On 16th June 2015, General Motors (GM) rebuffed Fiat-Chrysler Automobiles (FCA) on a possible GM-FCA merger with an “Okay FCA, just stop!”.

Recently, FCA has been pushing beyond its weight to make overtures to numerous auto-manufacturers, rather incessantly in GM’s case. FCA CEO Marchionne has repeatedly expressed his opinion regarding the inevitable consolidation in the automotive industry towards reaping better synergies, especially when over-capacity is a major unsolved issue which should be attended to sooner rather than later.

FCA and GM presence in SUV and LCV sector

Closely analysing both brands explains GM’s stand: Just like GM, FCA has a strong SUV and LCV portfolio, yet with a much wider reach in the segment.
With 21 models, FCA produces close to 2.2 million vehicles in this category encompassing the Americas, Europe and Asia. With 34 models GM on the other hand barely manages to produce the same number of vehicles as FCA in the SUV and LCV segment and predominantly caters to the Americas only.

Small car and hybrid segment presence
Comparing the small car segment and hybrid capabilities of the two however, we notice that FCA significantly lags behind and finally it becomes clear why Marchionne is pushing for a merger with GM.

Despite serving the same geographical base and with 38 models having two more than GM, FCA rakes in just about 2.1million vehicles in the A/B/C segment which is less than half of what GM produces globally in the same segment. A merger with FCA would therefore be a big gamble for GM, as it would only benefit FCA, while at the same time being a liability to GM.

Meanwhile, GM is trying to run lean by avoiding the addition of any new factory capacity. Since 2010, GM has:

Shut down low volume operations for:

• Hummer
• Pontiac
• Saturn