FIAT near stake in Chrysler.

[Dino Scuderia]

In an attempt to revive two of the world's storied auto makers, Italy's Fiat SpA and Chrysler LLC are poised to announce a partnership as soon as today in which Fiat could take control of the U.S. company's operations, people familiar with the matter said.

Under terms of a pact that is being hammered out, Fiat is likely to take a 35% stake in Chrysler by the middle of this year. It would have the option of increasing that to as much as 55%, these people said.

Fiat, the stronger of the two, wouldn't immediately put cash into Chrysler. Instead it would obtain its stake mainly in exchange for covering the cost of retooling a Chrysler plant to produce one or more Fiat models to be sold in the U.S., these people said. Fiat would also provide engine and transmission technology to help Chrysler introduce new, fuel-efficient small cars, they said.
[Chart]

The deal is the latest maneuver by Fiat's chief, Sergio Marchionne, who has pulled the Italian company back from the brink 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 Motor Corp., Volkswagen AG and the alliance of Renault SA and Nissan Motor Co.

Chrysler last year sold two million cars and trucks world-wide, with almost all of its sales in North America. Fiat sold 2.5 million vehicles and is heavily dependent on Europe -- particularly its home market in Italy.

While Fiat has a wider global reach than Chrysler, the two auto makers are smaller players compared to their global rivals. Toyota and General Motors, for instance, each have sold more than nine million vehicles annually.

Chrysler spokeswoman Lori McTavish said, "In today's economic environment, talks are going on between companies in all industries -- ours is no different."

Fiat Vice Chairman John Elkann on Tuesday confirmed the talks with Chrysler. "It's not a mystery that we are talking to Chrysler," he said, without adding further details.

The pact with Fiat could give Chrysler a stronger case as it seeks more loans from the U.S. government. Chrysler nearly ran out of money late last year, before the Treasury Department provided $4 billion in emergency loans, and has suffered a steep drop in sales in the past three months. The auto maker needs to show it can remain a viable business by March to keep those loans and to qualify for the $3 billion in additional government aid it says it needs.

Last week, a vocal critic of Chrysler, Sen. Bob Corker (R., Tenn.) said the company needs to "merge or go away." A Chrysler official declined to comment on Sen. Corker's remark.

Kimberly Rodriquez, an automotive consultant at Detroit-based advisory firm Grant Thornton, said Chrysler has little choice but to find an alliance. "Without further funding, they don't survive with the level of sales and cash they have right now," she said in a telephone interview.

Working with Fiat could complicate a separate partnership Chrysler arranged last year with Nissan. Chrysler is supposed to start making pickup trucks in a few years that Nissan would sell in the U.S., and Nissan has agreed to make compact cars for Chrysler -- vehicles that potentially could compete with any small cars Fiat provides to Chrysler.

Chrysler and Nissan have discussed joining in a broader alliance, and top executives of the two companies spoke as recently as last week, a person familiar with the matter said. But Carlos Ghosn, chief executive of Nissan and Renault, is wary of any deal that would require Nissan to put money into Chrysler, a person familiar with Mr. Ghosn's thinking said.

A Nissan spokesman said the company intends to maintain its supply relationship with Chrysler "in the same spirit we do with the many other automakers we have similar arrangements with."
More

* Fiat CEO Builds Record Of Bold Strategic Moves

The tentative terms Fiat and Chrysler have worked out would call for Chrysler's owners, Cerberus Capital Management LP and Daimler AG, to retain stakes in the U.S. car maker, people familiar with the discussions said. Cerberus will see its 80.1% stake diluted. It is unclear whether Daimler will want to keep its entire 19.9% stake.

A Daimler spokesman said he couldn't immediately comment on the matter.

News of the partnership was previously reported by Automotive News, a trade publication.

The potential alliance will need the blessing of Fiat's founding family, the Agnellis. The family, which holds a 30% controlling stake in Fiat, has said in the past that to stay competitive, Fiat needed to link up with a larger rival.

Fiat's board is likely to discuss the potential deal with Chrysler when it meets Thursday to approve third-quarter results, one person familiar with the matter said.

The Fiat deal would effectively end an attempt by Cerberus to resurrect the troubled U.S. auto maker that began in 2007. Chrysler merged with Daimler in 1998 to form DaimlerChrysler AG, but the marriage ended in part amid concerns that the U.S. arm was a drag on earnings.

Cerberus snapped up Chrysler with the promise it could speed product development and other decisions thanks to its status as a private company. To come up with cash to fund its ambitions, Cerberus had Chrysler mortgage almost all of its plants and other assets to raise $12 billion in loans from a group of banks led by J.P. Morgan, Goldman Sachs and Citigroup.
[Chrysler] Associated Press

In this Jan. 6, 2008 file photo, the Chrysler company logo shines off of a minivan in Aurora, Colo.

Then, in the spring of 2008, gasoline prices soared to $4 a gallon and sales of Chrysler's most profitable trucks and SUVs plunged.

Scrambling to save cash, Chrysler slowed development of new vehicles. At the North American International Auto Show, which opened last week in Detroit, Chrysler didn't show a single vehicle that will be launched in 2009.

Chrysler's troubles worsened last fall when the meltdown on Wall Street hit. In the second half of 2008, the company used up $10 billion in cash, forcing it to seek help from the U.S. government. As part of the deal with Fiat, Chrysler is supposed to restructure the $9 billion in debt it still has on its books, people familiar with the matter said.

While the private-equity firm and its investors likely will lose billions on the Chrysler deal, Cerberus would possibly face an even bigger hit if forced to put Chrysler in Chapter 11 bankruptcy protection or continue running the auto maker amid the deep slump in the U.S. auto industry.

