By Giulio Piovaccari

MILAN (Reuters) – Carmaker Stellantis, created by the merger of Peugeot-maker PSA and Fiat Chrysler (FCA), aims to lift profit margins this year towards the levels attained by its Chief Executive Carlos Tavares at PSA.

With 14 brands under one roof, including Fiat, Peugeot, Opel, Jeep, Ram and Maserati, the world’s fourth largest carmaker was formed in January.

The group said on Wednesday it was targeting an adjusted operating profit margin of 5.5%-7.5% this year, assuming no further significant COVID-19 related lockdowns.

That compares with a 5.3% aggregated margin last year: 4.3% at FCA and 7.1% at PSA excluding a controlling stake in parts maker Faurecia, which is set to be spun-off from Stellantis shortly.

Tavares delivered an improvement in margins at PSA by cutting costs, simplifying its model range and delivering synergies on its purchase of Opel/Vauxhall.

Milan-listed shares in Stellantis rose as much as 3.3% at the open and were up 2.2% at 0800 GMT.

“Stellantis gets off to a flying start and is fully focused on achieving the full promised synergies,” Tavares said in a statement, announcing last year’s results for FCA and PSA, which the group described as “strong”.

Combined adjusted earnings before interest and tax (EBIT) amounted to 7.1 billion euros ($8.6 billion) last year.

A Milan-based trader said that was “well above” expectations.

Stellantis targets over 5 billion euros a year in savings from the merger, without closing any plants. Tavares has also pledged not to cut jobs.

The automaker proposed to distribute a 1 billion euro dividend to its shareholders.

A capital markets day for the group is planned for late 2021 or early 2022.

($1 = 0.8277 euros)

(Reporting by Giulio Piovaccari. Editing by Mark Potter)