Fiat Chrysler, an expected marriage!


photo credit: Bildbunt

Everybody is talking about Fiat and Chrysler agreement but none guessed that despite of evident Fiat needs to acquaintain with a partner. In terms of facts the Brazilian Operations were positive whilst European car productions were extremely negative because of volumes being not large enough especially across the medium-size vehicles. However Chrysler needed exactly the opposite way due to the lack of small and efficient cars especially shown during summer 2008 when oil price rose over 100$ and sales went down within its core business.

Those critical above issues are not new at all but they can definetely be considered as structural for both companies. Fiat always had problems with medium engine size, quite dramatic if you think of large ones like 6-cylinder engine, while Chrysler was always in trouble with C market segment.
Therefore those two companies were clearly complementing each other despite of the previous joint venture between Chrysler and Daimler being the German car maker afraid of the erosion of its market by Chrysler products.

Thus the Fiat and Chrysler agreement can not be a surprise but we have to also recognize that Fiat CEO has been exceptional in implementing his negotiating skills and vision of what should be done later (climbing across the Chrysler organization).

So why do not do the agreement earlier? Maybe because before Chrysler’s chapter 11, Cerberus fund was the owner and they tried to sell it but nobody wanted it because the company was too large, inefficient, had over-production and was crashed by debts such as GM (Il Chapter 11 di Chrysler ).
It appears that Fiat could not do anything earlier, but it is not quite true. Instead of buying the company Fiat could do a technical agreement for a common engine like Pentastar (I wrote about this months ago in the following article: V6 comune, un’occasione persa già nel 2007 ) and also for a dual-clutch (Chrysler committed a dual-clutch gearbox to Getrag) or the 4-cylinder G.E.M.A.

They could also have the opportunity to engineer a saloon together like Chrysler 300C and perhaps today from the same platform we could have a real rear-wheel drive Alfa instead of a 300C copy with Lancia brand.

(Translated by Matteo Ceronetti)

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