It is Cerberus's latest investment to be crushed by the auto-industry slowdown. In 2006, Cerberus paid billions for a controlling stake in GMAC LLC, the finance arm for GM. But Cerberus eventually had to agree to unload much of its stake in order to receive a bailout for the troubled lender late last year.

Fiat is also facing challenges. Analysts have long doubted whether it has the scale to survive as an independent manufacturer of small cars. Small vehicles have relatively thin profit margins.

Fiat has for months been exploring ways to gain a foothold in North America, hunting for a partner that could manufacture its Fiat 500 mini model and re-launch its high-end Alfa Romeo brand in the U.S.

Most analysts say Chrysler has little hope of surviving as a standalone company. Amid a rash of mergers in recent decades, and the rise of well-funded newcomers in China and India, the auto industry is dominated by multinational players that can quickly move production and engineering from region to region.
—Jeff Bennett, Jeff McCracken, Alessandro Mocenni and Giada Zampano contributed to this article.

WSJ

[Ferrer]

I don't think it's a good idea or Fiat but...

[IBrake4Rainbows]

If this goes ahead it will bankrupt both companies.

Guaranteed.

[Rockefella]

Call me crazy but I think something as outlandish as this might actually work.

[henk4]

an expensive way to get a proper distribution network for Alfa Romeo or Lancia, but yes, it might work...for Fiat.

[Dino Scuderia]

Come to see our all new Match Made in Hell at your local Ferrari-Jeep dealer.:eek:

[<AAA-MOD>]

official Press release from Chrysler's media blog:

Fiat Group, Chrysler and Cerberus Announce Plans for a Global Strategic Alliance



Posted Jan 20, 2009, 06:06 AM by Editor
Category: Global Growth


Fiat S.p.A., Chrysler LLC (Chrysler) and Cerberus Capital Management L.P., the private investment majority owner of Chrysler LLC, announced today they have signed a non-binding term sheet to establish a global strategic alliance.

The alliance, to be a key element of Chrysler’s viability plan, would provide Chrysler with access to competitive, fuel-efficient vehicle platforms, powertrain, and components to be produced at Chrysler manufacturing sites. Fiat would also provide distribution capabilities in key growth markets, as well as substantial cost savings opportunities. In addition, Fiat would provide management services supporting Chrysler’s submission of a viability plan to the U.S. Treasury as required. Fiat has been very successful in executing its own restructuring over the past several years. The alliance would also allow Fiat Group and Chrysler to take advantage of each other's distribution networks and to optimize fully their respective manufacturing footprint and global supplier base.

The proposed alliance would be consistent with the terms and conditions of the U.S. Treasury financing to Chrysler. Per the U.S. Treasury loan agreement, each constituent will be asked to contribute to Chrysler’s restructuring effort including: lenders, employees, the UAW, dealers, suppliers and Chrysler Financial. Such steps would greatly contribute to Chrysler’s long term viability plan. Completion of the alliance is subject to due diligence and regulatory approvals, including the U.S. Treasury.

As a consideration for Fiat Group’s contribution to the alliance of strategic assets, to include: product and platform sharing, including city and compact segment vehicles, to expand Chrysler’s current product portfolio; technology sharing, including fuel efficient and environmentally friendly powertrain technologies; and access to additional markets, including distribution for Chrysler vehicles in markets outside of North America, Fiat would receive an initial 35 percent equity interest in Chrysler. The alliance does not contemplate that Fiat would make a cash investment in Chrysler or commit to funding Chrysler in the future.

“This initiative represents a key milestone in the rapidly changing landscape of the automotive sector and confirms Fiat and Chrysler commitment and determination to continue to play a significant role in this global process. The agreement will offer both companies opportunities to gain access to most relevant automotive markets with innovative and environmentally friendly product offering, a field in which Fiat is a recognized world leader while benefitting from additional cost synergies. The deal follows a number of targeted alliances and partnerships signed by the Fiat Group with leading carmakers and automotive suppliers over the last five years aimed at supporting the growth and volume aspirations of the partners involved,” the CEO of Fiat Group, Sergio Marchionne said.

"A Chrysler/Fiat partnership is a great fit as it creates the potential for a powerful, new global competitor, offering Chrysler a number of strategic benefits, including access to products that compliment our current portfolio; a distribution network outside North America; and cost savings in design, engineering, manufacturing, purchasing and sales and marketing," said Bob Nardelli, Chairman and CEO of Chrysler LLC. "This transaction will enable Chrysler to offer a broader competitive line-up of vehicles for our dealers and customers that meet emissions and fuel efficiency standards, while adhering to conditions of the Government Loan. The partnership would also provide a return on investment for the American taxpayer by securing the long-term viability of Chrysler brands in the marketplace, sustaining future product and technology development for our country and building renewed consumer confidence, while preserving American jobs."

"This is great news for the UAW Chrysler team and we look forward to supporting and working with them to ensure Chrysler's long term viability,” said Ron Gettelfinger, President United Auto Workers (UAW).

“We're on board with this important strategic initiative as it will help preserve the long-term viability of our great company, its brands and of course UAW-Chrysler jobs,” said General Holiefield, Vice President, United Auto Workers (UAW).

[LeonOfTheDead]

as long as Fiat is not spending a single dollar on the operation, I think it's fine and that it could work, especially for Fiat.
more likely it could absorb completely Chrysler in the long term, melting Chrysler and Dodge into the America's Fiat version.
how is the Chrysler product quality?
I would be worried about the quality of those cute Alfas assembled in the US.

