In Russia Ghosn beats Marchionne 31 to 1. Nasdrovie Tovarish!

Russia
While in Italy manufacturers, importers and dealers are losing dozens of employees and millions of euro every day – and Fiat develops his worst results in the last 30 years – in Russia the Carmakers seems to play war games.

The Russian market is a great opportunity for manufacturers and dealers: last year, 2,652,000 cars were sold with a growth of 39.1% over 2010. As reported by Focus 2 move, the first quarter of 2012 ended with another growth of 22.7%, despite statements of analysts praising the CIVETS and giving BRICS markets for finished!

But while Chevrolet, Hyundai, Renault, VW and Ford were convinced to have conquered the Russian highways, Marchionne launched his attack on many battlefronts: CNH tractors, Jeep-Chrysler SUVs, Fiat cars and commercial vehicles, Iveco trucks and even ZIL representative sedans!

The troops of CNH-tractors have recaptured the plant in Naberezhnye Chelny, where it is located the CNH-Kamaz. The objective is to strengthen a strategic alliance, aimed to the huge investments planned by the Kremlin in agriculture! In reality the interests of Marchionne are also others: the Fiat’s Chief looks closely at the Russian car market where, the company run by him it is in great difficulties. Even questionable vehicles as UAZ and GAZ has sold more than Fiat (only 28.000 vehicles). Certainly not a success: in Italy there are private dealers who sell more!

Mr. Marchionne after the meeting with Vladimir Putin reiterated that “the Russian market is strategic for Fiat-Chrysler“. So, thanks to a joint venture with Sberbank, which will own 20% of the shares, in two plants located in Moscow and St. Petersburg will be produced Fiat-Chrysler vehicles. The Russian bank Sberbank – which should fully fund this project – only a couple of years ago has been a bitter enemy of Fiat, when they developed a partnership with Magna to acquire Opel from the bankrupted GM.

Turncoats? No, business is business!

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So, after they contributed to the mass motorization of the former Soviet Union in the seventies, 42 years after the successful launch of the Fiat-Lada Zhigulì (as it was called the Fiat 124 produced in Togliattigrad), the new Fiat-Chrysler Group comes back to Russia as a leading actor.

Recent rumors are confirmed by Rossiskaia Gazeta and by Andrei Sharonov, deputy mayor of Moscow: Fiat will provide its technology for the recovery and productive use of the legendary ZIL plant in Moscow – the Russian nomenklatura cars – now partially abandoned after losses of billions of euros.

Will the competitors sit on the fence and wait? NO!

The former ally of Fiat (Lada) – now associated with Renault-Nissan and with a stunning  testimonial as Vladimir Putin– sell to Russians motorists nearly 900,000 cars per year, vs 28,000 of Fiat (31 times more!). Beside this, Renault-Nissan – which owns 25% of AvtoVAZ – is negotiating to move to 50%, which would allow the French-Jap Group to control the largest manufacturer of the Russian market, becoming the third manufacturer in the world after Toyota and the… revived GM.

But Marchionne has an ace up its sleeve that the opponents have underestimated: the return to autarky patriotic cars just announced by the new Russian president. Bye-Bye german luxury cars, SUVs and sedans! From now on, Russian officials will be able to use only cars manufactured and assembled in the Russian homeland.

And the ZIL new projects seem really glittering and monumental (or not?).

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Putin’s goal is not so much to support the domestic auto industry (as Obama did a couple of years ago) – which is in excellent health (thanks to agreements with partners like Carlos Ghosn, and thanks to modern plants already planted over the years by Mercedes, VW, Kia, Toyota, Nissan, GM, Ford and Hyundai) – but also to cut the exorbitant costs for the “ministerial-cars” estimated to be in about 3.5 billion dollars.

But instead of celebrating for the ambitious projects of Marchionne that would like to  reintroduce the grandeur of the days of Togliattigrad in the seventies, the Italian politicians said they were concerned about this ‘look to the east’ of Fiat. Again outside Italy!

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Yes, only a couple of weeks ago the legendary Turin-Mirafiori plant has been closed (for the next 18 months), and a new layoffs for another 5,300 People was launched: this definitely means that we just have to celebrate that Italy is becoming – in the deafening silence of media – the no man’s land in the battle of the automobile!

Nasdrovie Tovarish!

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2 Comments

  1. Giovanni Bravin says:

    Mr. Sergio Marchionne, as Managing Director and CFO in Fiat, “COULD BE” good in financial matters but HE IS NOT a carmaker! The Fiat’s sales results on the Russian market are the last exam that Fiat failed. I remember that Alfa Romeo, formerly property of Italian Government, had a joint venture with the Japanese Nissan and they produced ARNA car, in Alfa Romeo factory. It was a failure. The Italian Government said that it was impossible for them to co-operate with the Japanese! Renault, Regié Framcaise (French counterpart of the Italian state owned factories) sent a Mr. Ghosn for a couple of years to fix and adjust the Nissan’s reports. Once these have started to pay dividends to itys shareholders, Renault bought Nissan, and now Nissan is part of Renault Group.

  2. Krishan Kapoor says:

    An interesting article.

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