MILAN (Reuters) - The European carmakers' association (ACEA) has appointed Fiat Chrysler <FCHA.MI> Chief Executive Mike Manley as its new president from January 2020, it said on Thursday.

Manley will take over the role from PSA <PEUP.PA> Chief Executive Carlos Tavares, who has served two one-year terms as ACEA President, the Brussels-based lobby group said in a statement.

Manley is helping Fiat Chrysler Chairman John Elkann - the head of Italy's Agnelli family which controls FCA - in talks with Tavares to finalize a merger agreement between the two groups which would create the world's fourth-largest automaker.

FCA and PSA, the maker of Peugeot and Citroen, are expected to sign a binding agreement by the end of the year..

ACEA said its priorities for next year included setting a plan on how to manage the transition to carbon-neutral road transport while ensuring the economic sustainability of the European auto sector.

The ACEA president is elected for one year, with the option for a further one year term, by the CEOs of the group's associates - the 15 largest Europe-based car, van, truck and bus manufacturers.

(Reporting by Giulio Piovaccari; Editing by Kirsten Donovan)