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Automotive News & Views Chrysler Allies With Fiat
412 messages, Last post on Nov 09, 2009 at 7:02 PM
You are in the Automotive News & Views Forum. Your Hosts are steve_ & claires
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The Chrysler-Fiat (or Fiat-Chrysler?) alliance isn't quite a done deal, since it's not binding yet. However, it makes strategic sense for both companies, Chrysler dealers, and American workers. There's little product overlap, Chrysler would get much needed new product, while Fiat would gain a ready made distribution network that would be grateful for the opportunity to remain alive. Additionally, Chrysler would get expanded distribution for its Jeep models, minivans, and rear wheel Drive cars in Europe. Further, as mentioned in my previous message, Fiat's diesel engines and technology could be very useful to Chrysler. A good strategic fit is hardly a guarantee that Chrysler will survive, or Fiat, for that matter. However, this deal offers a "YES, WE CAN!" type of hope just when Chrysler was given up for dead by many, and at a time when hope is scarce in the auto industry. Another consideration is that this alliance, if it comes to pass and works well, could eventually be expanded to include one or more other automakers. I'm sure Peugeot-Citroen, just to name one possibility, is taking note of this deal.
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This whole story would be better set in "news of the weird". There doesn't seem to be much of an upside for Chrysler except access to a small car platform. Does anyone remember the Strada? I hope Fiats have come a long way since then!
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Replying to: hpmctorque (Jan 21, 2009 2:17 am) |
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The upside for Chrysler is easy to see. It will be a year or two before Fiat has products that can be sold in the U.S. market (at least). In the meantime, Chrysler has an excuse to ask congress for funds to continue operations until the Italian cavalry arrives. It's a plausible plan for viability that they don't otherwise possess... a promise of new product that they can't afford to design themselves. It may not WORK, but it will sell to congress, I think.
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...Italian cavalry arrives. Oh, man, that is funny. Unintentional, perhaps, but still funny. However, I do agree with you on your first point. It's not like Fiat can start selling 500's and Bravo's in the next few months at your local Chrysler dealerships, and it will take even longer to update the factories here in the US to build Fiats locally. The other side of the coin, though, is that Jeeps and minivans were built in Europe at the old DC factories - does Chrysler still retain ownership, or did they go back to Daimler when the company was sold to Cerebus? I was looking at the Fiat UK website ... here's what they offer: 500 - Halo car; would compete well with the Mini. Bravo - The "large" small car that Chrysler can't seem to get right. Spicy alternative to the Golf or Mazda 3. Grande Punto - Seems to slot between the Panda and the Bravo in size, but marketed as more of a sporty alternative to either. Panda - A worthy competitor to the Fit or Yaris. Sedici - Twin to the Suzuki SX4 crossover - makes me wonder if the partnership with Suzuki will continue. Multipla - Segment buster when it was first introduced, but now would compete with the Mazda 5 and the Kia Rondo. Ugly as sin, but I believe that the small minivan market could use something like this. Doblo - A slightly larger people carrier; if Chrysler decided to drop the GC, this might serve well. Qubo - A small van, used as both a commercial vehicle and a Honda Element-like funky people carrier. If Ford is federalizing the Transit for the US, it makes sense for Fiat/Chrysler to offer this as well. What's interesting about the whole deal is that no money is changing hands -- did Cerebus just give Fiat 35% of the company? Tells you how much Cerebus thinks it's worth. |
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Replying to: lokki (Jan 21, 2009 6:51 am) |
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Replying to: lokki (Jan 21, 2009 6:51 am)  The upside for Chrysler is easy to see. It will be a year or two before Fiat has products that can be sold in the U.S. market (at least). It may not WORK, but it will sell to congress, I think. Uuugggghhhhhhh! Do you know how much money Chrysler could lose, that the taxpayer will have to cover, during that time?!! And for what? What benefit would a Chrysler-Fiat be to anyone except those who own or work at Chrysler-Fiat? The U.S. already has Priuses, Insight, Smart, and Ford has the new Fiesta, amongst others. I don't want to shovel $30B into Chrysler to keep it afloat, so that 50K people can buy a Fiat a few years from now!!!  Also the European market is severely declining due to the recession, and I doubt it would be good for anyone to introduce new brands in Europe. The only answer to the current global vehicle market - meaning too many brands and too much production, is for several to go out of business. I don't see it as very logical for each government to prop up their companies, to pay for workers and vehicles no one wants. |
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Replying to: andre1969 (Jan 20, 2009 12:02 pm) Owner of a 2004 Quest |
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Replying to: zoomzoomn (Jan 21, 2009 5:39 am) Yeah. Kind of like the VW Rabbit but without the legendary Volkswagen reliability. 
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Replying to: fezo (Jan 21, 2009 11:02 am)
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