but any figure above 40 percent “and you would be in the ‘interest’ zone,” he said.

According to figures from French industry group CCFA, PSA Group had a 35 percent LCV market share in 2019, while Fiat held a 7.8 percent.

It is difficult to break out figures for small vans, but PSA’s Europewide sales in that segment have increased sharply with the introduction of a new Opel/Vauxhall Combo in 2018 as a companion model to the strong-selling Citroen Berlingo and Peugeot Partner. In France, those two models alone held more than 11 percent of the overall LCV market.

If EU authorities decide that a combined PSA-FCA had a dominant position in a certain country or segment, potential remedies would include a requirement that one of the brands be kept out of the market. 

Tavares said in February that he saw no hurdles to winning antitrust approval for the deal. "We have no reason to believe there will be any problems, including on the LCV side," he said. "But our stance is very simple: Whatever we have to discuss or modify, we will."

AlixPartners' Aversa noted that PSA and FCA have been collaborating on large vans for decades, at the Sevel joint venture plants in France and Italy, although the cooperation in France ended in 2012. FCA also used to assemble small vans for PSA, the Peugeot Bipper and Citroen Nemo, at FCA’s Tofas facility in Turkey until 2017.

“They have been partners for 30-plus years,” Aversa said. “You might argue that they have had these synergies for years” at the platform level.

The two automakers’ remaining joint factory in southern Italy produced about 300,000 large vans last year: 163,000 Fiat Ducatos and 237,000 units of the Peugeot Boxer and Citroen Jumper.

PSA’s smaller vans, the midsize Peugeot Expert and Citroen Jumpy, are built at its factory in Hordain, northern France, (itself a former PSA/Fiat joint venture). Compact vans -- the Peugeot Partner, Citroen Berlingo and Opel Vivaro -- are built in neighboring factories in northern Spain and Portugal. 

A Vauxhall-branded version of the Vivaro is built in Luton, England. Opel’s large van, the Movano, has been built by Renault in Batilly, northern France, but is expected to move to a PSA site, possibly in Poland.

Among Fiat’s smaller vans, the midsize Talento is built by Renault in Sandouville, northern France, while the compact Doblo and small Fiorino are built by the Tofas JV in Turkey.