Fiat S.p.A.(Fiat), an acronym for Fabrica Italiana Automobili Torino, is an Italian automobile manufacturer, financial and industrial group based in Turin, Italy. Founded in 1899, Fiat based cars are constructed around the world in Brazil, Argentina, and Poland. Fiat currently owned the Fiat, Alfa Romeo, Maserati, and Ferrari brands. The auto shown above is 2009 Ferrari California!
Fiat and Chrysler LLC announced that they were going to form a global alliance. Under the terms of the agreement, Fiat would take a 20% stake in Chrysler and gain access to its North American dealer network. Chrysler in exchange will get the platforms to build smaller, more fuel-efficient vehicles in the US and reciprocal access to Fiat's global distribution network.
Fiat would have the option of increasing that to as much as 55%, when the government loans are repaid. Fiat would not put cash into Chrysler, but will pay for the cost of retooling a Chrysler plant to produce one or more Fiat models, which will be sold in the us. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars.
The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink of collapse since taking over in 2004. The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota, Volkswagen and the alliance of Renault S.A. and Nissan.
Fiat and Chrysler LLC announced that they were going to form a global alliance. Under the terms of the agreement, Fiat would take a 20% stake in Chrysler and gain access to its North American dealer network. Chrysler in exchange will get the platforms to build smaller, more fuel-efficient vehicles in the US and reciprocal access to Fiat's global distribution network.
Fiat would have the option of increasing that to as much as 55%, when the government loans are repaid. Fiat would not put cash into Chrysler, but will pay for the cost of retooling a Chrysler plant to produce one or more Fiat models, which will be sold in the us. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars.
The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink of collapse since taking over in 2004. The partnership would provide each company with economies of scale and geographical reach at a time when both are struggling to compete with larger and more global rivals like Toyota, Volkswagen and the alliance of Renault S.A. and Nissan.
The auto shown below is a 2008 Fiat 500, which won the 2008 European Car of the Year Award. This car will probably be one of the vehicles manufactured in the U.S.
In every difficult financial time, there are tremendous opportunities to profit! Since this is such a severe downturn, the opportunities are magnified. Car companies that would have sold for substantial amounts of money are being sold a fraction of the previous value.
The Chrysler acquisition is only part of Sergio Machionne's plan. Fiat is attempting to buy General Motors (GM) European operations. Those operations include GM's German Opel division, British Vauxhall and Swedish carmaker Saab.
It is anticipated that Fiat would have to spin off the current auto business into a core of a new company, then add the new additions Chrysler and GM Europe. It will take a substantial amount of capital to realize Machionne's plan. Another suitor Magna International, Inc. of Canada has submitted a plan for the purchase of GM's Opel unit.
Shown below is a Alfa Romeo 159!
My take on this is that with every severe financial downturn opportunities like this come up. The corporations that have the cash and the financial backing to pull this off will succeed. Fiat would go from bring a side-line player to a major player on the world automotive stage.
Information via Wikipedia!
Hello Pete,
ReplyDeleteI remember Fiat to be like Italian people's daily shoes. I could change my presumption by your post. It is becoming more stylish and more sporty oriented as your sharing.
Thank you for your post.
Shaw Funami
Fill the Missing Link
Hi Shaw,
ReplyDeleteYour correct...most of of the Fiat models are basic transportation. So, they are not very exciting vehicles. Some of the Alfa Romeo models are more fun to drive! Then you have the really fun cars of Ferrari and Maserati!
Fiat is going to get a fantastic deal with Chrysler...especially with the bankrupcy! Chrysler will emerge with less debt, less plants, less employees...a much stronger company. Fiat get the electric technology that Chrysler has been working on....Chrysler will get diesel technology.
The big deal is what Fiat can put together! They maybe one of the largest auto companies after this is said and done!
Thanks for commenting!
Pete Baca
The Car Enthusiast Online
Hi Pete .. yes the Fiat 500s abound here .. well some!!
ReplyDeleteThe ramifications are interesting .. and as you say Fiat suddenly will become one of the big three I think ..
All the best
Hilary Melton-Butcher
Positive Letters
Hi Hilary,
ReplyDeleteYes, the auto landscape is changing substantially! It is possible that Fiat will be one of the major players....it depends on which companies they are able to purchase.
So far, with Chrysler they will have paid pennies on the dollar. Mercedes and Cerberus Capital will have lost multi billions with their ownership.
Thanks for commenting!
Pete Baca
The Car Enthusiast Online