The issue impacts models with a certain wheel and brake package, which FCA admits shouldn’t have been an option.
The PSA Group and Fiat Chrysler Automobiles reportedly aren’t planning to ditch any of their brands.
Industry analysts predict that European factories in the new combined company are in risk of closure.
The Trump Administration wants to look carefully over FCA’s merger deal with PSA.
The Fiat Panda and even the 500 might end up getting pulled in favor of sub-compact models.
Market analysts comment that PSA is paying more money than Fiat in order to assume control of FCA.
Fiat-Chrysler currently plans on executing a 50-50 stock swap merger with PSA.
The new FCA-PSA unit is expected to achieve around $4.13 billion (3.7 billion euros) in annual run-rate synergies and have a combined market value of around $50 billion.
An official announcement may come as early as Thursday morning.
PSA and FCA could create one of the world’s leading automotive groups.
The two car makers are currently discussing the possibility of a merger of equals, according to sources.
Other carmakers such as Ford, VW and Honda are fine with California setting its own fuel efficiency regulations.