Fiat Looks In Many Places for a U.S. Market Partner
By Brendan Moore
Fiat is engaging in what can only be described as the speed-dating version of automotive joint venture activity, as they are energetically and simultaneously talking with Ford, BMW, Tata and Chrysler about either manufacturing capacity and/or sales networks in the United States.
Fiat wants to sell all of their brands again in North America, as opposed to just their very successful high-end sports cars – Maserati and Ferrari. In order to make money selling their less-expensive brands, Fiat has decided it will soon (2011 is the preferred date) need to start producing those cars in the United States; specifically Alfa Romeos and Fiat 500 models.
Therefore, Fiat is looking like mad for a partner with some extra production capacity that could manufacture Alfa Romeo models and the single Fiat 500 model on Fiat’s behalf. Both Ford and Chrysler have unused production capacity in spades. BMW is not in the same position of having spare production capacity as the domestic makes, but conceivably might have enough extra capacity to squeeze out the small production runs Fiat would require in the short-term. So the dating game has begun.
How does Tata fit into this? Well, Tata owns Jaguar and Land Rover as of this morning, and Fiat is thinking about having Tata churn out some premium rear-wheel-drive cars for Alfa Romeo, as well as possibly piggy-backing on the Jaguar dealer network in the U.S. and Canada in order to retail the Alfa Romeo cars without having to go through the expense, time and bother of setting up their own dealer network.
“I think I would be more than pleased to collaborate with Tata in terms of Jaguar/ Range Rover, if in fact it ends up being owned by them,” Sergio Marchionne, Fiat’s chief executive, told the Financial Times when asked about this possibility.
Pretty heady stuff for Tata. Welcome to the big leagues, guys.
On the U.S. manufacturing front, it’s a pretty safe bet that Ford would be very interested in keeping some of their production capacity running and would be amenable to a deal. Chrysler would be just as interested in reducing idle production capacity, but may not be as interested in partnering with Fiat. BMW? Well, their current production ability is pretty much spoken for, but their interest in doing a deal with Fiat may still be considerable for more strategic reasons.
This should be well worth watching.
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