Post by Buffalo Phil on Jan 21, 2009 9:31:26 GMT -5
www.chicagotribune.com/business/chi-wed-fiat-chrysler-jan21,0,165833.story
A quarter-century after saying arrivederci to America, Fiat might be poised for a U.S. comeback.
The Italian conglomerate, which sells vehicles under the Fiat, Alfa Romeo, Lancia, Maserati and Ferrari nameplates, will form a strategic alliance with Chrysler LLC that would give the Italian auto empire a 35 percent stake in the troubled U.S. carmaker and eventually could bring it full control.
The deal means Chrysler, which is fighting off bankruptcy and struggling to sell less-fuel-efficient larger models, would have access to new markets and cheaper, more environmentally friendly technologies.
Fiat Group SpA, which makes Fiat, Lancia and Alfa Romeo vehicles, would gain a foothold in the huge U.S. market. The company has bounced back recently with such cars as the tiny 500, a hit remake of an earlier iconic Fiat model.
The two companies said in a joint statement Tuesday that in exchange for sharing its small-car platforms and fuel-efficient engines, Fiat would take an "initial" 35 percent stake in Chrysler but would not invest cash.
The deal could have obvious upsides for Chrysler, which has a lineup sorely lacking in small cars and a very limited international presence.
With 2008 sales down 30 percent, it recently had to accept $5.5 billion in federal loans to stay afloat, including $1.5 billion to its financing arm last week.
But a pairing also could be a huge winner for Fiat, which has been angling to get its popular 500 model, as well as the stylish Alfa Romeo luxury brand, to American consumers for years. Chrysler's infrastructure could allow the Italian company to do that on the cheap.
"This makes a lot of sense," said auto analyst Jim Hall of 2953 Analytics. "Fiat has had its eyes on this market for some time."
Analysts said a deal could be a boon for both carmakers, as well as consumers.
"Fiat really wants to grow around the world, and there's a lot of potential for growth here," said Rebecca Lindland, an analyst at IHS Global Insight.
After decades selling in the U.S., Fiat abandoned the market in 1984. At the time the brand had a reputation of being unreliable. In the past 25 years, however, Fiat has built upon its strengths in other markets, making it, for example, the largest carmaker by volume in Brazil.
Last year the company introduced the Fiat 500, a two-door hatchback designed to compete with BMW's Mini. An instant hit, the 500 won the 2008 European car of the year award, and U.S. fans have been salivating at the thought of driving one.
"It's adorable," Lindland said.
Sergio Marchionne, chief executive of Fiat, has said he hopes to sell the 500 in the U.S. and had been looking for partnerships that would give his company a distribution infrastructure without having to build one from the ground up.
The Associated Press contributed to this report.
Fiat Returns to the American Market? Would seem pretty strange seeing as how Fiat never got back into the American market because they couldnt comply with our emissions regulations...
A quarter-century after saying arrivederci to America, Fiat might be poised for a U.S. comeback.
The Italian conglomerate, which sells vehicles under the Fiat, Alfa Romeo, Lancia, Maserati and Ferrari nameplates, will form a strategic alliance with Chrysler LLC that would give the Italian auto empire a 35 percent stake in the troubled U.S. carmaker and eventually could bring it full control.
The deal means Chrysler, which is fighting off bankruptcy and struggling to sell less-fuel-efficient larger models, would have access to new markets and cheaper, more environmentally friendly technologies.
Fiat Group SpA, which makes Fiat, Lancia and Alfa Romeo vehicles, would gain a foothold in the huge U.S. market. The company has bounced back recently with such cars as the tiny 500, a hit remake of an earlier iconic Fiat model.
The two companies said in a joint statement Tuesday that in exchange for sharing its small-car platforms and fuel-efficient engines, Fiat would take an "initial" 35 percent stake in Chrysler but would not invest cash.
The deal could have obvious upsides for Chrysler, which has a lineup sorely lacking in small cars and a very limited international presence.
With 2008 sales down 30 percent, it recently had to accept $5.5 billion in federal loans to stay afloat, including $1.5 billion to its financing arm last week.
But a pairing also could be a huge winner for Fiat, which has been angling to get its popular 500 model, as well as the stylish Alfa Romeo luxury brand, to American consumers for years. Chrysler's infrastructure could allow the Italian company to do that on the cheap.
"This makes a lot of sense," said auto analyst Jim Hall of 2953 Analytics. "Fiat has had its eyes on this market for some time."
Analysts said a deal could be a boon for both carmakers, as well as consumers.
"Fiat really wants to grow around the world, and there's a lot of potential for growth here," said Rebecca Lindland, an analyst at IHS Global Insight.
After decades selling in the U.S., Fiat abandoned the market in 1984. At the time the brand had a reputation of being unreliable. In the past 25 years, however, Fiat has built upon its strengths in other markets, making it, for example, the largest carmaker by volume in Brazil.
Last year the company introduced the Fiat 500, a two-door hatchback designed to compete with BMW's Mini. An instant hit, the 500 won the 2008 European car of the year award, and U.S. fans have been salivating at the thought of driving one.
"It's adorable," Lindland said.
Sergio Marchionne, chief executive of Fiat, has said he hopes to sell the 500 in the U.S. and had been looking for partnerships that would give his company a distribution infrastructure without having to build one from the ground up.
The Associated Press contributed to this report.
Fiat Returns to the American Market? Would seem pretty strange seeing as how Fiat never got back into the American market because they couldnt comply with our emissions regulations...
