Is there more than a joint minivan project in the future for Chrysler and VW? The Car Connection feeds the flames of corporate speculation. "There is going to be another round of mergers in the auto industry," the chairman for the Center for Automotive research asserts. "And the one company that matches up well with Volkswagen is Chrysler." David Cole feels Chrysler has a lot to offer the German automaker: U.S. production facilities, a large dealer network and recently reduced labor costs. With VW's stated goal of selling a million vehicles in the U.S. per year, they'll have to do something new. That said, the last Chrysler – VW collaboration gave unto us the Volksie-engined Dodge Omni/Plymouth Horizon twins. Just think of the possibilities now… The next Chrysler 300 could be built on the A6 platform, a revitalized Crossfire could feature a Boxster drivetrain, or the Golf/Rabbit could be the donor for the next Caliber. Of course, if if you switch that around, we could be looking at an A4-a-like with a Sebring-grade interior.
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While all the ideas presented in the article are great, there are a few problems.
1. Porsche are slowly closing their iron grip on VW and I can’t see why Porsche would allow VW to buy Chrysler since Porsche bought VW to dilute its emissions for EU regulations. Last thing it needs is more fuel thirsty cars in its range.
2. Chrysler merged with Daimler in the hope of access of good platforms and good German technology and what did they get? Nothing! I can’t see VW sharing much in the way of technology with Chrysler, when it already shares its parts and technology with Audi, SEAT, Skoda, Bugatti, Lamborghini and Bentley.
I just can’t see what VW will hope to get out of it. Organic growth is where VW’s future lies. Past experience has shown that growth through acquision seldom ever works. Have we already forgotten DaimlerChrysler? Ford’s PAG group? GM’s acquision of SAAB?
Man, all those VW NAmerica execs relo’d from their old Auburn Hills, MI corporate HQ (across the street from the Chrysler Tech Center) to new offices in Virginia last month are going to be pissed…
Dear Ms Katie – spot on! This is an April fool come early! Can’t imagine Mr Wiedeking wants to threaten his recent $100million pay rise by getting burnt by Chrysler – after all, a quick phone call in German to a Mr Zietsche should tell him everything he wants to know about owning a failing US car company.
This idea is a non-starter. Volkswagen already had their chance to buy up Chrysler in 1979, and did not do so.
Now that Porsche (the minnow) is ready to swallow Volkswagen Group (the whale), I don’t see how Chrysler could be part of the meal here.
Not to mention the fact that I’d guess that the few remaining Chrysler execs would probably all walk out if Cerebrus sold the company to Germans again. Nix, nein, fugedaboudit.
Now, reciprocal contractual sales of vehicles – that might fly. A nice Skoda Superb rebadged as a Chrysler to replace the AWFUL Sebring? Yes! (In exchange for the already done deal of VW selling badge-engineered minivans as VW’s soon).
I can’t believe that I just thought of a Skoda being rebadged as a Chrysler, but I think in the future, we’ve all got to just think outside the box. (American readers will say “huh?” but our British readers will get the joke). Of course, the Czech Republic AND Skoda have both come a long way since ditching communism/socialism (and Slovakia) and, respectively, being bought by VW.
I can see it now Bo and Luke Duke,roaring around Hazard County,in a modified Golf/Rabbit General Lee graphics,and a confederate flag on the roof.
KatiePuckrick, Porsche didn’t buy VW to dilute it’s emissions. First of all Porsche, the carmaker, isn’t who’s buying VW. It’s a new holding company, Porsche Holdings, that now owns both Porsche and a big chunk of VW. They (VW, Porsche Automobiles) will stay two separate companies, and can’t comingle emissions averages. The reasons Porsche holdings is buying VW are otherwise.
Frankly, VW has much, much more to offer Chrysler platform wise than Daimler did: a full range of efficient FWD cars and CUV’s.
I’m not saying this rumor has legs, but I can see why it started. VW desperately needs to solve its US market problems, including needing to produce outside of the euro area.
VW certainly needs to solve its U.S. market problems, but somehow I don’t think hitching their star to a company with deeply troubled image, reputation, and product line is likely to help…
@KatiePuckrik
2. Chrysler merged with Daimler in the hope of access of good platforms and good German technology and what did they get? Nothing!
Exactly. They got a last-gen SLK for the Crossfire, parts of a last-gen E-Class for the 300…and what else? Not much, obviously.
I am so amped about this…can’t wait to put my deposit down on an Omni R32. Hope it’s not too soon though, I need to figure out if I want the “Bon Jovi” or “Bryan Adams” edition.
Katie said:
Chrysler merged with Daimler in the hope of access of good platforms and good German technology and what did they get? Nothing!
They got a nice I-4 CRD engine to drop into the Liberty and has sold a zillion Sprinter vans with the same power plant. I realize fleet coverage is not the forte of TTAC but the Sprinter seems to have gutted the market out from under the Ford Econoline in a very short time. Mid-high 20s MPG out of an SUV & Van are nothing to sneeze at, and certainly “good German technology” (Yes, I know the engine in question is Italian in origin but Chrysler would not have it without the Germans in der haus.)
