FCA’s Marchionne Predicts More Mergers

Fiat Chrysler Automobiles CEO Sergio Marchionne predicts a new wave of consolidation among carmakers, including a bid for his company from Volkswagen AG.

VW has brushed off the overture, insisting it is concentrating on trimming costs and streamlining itself after an acquisition binge that added MAN, Porsche and Scania to its brand portfolio within the past few years.

But Carlos Ghosn, who heads the Renault-Nissan-Mitsubishi-AvoVAZ alliance, concurs with Marchionne’s outlook. He tells Bloomberg TV "it's logical" for manufacturers to merge to gain economies of scale.

Marchionne has preached that view for years. He is unabashedly shopping for a merger partner for FCA to prove it. After being turned down repeatedly by General Motors Co. two years ago, Marchionne tells reporters he has no qualms about asking GM again, or in pursuing virtually any other prospect. "Why not?" he declares.

But GM’s deal on Monday to shed its money-losing Opel unit by selling it to PSA Group suggests that size for size’s sake isn’t automatically beneficial. Analysts say PSA CEO Carlos Tavares faces considerable hurdles to wring profitability out of Opel—something GM was unable to do for the past 17 years.