Fiat Separates its Auto Operations from Truck and Tractor Divisions

Fiat S.p.A. will separate its core auto operations from its truck (Iveco) and tractor divisions (Case New Holland), which will be reunited in a new public company to be called Fiat Industrial S.p.A.

CEO Sergio Marchionne announced that Fiat, Alfa Romeo, Lancia, Ferrari and Maserati brands plus the light commercial vehicle division will remain under the same roof, Fiat S.p.A.’s holding company. Also, the part of Fiat Powertrain Technologies that makes engines and transmissions for Fiat vehicles will remain within Fiat S.p.A.

Fiat CEO Sergio Marchionne said the split should be completed by the end of the year. Keeping the autos unit within the holding company may also help to a stronger capital integration between Fiat autos and Chrysler Group as Fiat plans to increase its current 20 percent stake in Chrysler to 35 percent within two years.

The core of the five-year plan included details of how Fiat’s carmaking division will work with Chrysler in areas such as purchasing, development, engineering and sharing of common parts and components. “The 2010 to 2014 plan for Fiat Group Auto is about becoming a real competitive global player in conjunction with Chrysler. Without Chrysler, Fiat Auto would have remained a marginal player for the rest of its life,” CEO Sergio Marchionne said, quoted by the Financial Times.

He added that Fiat and Chrysler will work together on engineering and manufacturing. Fiat will also take advantage of Chrysler’s expertise in building large vans and sports utility vehicles, while Chrysler will benefit from Fiat’s mini, small and compact vehicle platforms in order to enter new segments. Fiat’s Lancia brand would be integrated in Chrysler’s own marque through a full line-up which the two brands would develop together.
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