Chrysler, Fiat Confirm Global Strategic Alliance

Recent reports claiming that Chrysler and Fiat may sign a strategic partnership proved to be true as the two companies have just announced they are forming a global strategic alliance. Under the terms of the agreement, Chrysler will gain access to “competitive, fuel-efficient vehicle platforms, powertrain and components to be produced at Chrysler manufacturing sites,” as the two automakers said in a public statement. In addition, Fiat will help the American company evolve in certain markets by providing “distribution capabilities plus management services.”

On the other hand, Fiat will receive an initial 35 percent equity interest in Chrysler. Earlier reports also claimed the Italian carmaker may get the option to buy more than 50 percent of Chrysler's shares in the next few years, but such information is yet to be published.

Obviously, officials of the two companies were extremely delighted with the agreement, so here are the statements of Sergio Marchionne, Fiat Group CEO, and Bob Nardelli, Chairman and CEO of Chrysler LLC.

“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.

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,” said Bob Nardelli, Chairman and CEO of Chrysler LLC.
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About the author: Bogdan Popa
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Bogdan keeps an eye on how technology is taking over the car world. His long-term goals are buying an 18-wheeler because he needs more space for his kid’s toys, and convincing Google and Apple that Android Auto and CarPlay deserve at least as much attention as their phones.
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