[cmcpokey]

hooray alfas and fiats coming to america. next car=alfa gt, or abarth grande punto

[nota]

come to see our all new match made in hell at your local ferrari-jeep dealer.:eek:
^^ just superb :D

[henk4]

^^ just superb :D
I think Ferraris everywhere in the world are never sold through Fiat outlets. My wife's Stilo needs service in a couple of weeks and I'll ask whether I can trade it in for an F430.

[digitalcraft]

Woah. Its like the KKK funding a black church. Ok, maybe not that drastic, but woah.

[henk4]

Woah. Its like the KKK funding a black church. Ok, maybe not that drastic, but woah.
When GM called the shots at Fiat, it all went wrong...
When Fiat is calling the shots at Chrysler, it may go right....
and btw I don't like your analogy.

[NSXType-R]

Why would they want to do that?

[Dino Scuderia]

Why would they want to do that?

"Fiat has for months been exploring ways to gain a foothold in North America, hunting for a partner that could manufacture its Fiat 500 mini model and re-launch its high-end Alfa Romeo brand in the U.S."

[NSXType-R]

"Fiat has for months been exploring ways to gain a foothold in North America, hunting for a partner that could manufacture its Fiat 500 mini model and re-launch its high-end Alfa Romeo brand in the U.S."

Makes a little more sense there, but if they screw up, both of them will go under, and very quickly too.

[Timothy (in VA)]

I definitely like this idea more than Chrysler merging with GM, which was the talk a few months ago.

[Ferrer]

how is the Chrysler product quality?
There isn't any.

hooray alfas and fiats coming to america. next car=alfa gt, or abarth grande punto
You won't be seeing the GT. Most probably you'll get the 159-family of cars, arguably the worse Alfas in decades.

I think Ferraris everywhere in the world are never sold through Fiat outlets. My wife's Stilo needs service in a couple of weeks and I'll ask whether I can trade it in for an F430.
Just make sure to take a picture of the salesman when you do. :)

[Pando]

melting Chrysler and Dodge into the America's Fiat version.SRT-10 Panda?

[culver]

When GM called the shots at Fiat, it all went wrong...
When Fiat is calling the shots at Chrysler, it may go right....


Possibly. The question is can Fiat and Chrysler get back much of the talent that MB's terrible leadership chased away. I'm not sure what all Chrysler has anymore. The partnership has some logical justification. It gives each better access into their respective markets. Chrysler does have some large car expertise (assuming the experts haven't left already). Chrysler also has the truck and SUV experience which is still valuable in the NA market. Finally, the Jeep brand.

Fiat has the small car expertise and volume which could allow the partners to produce a decent small car for the US market that could also sell overseas. Historically it's hard for the domestics to compete in small cars because the UAW has made it hard to import the cars from markets where small cars have historically not been for those who are too cheap to spend much. At the same time the high cost of UAW labor made it hard to profit while selling small cars due to the relatively small profit margins.

The assembly quality in the US is dependent on the company. Honda and Toyota have done a good job with US assembly. Ford has also shown that it can be done well. There is nothing inherently magic about quality assembly, it just takes hard work and smart vehicle and assembly design work and a system that reacts to remove problems when they are discovered.

Overall I'm not sure this will work but I figure Chrysler was so badly depleted by MB that really they have little left. Unlike Ford they don't have a recent record of good quality and unlike GM and Ford they don't have much in the way of exciting or promising product. Of the cars the 300 platform is the only one that seems worth much and it's a lot of MB recycling (it however is not simply an old E class chassis). They better hope they have something good in the pipes.

[Kitdy]

They better hope they have something good in the pipes.


SRT-10 Panda?

SRT-10 Panda. 'Nuff said.

[wwgkd]

SRT-10 Panda. 'Nuff said.

Kind of what I was thinking. That or see if they put a hemi in a 500 (since chrysler tries to put a hemi into everything else.) I'd buy it.

[Kitdy]

500 R/T maybe?

[LeonOfTheDead]

Fiat has the small car expertise and volume which could allow the partners to produce a decent small car for the US market that could also sell overseas. Historically it's hard for the domestics to compete in small cars because the UAW has made it hard to import the cars from markets where small cars have historically not been for those who are too cheap to spend much. At the same time the high cost of UAW labor made it hard to profit while selling small cars due to the relatively small profit margins.

small cars generates small profits even here, and even here the equivalent of
UAW are expensive too, and considering about all the small cars from Fiat are pretty recent (apart from the Ypsilon, which is going to be replaced in a year or so), I suppose they would just rebadge/rebody one of those, and it could work too (perhaps using cars like the Bravo/Delta and so on, not the smaller ones.


They better hope they have something good in the pipes.

see above

[MRR]

I would be worried about the quality of those cute Alfas assembled in the US.

IF they ended up making any cars in the US it would probably be for cars that are primarily sold to Americans (like BMW with the X5 which are assembled in South Carolina for instance).

Since there was no cash involved I don't see how Fiat loses and for us I would like to start seeing Alfas and Lancias in the US again.

[culver]

IF they ended up making any cars in the US it would probably be for cars that are primarily sold to Americans (like BMW with the X5 which are assembled in South Carolina for instance).

Since there was no cash involved I don't see how Fiat loses and for us I would like to start seeing Alfas and Lancias in the US again.

No issue with US manufacturing. Honda and Toyota have high quality US plants. Ford and GM also have US plants doing high quality work.

[clutch-monkey]

wait, so fiat only wants to use chrysler's dealer lots or something? or do they want chrysler to build their cars? that would be disaster.

[Ferrer]

wait, so fiat only wants to use chrysler's dealer lots or something? or do they want chrysler to build their cars? that would be disaster.
It's probably both.

