• Oct 22, 2010


Sergio Marchionne, CEO of Fiat and Chrysler, has reportedly indicated that the Italian automaker is interested in raising its stake in the Auburn Hills automaker. Currently, Fiat owns 20 percent of Chrysler and it wants to raise that figure to 35 percent by the end of 2011. Fiat has had a strong third quarter, earning around $236 million.

According to the Detroit Free Press, in order to increase its ownership stake by 15 percent, Fiat has to hit three specific targets that are worth five percent apiece. The first goal is to launch the 1.4-liter MultiAir engine being built at Chrysler's plant in Dundee, Michigan. That engine is slated to go into the upcoming Fiat 500.

Second on the task list is for Chrysler to produce a car that achieves 40 miles per gallon. Marchionne believes this vehicle will enter production towards the end of 2011. It will be a compact hatchback branded as a Dodge.

The final five percent will be earned when Chrysler increases its sales outside of the US. Specifically, it will focus sales efforts to increase volume in South America. Per Marchionne, this last objective will prove the most difficult because of the way Brazil regulates its dealer networks. In fact, Fiat is looking for alternative ways to earn the final five percent stake it seeks from Chrysler.

Thirty-five percent is a hefty piece of the Chrysler pie, but much more can be made available in the not-too-distant future. Once Chrysler is able to repay both the Canadian and U.S. governments for the $8 billion in loans it received, the Italian automaker will be able to raise its stake to 51 percent.

[Source: Detroit Free Press | Image: Massimo Pinca/AP]


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    • 1 Second Ago
  • 19 Comments
      Carpenter
      • 4 Years Ago
      Its more like a takeover isn't it ?
        • 4 Years Ago
        @Carpenter
        At least they show genuine interest in Chrysler, and I don't sense this as being as hostile as Daimler was. The latter was just in it for the quick cash and the mandatory pillaging.
      • 4 Years Ago
      Caption: "Quick, toss me a new hairpiece!"
      • 4 Years Ago
      I hope Fiat succeeds with Chrysler, but I'm not currently convinced they will do more than build Jeeps in the USA, and use the Dodge and Chrysler stores to sell imported cars.

      After all, BMW and Mercedes are building their SUVs here and importing their sedans.

      The first hint is Fiat's plan to built the 500 in Mexico - with engines exported from Michigan.
      • 4 Years Ago
      When I see that picture I see him saying"I can a make it do zis"
      • 4 Years Ago
      can somebody please get this man a comb already
      • 4 Years Ago
      The new management of Chrysler appears to be the best since Lee I. Look at the quality of interiors coming in 2011 and all of the full product lines coming in the next 4 years. I am behind this management team even if they are in Italy.
      • 4 Years Ago
      I'd perfer a 51% ownership by Chrysler stockholders and 49% to Fiat. Marchionne has been fantastic for Chrysler, but what happens down the road when he is gone and things may change? Chrysler MUST remain in American ownership control. That's a barganing chip for the third leg up in Fiat ownership stake based on world market distribution as defined by Washington. Lets keep that ownership in America..Still a good deal for Fiat but a better one for Americans...... Think about it guys...while we still can.
      • 4 Years Ago
      according to allpar, it is a sedan, not a hatchbach and will share a platform and be based on the alfa romeo giulietta! the overall length is about 171-inches for the alfa which would make it about the length of the old dodge shadow...the wheelbase is 103.7-inches, the same as the mitsubishi lancer which did not start out as a mitsubishi, it was dodge's version of the chrysler lebaron gts! chrysler and mitsubishi are sharing nameplates. the mitsubishi raider was dodge's version of the montero... either way, this new dodge will pretty much be the replacement for the neon! rumors about engines include a more powerful world engine (2.4L) and fiat's 1.4...it just doesnt specify if it is the 100-hp version that will be in the fiat 500, or if it is the turbo version with 170-hp! i guess we will have to wait and see!
        • 4 Years Ago
        Points for prolific use of exclamation marks!!!!
      • 4 Years Ago
      There's no drama in this announcement. Most folks in, or who follow the industry, suspected Fiat would most likely pursue a larger share in Chrysler. And if the company is successful in paying back it's government loans, Fiat will acquire controlling interest.

      In the long run this could be the best thing for Chrysler.
      • 4 Years Ago
      i wonder what those regulations in brazil are?
        • 4 Years Ago
        I wonder if it has to do with the extreme import taxes Brazil levies on all-things-not-made-in-Brazil...
      • 4 Years Ago
      Could this finally be the Hornet? I keep thinking US car companies should jump on the "box car" bandwagon. Kia has shown you don't have to be first to do it best.

      But this will probably end up a fiesta competitor, which could be interesting as well.

      I'm still waiting for the Demon.
      • 4 Years Ago
      As they deserve
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