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According to Automotive News “An alliance with Chrysler would allow Fiat to sell Alfas and the 500 in the United States because sharing manufacturing sites with Chrysler would reduce costs. Alfa cars and the 500 would be sold in North America through Chrysler, Jeep and Dodge dealers. At the same time, Chrysler could access Fiat's distribution network in Europe and Latin America.” This opening up of new markets could affect the panorama of the global industry.
One market that will likely not be affected is the coveted Chinese market. Kelly Wang of Gasgoo.com, Global Auto Sources, indicates that the alliance mainly focuses on the U.S. and European markets with no clear plan for opening up markets in China.
Furthermore both parties involved failed to find a business partner within the region; a must if attempting to open up business relations with China which requires the presence of a local partner to form a 50:50 joint partnership.
Chrysler is one of the American Automaking companies that was hit hardest by the economic recession. Just last month Chrysler applied for federal bailout money to stay afloat. This alliance means that Chrysler would, once again, have substantial foreign ownership after only 18 months of independence.
The partnership itself still requires the approval of the United States Treasury Department as well as from federal regulators. The alliance would allow Fiat to re-enter the American market for the first time since 1983.
By: Alberto Ramos Cordero
Posted January 20th, 2009 by Alberto
