ROME, Oct. 6 (Xinhua) -- Stellantis, the entity that will emerge from the merger of Italian-American carmaker Fiat-Chrysler and French rival Peugeot, will be among the world's most important vehicle manufacturers once the deal is finalized.
But analysts say that for it to become a truly global player, Stellantis will have to gain a share in the massive Chinese market.
When the merger worth 50 billion U.S. dollars was announced last year it was applauded by analysts and observers alike, who said the new entity would make its presence felt in all market sectors -- compact cars, luxury vehicles, electric cars, light trucks and four-wheel drive vehicles -- and all over the world, except in China, which is the largest vehicle market worldwide.
"If Stellantis wants to be a global company, its biggest challenge will be to gain a foothold in the Chinese market," Paolo Bricco, an automobile sector analyst who has authored multiple books about Fiat-Chrysler, told Xinhua. "To be on par with Toyota, General Motors and Volkswagen, Stellantis will have to change that."
According to investment bankers Hildebrandt and Ferrar, Fiat-Chrysler and Peugeot together sold 208,500 cars in China in 2019. This figure covered a little less than one percent of the country's fast-growing automobile market.
Hildebrandt and Ferrar, which is scheduled to release a report on the merger before the end of the year, said that when Stellantis is launched, it will be a third-tier player in China behind the main domestic carmakers and the dominant foreign companies, including Volkswagen, Honda, General Motors, and Toyota.
Filippo Fasulo, director of the Business Studies Center of the Italy-China Foundation, said the timing could be good for a new company like Stellantis to try to expand its small foothold.
"The Chinese car market is mature, but it is also in a flux," Fasulo said in an interview. "The priorities are changing, with more and more attention being paid to luxury vehicles and environmentally-friendly vehicles. These are market segments Stellantis would probably benefit from focusing on."
Bricco agreed. "I think the vehicles that would do well in China are Fiat's Maserati as a competitor to BMW and Porsche from Germany, Chrysler's Jeep, and the electric cars from Peugeot," he said. "I was in China last year and I was struck by how good a fit Maserati and Jeep would be in the big cities. I expected to see them already there."
Fasulo said he thought that with the right strategy and products adapted to the Chinese market it would be possible for Stellantis to triple its market share in China within a few years and to expand from there.
"It will be a difficult challenge for sure, maybe the biggest challenge the new company will face," he said. "But the prize of being a major player in the world's largest automobile market is worth the effort."
Last week, Stellantis moved a step closer to finalizing the merger by naming its Board of Directors. It will be headed by Peugeot head Carlos Tavares as chief executive officer and John Elkann, Fiat Chrysler's president, as president. Earlier this year, Tavares said that "rethinking" the new company's strategy in the Chinese market was a top priority. Enditem