I'd say thought that Chrysler's main problem isn't build quality, but design quality.

[wwgkd]

It's probably both.

I'd say thought that Chrysler's main problem isn't build quality, but design quality.

Yeah. They've come up with some good, well made stuff, then they turn out a bunch of crap designs. It's pretty annoying actually.

[clutch-monkey]

chrysler can build stuff that stays together long enough to leave the dealership? news to me :eek:

[wwgkd]

chrysler can build stuff that stays together long enough to leave the dealership? news to me :eek:

Don't know about what they sell down there, but they've been offering 100,000 mile and lifetime warranties longer than toyota or honda up here.

[Dino Scuderia]

Don't know about what they sell down there, but they've been offering 100,000 mile and lifetime warranties longer than toyota or honda up here.

If FIAT is smart they'll offer 100,000 mile/10 year warranties like Hyundai has done to get a foothold in the US.

[clutch-monkey]

Don't know about what they sell down there.
since they stopped making cars locally...shit. neons, jeeps, crossfires, avengers (?), etc etc, all trash. never touching a chrysler product again.

that warranty is non-transferrable though yeah?

[wwgkd]

since they stopped making cars locally...shit. neons, jeeps, crossfires, avengers (?), etc etc, all trash. never touching a chrysler product again.

that warranty is non-transferrable though yeah?

My Jeep is awesome :p (course, it's a real one, not those cherokees, etc. that most people think of as jeeps.)

It transfers. My dad bought a 2000 Dodge Ram in 2001 with a 7 year 100,000 mile warranty and it still applied. Right after he got his they switched to 10 year 100,000, and then lifetime. Lifetime would have been nice, but nothing's broken (despite heavy abuse and a couple of accidents) so I guess it doesn't matter much yet.

[clutch-monkey]

yeah the I6 jeeps were alright providing the rest didn't shit itself a la lucas electrics style..
maybe chrysler felt they could promise that warranty because they won't be around to honour it :D

[wwgkd]

yeah the I6 jeeps were alright providing the rest didn't shit itself a la lucas electrics style..
maybe chrysler felt they could promise that warranty because they won't be around to honour it :D

haha, that's one way to look at it.

[LeonOfTheDead]

IF they ended up making any cars in the US it would probably be for cars that are primarily sold to Americans (like BMW with the X5 which are assembled in South Carolina for instance).

Since there was no cash involved I don't see how Fiat loses and for us I would like to start seeing Alfas and Lancias in the US again.

I think those very X5 are sold even here and so for the Z4 (at least their previous gens)


No issue with US manufacturing. Honda and Toyota have high quality US plants. Ford and GM also have US plants doing high quality work.

why you are not quoting Chrysler's quality?
that was the point of my posts, what I would like to know if the assembly ability of Chrysler's plants is good or not.

I guess the main design and so on would stick in Italy btw.

[culver]

why you are not quoting Chrysler's quality?
that was the point of my posts, what I would like to know if the assembly ability of Chrysler's plants is good or not.

I guess the main design and so on would stick in Italy btw.

I took your comment to mean cars made in the US in general. As for Chrysler assembly, I can't say with certainty. The PT Cruisers are supposed to be well assembled. The are reported to have some issued with their automatic transmissions but not the manual boxes. That would suggest the vehicle is well assembled but one of the components isn't up to par. The supplier of the transmission or the engineers who spec'ed the transmission would be to blame, not those who are in charge or actually performing the assembly of the car.
However, I don't know if that is true for all Chrysler plants. I generally don't follow Chrysler and haven't since the Germans further screwed up the company. I don't know if the problems with Chrysler vehicles are due to assembly mistakes/failures or if they are due to poorly selected, designed or assembled components.
Now if all Chrysler plants are like the PT's plant then Fiat could be OK. In that case, so long as the components brought to the plant are good, the total car would be good. A 500 built in the PT's plant would probably be fine. It's also possible that Fiat's design is inherently better from an assembly point of view thus making it easier to ensure that even careless assembly results in a correctly assembled vehicle.
Incidentally, I wonder if Fiat could use the 500 name in the US. Ford recently had a car named the 500. They may still own the US trade mark for the name.

[henk4]

Wasn't the first generation of M-Class Benzes made in the USA and subsequently a continuous source of trouble?

[Ferrer]

Now if all Chrysler plants are like the PT's plant then Fiat could be OK. In that case, so long as the components brought to the plant are good, the total car would be good. A 500 built in the PT's plant would probably be fine. It's also possible that Fiat's design is inherently better from an assembly point of view thus making it easier to ensure that even careless assembly results in a correctly assembled vehicle.
Incidentally, I wonder if Fiat could use the 500 name in the US. Ford recently had a car named the 500. They may still own the US trade mark for the name.
But it was called Five Hundred, not 500. That wouldn't pose a problem, would it?

[LeonOfTheDead]

I took your comment to mean cars made in the US in general. As for Chrysler assembly, I can't say with certainty. The PT Cruisers are supposed to be well assembled. The are reported to have some issued with their automatic transmissions but not the manual boxes. That would suggest the vehicle is well assembled but one of the components isn't up to par. The supplier of the transmission or the engineers who spec'ed the transmission would be to blame, not those who are in charge or actually performing the assembly of the car.
However, I don't know if that is true for all Chrysler plants. I generally don't follow Chrysler and haven't since the Germans further screwed up the company. I don't know if the problems with Chrysler vehicles are due to assembly mistakes/failures or if they are due to poorly selected, designed or assembled components.
Now if all Chrysler plants are like the PT's plant then Fiat could be OK. In that case, so long as the components brought to the plant are good, the total car would be good. A 500 built in the PT's plant would probably be fine. It's also possible that Fiat's design is inherently better from an assembly point of view thus making it easier to ensure that even careless assembly results in a correctly assembled vehicle.
Incidentally, I wonder if Fiat could use the 500 name in the US. Ford recently had a car named the 500. They may still own the US trade mark for the name.

considering Italians and their will to work, I guess a careless assembly has been taken into count by Fiat when designing their cars.:rolleyes:

[culver]

But it was called Five Hundred, not 500. That wouldn't pose a problem, would it?

