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Roundup: Stellantis starts off strongly, replacing Fiat, Peugeot on stock exchanges

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The first day of trading for shares of Stellantis, the multi-national car maker created by the merger of Italian-American vehicle producer Fiat-Chrysler and France’s Peugeot, started out on a high note, with shares on the stock exchanges in Milan and Paris surging.

Trading under the new ticker symbol STLA, the company’s shares soared 7 percent in the first 90 minutes of trading and then slowly climbed from there. The shares closed the day 8.2 percent above their opening level, ending their first day at 13.60 euros (16.42 United States dollars), in heavy trading volume. The new shares will start trading on the New York Stock Exchange on Tuesday.

With Monday’s increases, Stellantis’ market capitalization rose to 42.6 billion euros, up from the 39.4-billion-euro combined market capitalization from Fiat-Chrysler and Peugeot at the close of trading Friday.

John Elkann, Stellantis’ chairman who held the same position at Fiat-Chrysler, said the outlook for the company is strong.

“We have the scale, the resources, the diversity, and the know-how to successfully capture the opportunities presented by the new era in transportation,” Elkann said at the opening bell of the Italian Stock Exchange in Milan.

Both Elkann and Stellantis Chief Executive Officer Carlo Tavares, Peugeot’s former CEO, will fly to New York to represent the company when it starts trading on the world’s largest stock exchange on Tuesday.

Stellantis will start out as the world’s fourth-largest automaker based on the number of vehicles produced. But analysts said it will also begin operations with specific challenges waiting for it, including strengthening the company’s modest market share in China and other Asian markets and developing a lineup of compelling electric car models.

Italian shareholders in the company are also calling for the Italian government to take a stake in Stellantis equivalent to the 6.2 percent share held by the French government based on its previous shareholding in Peugeot.

In Italy, the disappearance of the Fiat name is significant, according to Sergio Noto, an economic history professor at the University of Verona who has co-authored a book on Fiat-Chrysler. Founded in 1899, Fiat — the name is an Italian-language acronym for the “Italian Automobile Factory, Turin” — has been Italy’s flagship industrial concern for generations of Italians.

“Objectively, the Fiat name is not what it used to be,” Noto told Xinhua. “The company went from producing 90 percent of the cars in Italy in the 1960s to around 10 percent today. But it still holds a special meaning for many people in Italy and as of today it’s just a brand name.”

Though Elkann and Tavares both say Stellantis will be a global brand, Noto said the company’s wide array of models could also help it strengthen its presence in the domestic markets.

According to Hildebrandt and Ferrar economist Javier Noriega, economies of scale and efficiency are the factor that will make Stellantis greater than the sum of its parts.

“Stellantis is expected to save around 10 billion euros a year through synergies,” Noriega told Xinhua. “If things go according to plan, the new company will be both bigger and more efficient. The challenges of making that work have already started.” (1 euro = 1.21 United States dollars)

(XINHUA)

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