Mind you, that and the Missfire/300 platforms, isn’t quite NOTHING, but it sure wasn’t the SOMETHING we all expected. So you are largely right but the term “nothing” is a bit over the top.
–chuck
Would this make some sense in the context of a secret prearranged back room deal between Cerebrus and VW? Cerebrus buys Chrysler and uses its independence and reputation to wring cost-saving concessions from the union. Then Cerebrus flips Chrysler to VW, giving VW a sweetheart labor deal and making itself a tidy billion for its services.
VW buying up some of the Chrysler assets makes sense, but buying the whole company would be silly. Who wants the union contracts, warranty exposure and bloated tired dealer network?
Cerberus could certainly include VW in the list of those buying certain pieces of Chrsyler.
VW is a major global automaker with a puny North American presence. Of all the global auto companies it gets the smallest fraction of it’s sales in the US with perhaps the exception of Fiat. The question is whether or not Fiat is really a global player though.
Ford and GM both do far more business in Germany than VW does in the US of A, which must strike the Germans as being contrary to the natural order of things.
Daimler’s purchase of Chrysler wasn’t necessarily a bad strategic move, but their handling of it once purchased was a complete cluster____.
That said, VW has no need for the bloated US Chrysler dealer network. However, a buyer can pick and choose assets and leave dealer network out of it. Look at the GM purchase of Daewoo assets for one example.
VW-Chrysler would be well positioned to develop a line of small pickup and delivery trucks which could then be manufactured and sold around the world. Something about 75% the size of a Sprinter would do nicely. VW has the diesel engine technology to fit nicely in that market. VW has low cost diesel engine production factories in Eastern Europe and a strong manufacturing presence in Mexico and Brazil.
Chrysler has no meaningful manufacturing or sales presence outside of the NAFTA region. I don’t believe there is any way for an automotive company to be competitive in volume markets without being a true global company going forward. The investments to hit ever tighter fuel economy and emissions standards worldwide need to be spread out over the largest possible markets, and Chrysler is in a horrible position to do so. It’s current owners are number crunching deal makers, not engineers, not production experts and not world class retail marketers. They do not have what it takes to compete with General Motors, let alone Toyota, Honda or China Inc.
VW, on the other hand, has the skill sets in design, engineering, global production and global marketing to be a long term player.
Renault already has Nissan, so they really don’t need a bigger North American presence.
VW, on the other hand, is one of the few companies which could have good reason to buy certain strategic assets of Chrysler.
Another factor is stopping third parties from doing the deal. China Inc. would probably have already bought Chrysler if they could find a way through the political minefield. Mahindra or Tata are obvious suitors once the Jaguar/Land Rover thing gets sorted out. VW may well want to buy Chrysler in part to keep it out of the hand of another strategic buyer.
Whatever happens, no way is Cerberus going to hold the company in it’s investment portfolio for a decade or more.
Two of the world’s worst quality manufacturers getting together! Is that opportunity knocking? Might be a good time to take a position in the junkyard business.
“I’m not saying this rumor has legs, but I can see why it started. VW desperately needs to solve its US market problems, including needing to produce outside of the euro area.”
Aren’t VW’s problems poor reliability and high prices? It’s hard to see how that’s solved by purchasing Chrysler.
The idea only makes sense if VW uses Chrysler for: Trucks. VW Diesel engines and Chrysler trucks (and Jeeps), otherwise Chrysler cars are dismal and compete with VW offerings in the USA. German engineered Jeeps and Rams. Sell the Chrysler car division to BMW (as a Trojan horse.)
Antone said: Sell the Chrysler car division to BMW (as a Trojan horse.)
Love it! Ha!
As a side note, there’s no mention of this rumor on allpar.com and they’re usually pretty good at posting stuff like that.
Where do I put down my deposit for one of the first Wolfsburg Limited Edition Sebrings?
It would be a wise move for Chrysler to get a piece of the VW/Audi (MHB,MQB,MLB) platforms.
http://www.autocar.co.uk/News/NewsArticle/AllCars/229366/
Chrysler will have their new Phoenix V6s and DSG transmissions soon…Nardelli needs to hire a competent Interior Design Engineer.
I would consider myself a VW/Audi fan, I have two of their products in my garage. I just can’t imagine a Sebring or a Jeep Compass with their Fisher Price interiors being in the same family as Audi who builds arguably the best interiors in the business. I don’t really have anything constructive to say about this article so I’m just going to whine.
It will be a sad day when I’m out cruising in my TT and some caliber pulls up along side, the driver yelling out, “hey mate”. I might puke down the side of my car, and we all know that isn’t good for your paint. Hell that is reason enough for me not to support this buyout.
Pro:
The Euro is at a historic high, and I don’t see it going much higher. It could be a good time to buy American equity.
Con:
VW probably thinks it can get Chrysler at fire-sale prices further down the road.
Another con: Everything else.