Good question.

[Kitdy]

culver is our resident Big Three apologetic.

[BarneyBoy]

I've not experienced the latest FIATs, but the others I've known have all seemed pretty Dodgey... now they really WILL be. :D

[clutch-monkey]

I've not experienced the latest FIATs, but the others I've known have all seemed pretty Dodgey... now they really WILL be. :D
hahaha. harsh :D

[culver]

culver is our resident Big Three apologetic.

Please explain?

Ford does have a recent model named Five Hundred. That very well could be a problem if Fiat wants to sell a car named "500".

How does pointing that out make me an apologist?

[Kitdy]

Please explain?

No no, it wasn't this thing in specific it was your posting in general. You often to go to bat for the Big Three when people talk smack about them. This I think is good and adds to the discussion - it was not meant as an insult.

[LeonOfTheDead]

Please explain?

Ford does have a recent model named Five Hundred. That very well could be a problem if Fiat wants to sell a car named "500".

How does pointing that out make me an apologist?

if Ford complains about the name, Fiat could sabotage the Ka assembly line...just kidding;)

[f6fhellcat13]

Couldn't FIAT say the name is spelled "500" but is pronounced "cinquecento"?
Would that hold up in court?

[culver]

No no, it wasn't this thing in specific it was your posting in general. You often to go to bat for the Big Three when people talk smack about them. This I think is good and adds to the discussion - it was not meant as an insult.

OK, my apologies.

(damn I'm being an apologist again :D )

[Kitdy]

OK, my apologies.

(damn I'm being an apologist again :D )

No need to apologise, but I digged the pun.

[MRR]

I think those very X5 are sold even here and so for the Z4 (at least their previous gens)

I didn't say they weren't but 60%+ stay in the US and the rest are exported

[Timothy (in VA)]

I took your comment to mean cars made in the US in general. As for Chrysler assembly, I can't say with certainty. The PT Cruisers are supposed to be well assembled. The are reported to have some issued with their automatic transmissions but not the manual boxes. That would suggest the vehicle is well assembled but one of the components isn't up to par. The supplier of the transmission or the engineers who spec'ed the transmission would be to blame, not those who are in charge or actually performing the assembly of the car.
However, I don't know if that is true for all Chrysler plants. I generally don't follow Chrysler and haven't since the Germans further screwed up the company. I don't know if the problems with Chrysler vehicles are due to assembly mistakes/failures or if they are due to poorly selected, designed or assembled components.
Now if all Chrysler plants are like the PT's plant then Fiat could be OK. In that case, so long as the components brought to the plant are good, the total car would be good. A 500 built in the PT's plant would probably be fine. It's also possible that Fiat's design is inherently better from an assembly point of view thus making it easier to ensure that even careless assembly results in a correctly assembled vehicle.


The Chrysler PT Cruiser is built in Mexico. ;)

[Ferrer]

Couldn't FIAT say the name is spelled "500" but is pronounced "cinquecento"?
Would that hold up in court?
a) the name is different (as I pointed out) and b) there's also the fact there have been some cases of cars sold with the same name on the same market, like the Volvo 850 and the BMW 850i or the Lexus LS and the Lincoln LS.

[culver]

a) the name is different (as I pointed out) and b) there's also the fact there have been some cases of cars sold with the same name on the same market, like the Volvo 850 and the BMW 850i or the Lexus LS and the Lincoln LS.
Ford was going to name the LS something like the LS6 and LS8 but didn't because Lexus had the LS400. Note that Lexus doesn't have a car named "LS".

[culver]

The Chrysler PT Cruiser is built in Mexico. ;)

Well it's still a Chrysler plant and Fiat would have access to it ;)

[Ferrer]

Ford was going to name the LS something like the LS6 and LS8 but didn't because Lexus had the LS400. Note that Lexus doesn't have a car named "LS".
Well, then Fiat doesn't have a car named "Five Hundred" either. ;)

[culver]

Well, then Fiat doesn't have a car named "Five Hundred" either. ;)

That is true but might be an issue if Ford went ahead and registered the "500" TM as well as "Five Hundred".

[Timothy (in VA)]

Well it's still a Chrysler plant and Fiat would have access to it ;)

You're like, psychic, or something. When the PT Cruiser production ends, they're now planning on building the 500 there: Fiat-Chrysler partnership will bring 7 new models to U.S. - Autoblog (http://www.autoblog.com/2009/01/26/fiat-chrysler-partnership-will-bring-7-new-models-to-u-s/#continued)

Other products anticipated to come to America as a result of the partnership: a Fiat Panda-based 5-door badged as a Chrysler or a Dodge, the next generation of the Fiat Grande Punto, and a few other models. The full details are in the link above.

[IBrake4Rainbows]

There is a tendancy in the US small/Mid sized car market towards sedans/saloons. something the Italians are perhaps not as well suited at as their hatchbacks.

my guess? the Linea will make an apperance also.

[Kitdy]

I dub the new union Fysler.

You heard it here first.

