Rumormill: Fiat could step in for GM in Europe, Latin America
Forget about letting the ink dry: even while negotiations have been ongoing between Fiat and Chrysler, there have been rumors of potential additional or alternative alliances which the Italian auto group has purportedly been considering. Things may have been put on hold with Chinese automaker Chery and with Nissan, but talks about a tie-in with BMW are afoot, as were rumors of a merger with French auto group PSA Peugeot-Citroen, to say nothing of Fiat's role in Tata's acquisition of Jaguar and Land Rover. Recent reports, however, suggest that Fiat may be in the position to take over part of General Motors' organization in Europe and Latin America.
The arrangement would see Fiat take control of Opel and Vauxhall, which are slated to be spun off into a separate unit. The deal would not include Saab or Chevrolet's European operations (which are essentially Bowtie-badged Daewoos), but would include its operations in Latin America. The reports suggest the GM deal would be in addition to Fiat's arrangement with Chrysler. All told, between Fiat, Chrysler and GM's Latin American and European sales, the new group would form the second largest automaker in the world, with sales (based on current levels) coming in behind Toyota's.
With Fiat particularly strong in those two core markets, the deal could make sense, but it would hardly be the first time Fiat and GM were in bed together. Back in 2000, the two automakers brokered a deal to collaborate, which cost GM over $2 billion, and then cost it another $2 billion to get out of again in 2005 when Fiat got back on its feet. For his part, Fiat chairman Luca di Montezemolo has denied the reports, but CEO Sergio Marchionne may have some plans of his own.
[Source: Automotive News Europe - subs. req'd]
Reader Comments (Page 1 of 2)
Rick C. 1:44PM (4/21/2009)
Remember the prediction: Six major automotive manufacturers on the planet. Consolidation has begun.
Reply
hypermiler 3:52PM (4/21/2009)
The consolidation theory was disproven a long time ago.
The rule of game is engineering, production efficiency, and margin, not volume.
Rick C. 4:11PM (4/21/2009)
Hardly. With so many manufacturers on the brink of bankruptcy, it's only a matter of time before they take the plunge and their assets get purchased. Consolidation. Say it with me.
Stu L Tissimus 1:44PM (4/21/2009)
Fiat's all over the place; I'm pretty sure the new Cinquecento is on the same platform as the Ford Ka...
Reply
Sanders 1:53PM (4/21/2009)
Yes, the Ka is built on the same platform that originated on the 500.
Bloke 2:23PM (4/21/2009)
The Ka does share the platform with the Fiat Panda and 500. But the Opel Corsa and Meriva also share their platforms with the Fiat Grande Punto and Alfa MiTo, and Fiat's highly regarded JTD diesels have been adorning Opels for many years. So, there's some logic to this partnership.
What's interesting will be how the light commercial market pans out if this partnership goes ahead; Fiat currently partner with PSA for their light commercial vehicles, whereas Vauxhall/Opel partner with Renault.
Ken 1:47PM (4/21/2009)
The mind boggles. We could be seeing what used to be Saturns and Pontiacs emerging as Chrysler and Dodge Sedans in the future.....
Reply
Yikes 1:51PM (4/21/2009)
Funny, GM starts investing in Fiat, backs out. Winds up giving Fiat 2 billion to get out of the deal, now Fiat looking to invest in GM.......
How long before both collapse?
Swede 7:53PM (4/21/2009)
Fiat is a well run company, they are pretty diverse too. They make less than half of their money on cars, the rest are farm equipment, trucks, engines and license fees related to their diesel technology.
revaholic 1:54PM (4/21/2009)
Sounds like Fiat is the slut of auto manufacturers!
Reply
LDMAN 1:59PM (4/21/2009)
Maybe but sluts are the ones getting ahead in life.
Sanders 2:07PM (4/21/2009)
I like sluts.
imoore 2:03PM (4/21/2009)
Everyday there's a rumor of a merger, a spinoff, one company buying a brand and/or another company, and vice versa. And at the end of the week, it's just hot air. With the economy in the tank and nearly every automaker in play, someone bound to print a news story, especially the mainstream media in order to gain readers and start conversation.
Sorry, but I'm not biting. I'll believe it when I see it.
Reply
Judy Zik 2:15PM (4/21/2009)
This one seems hard to imagine. I don't see the synergies between Fiat and Opel. They are both heavily centred on the Euro market and Opel is worth good money where Chrysler is available for nothing. Chrysleriat makes more sense since it gives Fiat a toe hold in a new market. Adding Opel would be a mistake. There is just only so much a little company like Fiat can gobble up at one time. The logistics of merging their operations with Chrysler will keep them busy for awhile.
Reply
Andrew 5:29PM (4/21/2009)
Merger? What merger. Fiat is getting a free piece of Chrysler... and not giving any shares in return.
Shiftright 10:54PM (4/21/2009)
The Fiat Group is hardly a 'little company'. They are a massive international industrial conglomerate of which cars are only a small part.
Kitko 2:16PM (4/21/2009)
Remember when Ford wanted to buy Ferrari?
Ad hoc unholly alliances are common in Europe and Japan.
There was an Alfa - Nissan partnership in the 80s (unfortunatelly, they used Nissan's body and Alfa's, ehm, not very reliable machinery so it didn't really work). Nissan has been allied with Renault for some time now.
BMW used Toyota's diesel in the first generation Mini, PSA's Citroen C1, Peugeot 107 and Toyota Aygo are the same car - made in Czech republic.
Ford used to use PSA's diesels, Lotus, owned by Proton, uses Toyota engines.
Mid-90s British Rovers were Civics and Accords in Rover bodies with British styled interiors, then, of course, BMW broke in....
...and now BMW and Daimler are engaged in share swapping to add to sharing engines.
Fiat/Lancia shared vans and minivans with PSA.
VW/Seat and Ford developped a minivan sold as VW Sharan, Seat Alhambra and Ford Galaxy.
In times of crisis, going one step pass the ad hoc solution is rather a normal thing.
Reply
Ken 2:30PM (4/21/2009)
Don't forget Chrysler's dealings with Maserati and Lamborghini in the 80s as well. I'm only thinking of this because I saw a Chrysler TC the other day.
Rends 2:24PM (4/21/2009)
Fiat doesn´t have enough money to buy Opel even if they get some percentage for free.
Opel needs an investor with money and Fiat can´t help here.
And i agree everyday new rumors about merger. Most of them are still myth and i don´t see a reason why this one should be something else.
Reply
Bloke 2:28PM (4/21/2009)
"Fiat doesn´t have enough money to buy Opel even if they get some percentage for free"
Really? What sum does Fiat need, how much does it have, how much will in finance via loans and debentures?