Fiat, seemingly not fully content with making an alliance deal with Chrysler last week, says it is considering merging its current automotive lines and Chrysler with General Motors’ European operations – namely Opel. The combined group would become the fourth largest automaker in the world, a little larger than Ford Motor Company.
Fiat CEO Sergio Marchionne has long stated that he believes the industry will be forced to consolidate in order to survive. Marchionne has said that Fiat needs to sell more than the 2 million cars it currently sells; his goal would be for the company’s operations to sell between 5 and 6 million vehicles.
Forming an alliance with a desperate Chrysler and picking up GM Europe at a cut-rate price would help Marchionne achieve his goal for Fiat.
Critics, however, have suggested that perhaps the Italian automaker is biting off more than it can chew. Marchionne addressed these allegations in a recent call with his investors, stating, “Size managed well is good. Size managed for empire-building purposes is nonsense.”
GM has not addressed Fiat’s interest in its European operations, merely issuing a blanket statement: “GM officials routinely discuss issues of mutual interest with other automakers. As a policy, we do not confirm or comment publicly on those private discussions, which in many cases do not lead anywhere.”
Unlike Chrysler, Opel’s current products and distribution networks more-or-less overlap with Fiat’s. Though the volume is higher with Opel, sales have remained stagnant, the opposite of growing Fiat, leading many analysts to question Fiat’s motives.