[Ferrer]

You're like, psychic, or something. When the PT Cruiser production ends, they're now planning on building the 500 there: Fiat-Chrysler partnership will bring 7 new models to U.S. - Autoblog (http://www.autoblog.com/2009/01/26/fiat-chrysler-partnership-will-bring-7-new-models-to-u-s/#continued)

Other products anticipated to come to America as a result of the partnership: a Fiat Panda-based 5-door badged as a Chrysler or a Dodge, the next generation of the Fiat Grande Punto, and a few other models. The full details are in the link above.
I'm not seeing this...

The 500 might work as a cheaper alternative to the Mini. But the MiTo is probably too expensive for America's Alfa Romeo image. The Dodge Panda is destined to fail, and perhaps the mid sized Fiat-based saloons wouldn't flop too badly.

But anyway, we'll see.

[Kitdy]

Seeing how North Americans receive these cars will be interesting. Sadly, I read on Autoblog that the 500 may not be destined for Canada due to stricter crash testing for the front headlights or something. Pity.

[LeonOfTheDead]

There is a tendancy in the US small/Mid sized car market towards sedans/saloons. something the Italians are perhaps not as well suited at as their hatchbacks.

my guess? the Linea will make an apperance also.

the Linea is too cheap to even cross the ocean.
it's not that we are not good at making those smaller sedans, we don't like them, so we design the car as a sedan, and ten turn it into a hatch.
the 156 and Lybra/Marea were the last ones. the Alfa was gorgeous and so sold well, the other were sunk by their wagon versions. See the new Croma available only as a wagon.

[wwgkd]

So if we're getting the 500 are we getting the essesse too, then? Or just the lesser versions?

[Ferrer]

the Linea is too cheap to even cross the ocean.
it's not that we are not good at making those smaller sedans, we don't like them, so we design the car as a sedan, and ten turn it into a hatch.
the 156 and Lybra/Marea were the last ones. the Alfa was gorgeous and so sold well, the other were sunk by their wagon versions. See the new Croma available only as a wagon.
The other way round, you mean. :)

And arguably those you mention aren't really small saloons.

[IBrake4Rainbows]

the Linea is too cheap to even cross the ocean.
it's not that we are not good at making those smaller sedans, we don't like them, so we design the car as a sedan, and ten turn it into a hatch.
the 156 and Lybra/Marea were the last ones. the Alfa was gorgeous and so sold well, the other were sunk by their wagon versions. See the new Croma available only as a wagon.

All I was alluding to is that the market for Small sedans is somewhat more buoyant in the US than in other parts of Europe. I know Spain is somewhat of an Anomaly with their purchasing habits......

Still, the next gen of Chrysiat models will likely be sedans for the US market.

[LeonOfTheDead]

The other way round, you mean. :)

And arguably those you mention aren't really small saloons.

in a way, I meant what I wrote, but you can be right too :)

besides those cars were as big (engineeringly) as a Jetta, and the only sedan smaller than those are some weird stuff as a Fabia sedan, the new Fiesta sedan and so on. I just consider those as a lady with a purse, not another kind of human being (weird analogy, I know).


All I was alluding to is that the market for Small sedans is somewhat more buoyant in the US than in other parts of Europe. I know Spain is somewhat of an Anomaly with their purchasing habits......

Still, the next gen of Chrysiat models will likely be sedans for the US market.

I agree on the market view. We buy sedan only as big as an Alfa 159 (BMW 3 Series) or similars, for the smaller just there isn't a real market, we go directly hatches.

[Kitdy]

Still, the next gen of Chrysiat models will likely be sedans for the US market.

I already taxed the merger name and it's Fysler not Chrysiat. Come on now.

[wwgkd]

I think I've got to go with Fysler.

[Ferrer]

in a way, I meant what I wrote, but you can be right too :)

besides those cars were as big (engineeringly) as a Jetta, and the only sedan smaller than those are some weird stuff as a Fabia sedan, the new Fiesta sedan and so on. I just consider those as a lady with a purse, not another kind of human being (weird analogy, I know).
Sizeway definitely. But the Alfa and the Lancia were in fact D-segment cars, despite being quite small.

And I like Fysler too.

[IBrake4Rainbows]

It seems as though that even with the Fiat Merger, Chrysler is looking to source small cars through Nissan......

Read me! (http://www.autoblog.com/2009/01/28/despite-fiat-deal-chrysler-will-still-get-small-cars-from-nissa/)

[Ferrer]

It seems as though that even with the Fiat Merger, Chrysler is looking to source small cars through Nissan......

Read me! (http://www.autoblog.com/2009/01/28/despite-fiat-deal-chrysler-will-still-get-small-cars-from-nissa/)
And that Fiat is still looking to merge with PSA and have a partnership with BMW.

Italian Leyland, anyone?

[f6fhellcat13]

And that Fiat is still looking to merge with PSA and have a partnership with BMW.

Italian Leyland, anyone?

European Leyland.
Maybe all the car companies in the world can merge...

...and then go bust. Leaving us to ride rickshaw's to work.

I'm sure this has been said many times, but I really don't like big automotive conglomerates. They might be good in the short term, but in the long term probably not. (decreased brand identity and quality of products.)

[Ferrer]

European Leyland.
Maybe all the car companies in the world can merge...

...and then go bust. Leaving us to ride rickshaw's to work.

I'm sure this has been said many times, but I really don't like big automotive conglomerates. They might be good in the short term, but in the long term probably not. (decreased brand identity and quality of products.)
I don't like big car companies either, for the reasons you mentioned.

