Although Chrysler continues to deny it is in talks with any other automaker, a new report suggests the Michigan-based automaker has been negotiations with Italy’s Fiat Group that could result in a wide-spread strategic alliance.
According to Automotive News, Chrysler has begun talks with Fiat in the hopes of speeding up its North American turnaround. If a deal is hammered out, Fiat would likely supply Chrysler’s North American operations with several vehicle platforms, ranging from minis to upper-medium platforms. Additionally, the agreement would allow Chrysler access to Fiat’s engines and transmissions.
In return, Fiat could receive cash or an equity stake in Chrysler. However, the deal could also allow Fiat to use Chrysler’s North American manufacturing and distribution infrastructure. Fiat has been planning the U.S. re-launch of its Alfa Romeo brand for some time now, but has stumbled in finding local production partners. The Chrysler alliance could be just the relationship Fiat has been searching for.
If Chrysler does allow Fiat access to its NA supply base, the Michigan automaker could also grant Fiat access to its U.S. dealer network. With Chrysler trying to shed several hundred dealership and Fiat looking to get its foot back in the North American door, it could be a win-win situation for both automakers.
Although the deal is far from done, the pieces could fall into place quickly if an agreement is reached. Chrysler’s cross-town rivals are expected to launch a new wave of minis in 2010 and 2011, so Chrysler is likely aiming for a similar release date. On the other side of the coin, Fiat is targeting a 2011 U.S. launch date for its Alfa Romeo brand, so the details would have to be finalized well before that date.