In fact Fiat already has quite a lot of problems sorting its own premium brands. Lancias are just posh Fiats and Alfa Romeo has never ever turned a profit since Fiat bought it (and that was 23 years ago). I don't think adding moar brands will solve it.

[Zytek_Fan]

They're going to have hell getting rid of the negative view of Alfa, Fiat and Lancia in the US

[cmcpokey]

i would think that for the majority of buyers that would be targeted to buy fiats and alfas (possibly lancia, but i doubt they will make it across the pond) have that negative connotation. they were pulled form the US in the early 80s, and so they have lost any reputation they had.

i think it will work. mini came in without a real great rep, and not a lot of consumer awareness of the brand at all. they have been wildly successful. if fiat comes in with a good marketing campaign, and the right products for the market, they will do very well.

[Kitdy]

Why does Fiat Group keep on Alfa if it's been a money loser for so many years? Has Lancia made any money also?

[Ferrer]

i would think that for the majority of buyers that would be targeted to buy fiats and alfas (possibly lancia, but i doubt they will make it across the pond) have that negative connotation. they were pulled form the US in the early 80s, and so they have lost any reputation they had.

i think it will work. mini came in without a real great rep, and not a lot of consumer awareness of the brand at all. they have been wildly successful. if fiat comes in with a good marketing campaign, and the right products for the market, they will do very well.
Actually Alfa Romeo sold cars in the US well into the 90's, their last model was the 164 which was sold in America until 1995.

You mention Mini. Fair point but there's a fundamental difference. Mini is backed by BMW which have asolid reputation. Alfa Romeo (and Lancia) are backed by Fiat which everywhere except Italy has a disastrous reputation.

Why does Fiat Group keep on Alfa if it's been a money loser for so many years? Has Lancia made any money also?
Alfa Romeo is a legend in Italy and every Fiat manager thinks he can sort it out. It also has a better image than Lancia and as a result is in a better position to atack the premium market and the germans.

Lancia used to have an excellent image in the 80's and early 90's, and they used to sell 300.000 cars every year (which incidentally was the targer for both brands for 2010). But then in the 90's Fiat completely ruined it. They closed the competition department and they took all sportiness away from Lancia an gave it to Alfa Romeo.

[henk4]

Actually Alfa Romeo sold cars in the US well into the 90's, their last model was the 164 which was sold in America until 1995.

You mention Mini. Fair point but there's a fundamental difference. Mini is backed by BMW which have asolid reputation. Alfa Romeo (and Lancia) are backed by Fiat which everywhere except Italy has a disastrous reputation.

Alfa Romeo is a legend in Italy and every Fiat manager thinks he can sort it out. It also has a better image than Lancia and as a result is in a better position to atack the premium market and the germans.

Lancia used to have an excellent image in the 80's and early 90's, and they used to sell 300.000 cars every year (which incidentally was the targer for both brands for 2010). But then in the 90's Fiat completely ruined it. They closed the competition department and they took all sportiness away from Lancia an gave it to Alfa Romeo.

quite a few things to contest there. Fiat, disastrous reputation except in Italy? Really? Lancia reputation in the eighties: Rusting Monte Carlos, HPEs etc....and the Delta was not the most reliable car available....The WRC cars may have pushed up the image a little, but the quality of the production cars was abysmal.

[Ferrer]

quite a few things to contest there. Fiat, disastrous reputation except in Italy? Really? Lancia reputation in the eighties: Rusting Monte Carlos, HPEs etc....and the Delta was not the most reliable car available....The WRC cars may have pushed up the image a little, but the quality of the production cars was abysmal.
For premium cars? Certainly, Fiat has a disastrous reputation.

As for Lancia, in the second half of the 80's Lancia was on a bit of a roll. The Delta was literally winning everything, they had an endurance racing programme, the Thema had a Ferrari engine and above all the cars sold very well.

But most of all in relation to Alfa Romeo, Lancia was like Mercedes-Benz.

[henk4]

For premium cars? Certainly, Fiat has a disastrous reputation.

As for Lancia, in the second half of the 80's Lancia was on a bit of a roll. The Delta was literally winning everything, they had an endurance racing programme, the Thema had a Ferrari engine and above all the cars sold very well.

But most of all in relation to Alfa Romeo, Lancia was like Mercedes-Benz.
who talked about premium cars? Fiat has a good reputation for smaller cars (and I would not mind owning a 130 coupe).
The Lancia period you refer to saw an add in Dutch newspapers, indicating how many Lancias would come to Holland and how many were still available (in other words, you had to be quick). By April they stopped with that advertisement.

[Ferrer]

who talked about premium cars? Fiat has a good reputation for smaller cars (and I would not mind owning a 130 coupe).
The Lancia period you refer to saw an add in Dutch newspapers, indicating how many Lancias would come to Holland and how many were still available (in other words, you had to be quick). By April they stopped with that advertisement.
The discussion was about premium cars. Well at least Mini and BMW certainly are. And Alfa Romeo is too (or pretends to be at least).

In 1990 for instance Lancia sold 300.000 cars, which was 100.000 more than Alfa Romeo and some 70.000 more than Volvo. It wasn't even that far off BMW and Audi, about 60.000 cars behind them.

EDIT The figures are for Europe.

[IBrake4Rainbows]

What are the sales figures today. or at least last year?

[Ferrer]

What are the sales figures today. or at least last year?
Europe, 2008:

BMW 680.000
Alfa Romeo 102.000
Lancia 113.000
Audi 665.000
Volvo 225.000

The picture is quite clear...

[henk4]

I don't think the Fiat brand is trying to enter the US market with a premium purpose in mind. Alfa and Lancia is different, but I suspect that from the just over 100000 Lancias sold, the great majority are Ypsilons. Very popular with Italian women, but I doubt the American women will other preferences.

[Ferrer]

I don't think the Fiat brand is trying to enter the US market with a premium purpose in mind. Alfa and Lancia is different, but I suspect that from the just over 100000 Lancias sold, the great majority are Ypsilons. Very popular with Italian women, but I doubt the American women will other preferences.
The Ypsilon alone saved Lancia in the dark early noughties.

And despite Fiat not being premium, the 500 is the most premium of their cars and that's what they plan on selling in the US, at least under the Fiat badge. but Fiat's main focus for the US is Alfa Romeo, not the 500.

[Kitdy]

What are the odds for longterm success in this plot?

[henk4]

And despite Fiat not being premium, the 500 is the most premium of their cars and that's what they plan on selling in the US, at least under the Fiat badge. but Fiat's main focus for the US is Alfa Romeo, not the 500.

premium in the sense of snobbery? I suppose built quality will not differ from the Panda, if I am not mistaken they come from Poland.

[Ferrer]

premium in the sense of snobbery? I suppose built quality will not differ from the Panda, if I am not mistaken they come from Poland.
Yep added value, perceived quality. Call it as you like, but it sells cars.

[henk4]

Yep added value, perceived quality. Call it as you like, but it sells cars.

added value? Higher price? It is much more expensive than the Panda so it must be good?

[Ferrer]

added value? Higher price? It is much more expensive than the Panda so it must be good?
I'm not saying its improvement is tangible.

For whaever reasons people see it as better, and it commands a higher price so it gives more profits to the manufacturers. Therefore it's good.

Bear in mind I'm speaking completely from the bussiness point of view.

[henk4]

I'm not saying its improvement is tangible.

For whaever reasons people see it as better, and it commands a higher price so it gives more profits to the manufacturers. Therefore it's good.

Bear in mind I'm speaking completely from the bussiness point of view.
yep, it is all about image, A Panda 100HP is unlikely to sell well in the USA, although it is a much more practical car.

[Kitdy]

The Fiat 500 also looks great and probably is much easier to market.

[wwgkd]

The Fiat 500 also looks great and probably is much easier to market.

This. People who know about pandas over here consider them a joke, a car you buy to make a stupid video for youtube. I've actually heard some anticipation for getting the 500.

[henk4]

This. People who know about pandas over here consider them a joke, a car you buy to make a stupid video for youtube. I've actually heard some anticipation for getting the 500.
I could use some words to react on the first part of your post, but I have been accused in the past of being Anti-American..
But. was the original 500 ever on sale in the USA?

[Kitdy]

I could use some words to react on the first part of your post, but I have been accused in the past of being Anti-American..

Are European consumers that more intelligent car buyers? If a really good, say American-built Chevrolet crossed the pond, would they accept it? Something tells me no.

People are stupid everywhere, less stupid in some places yes; but still stupid.

[Ferrer]

This. People who know about pandas over here consider them a joke, a car you buy to make a stupid video for youtube. I've actually heard some anticipation for getting the 500.
How can you buy something that wasn't sold there in the first place?

The Panda is a very competent supermini.

Are European consumers that more intelligent car buyers? If a really good, say American-built Chevrolet crossed the pond, would they accept it? Something tells me no.

People are stupid everywhere, less stupid in some places yes; but still stupid.
Most probably it wouldn't be suited to our needs.

[Kitdy]

Most probably it wouldn't be suited to our needs.

Most probably, but lets make it idyllic and say it was the perfect car for Europeans. I still doubt it'd sell as well as it would had it a Vauxhall or VW or whatever badge on it. But you got my point.

[Ferrer]

Most probably, but lets make it idyllic and say it was the perfect car for Europeans. I still doubt it'd sell as well as it would had it a Vauxhall or VW or whatever badge on it. But you got my point.
You do have a point.

However GM thought that by introducing the Chevrolet brand to Europe thier would sell better than if they were badged as Daewoos, so your theory may be flawed.

[f6fhellcat13]

In terms of prestige:
Europe > Japan > America > Poop > Korea

[Timothy (in VA)]

was the original 500 ever on sale in the USA?

I think so, but never in any significant numbers.

[wwgkd]

How can you buy something that wasn't sold there in the first place?

The Panda is a very competent supermini.


You couldn't get them from a factory dealership, but all kinds of weird stuff shows up, and I have seen pandas over here. To clarify, my comment was about perceptions and how it would be easier to market the 500 here. I wasn't making claims one way or another as to whether the panda is good or bad.

[Ferrer]

You couldn't get them from a factory dealership, but all kinds of weird stuff shows up, and I have seen pandas over here. To clarify, my comment was about perceptions and how it would be easier to market the 500 here. I wasn't making claims one way or another as to whether the panda is good or bad.
I don't think he problem lies within the model for the US. It's more the badge on the bonnet...

[henk4]

Are European consumers that more intelligent car buyers? If a really good, say American-built Chevrolet crossed the pond, would they accept it?

no further comment. :)
The last ones we got were the Aleros. No match against any average European car.
Probably Trailblazers have been sold here as well, in very limited numbers. Two years ago we had a brandnew Chevrolet Impala as a rental car. You could feel the mould rims in the indicator stick.....It was big and probably cheap, but it did nothing to show quality and any efforts to sell that over here would have greatly failed.

[culver]

noughties.
I haven't heard that term for this decade. I like it as I've never figured out what to call the 2000s.

[henk4]

I haven't heard that term for this decade. I like it as I've never figured out what to call the 2000s.
Spaniards in the past have come up with new words. Monty Python did a very famous sketch about it;)