Chrysler is considering bringing a Fiat-engineered subcompact sedan from Serbia to North America under the Chrysler brand. The Chrysler brand product plan, unveiled in November, called for a Fiat-derived subcompact sedan to be imported in 2013. The vehicle would be built in Kragujevac, Serbia, where Serbian automaker Zastava Automobili once made the Yugo.

Chrysler? Fiat-engineered subcompact? The Yugo plant? C’mon Automotive News [sub]… April Fools was weeks ago. Besides, this seems too cruelly ironic to even properly be a joke. Remember, these little gags have to come from a place of love…

Ahead of Fiat’s 5-year plan presentations, Automotive News [sub] is reporting that the Turin-based firm is developing a four-door version of its 500 subcompact. And not just to take on Europe’s Opel Meriva and company: the 500 Multipla will be then fourth and final member of the US-market 500 family.

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Chrysler has always held a special place in TTAC’s chronicling of Detroit’s decline, enjoying a bespoke “Suicide Watch” in contrast to our Ford and GM “Deathwatches.” In the first entry in that series Frank Williams wrote of a gutted firm, dependent on incentives and flagging truck sales, seemingly doomed to drag its foreign partner into bankruptcy. Four years and countless opportunities for death with (some) dignity later, Chrysler presents much the same picture. Sure, it’s been rinsed of debts and excess capacity in bankruptcy court, but the Pentastar’s brands are still fundamentally damaged from years of self-abuse and the firm is struggling (and failing) to improve on last year’s sales numbers, which were recorded en route to said bankruptcy. Inventory may be under control, but Frank’s four-year-old assessment of an investor warning by JP Morgan could have been written yesterday [with “DCX” replaced by “Fiat”]:

JP Morgan remains convinced that management patience towards Chrysler has “worn thin and increases the likelihood that DCX will reduce exposure to Chrysler.” It’s the investment community’s equivalent of yelling “jump!” to someone standing on a ledge.

In fact, analysts from London’s Bernstein Research wrote nearly the exact same line yesterday. Chrysler has officially shuffled back onto the ledge, and once again the analysts are shouting “Jump!”

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Inspired by the Volvo-Geely deal, Automotive News Europe [sub]’s Luca Ciferri contemplates the unthinkable:

Back in 1986 Ford offered to buy nearly 20 percent of Alfa with its stake rising to 100 percent if a turnaround plan for the struggling government-owned brand succeeded…. But the venerable sports car maker is still European. Its destiny is decided in Turin. If Ford had bought Alfa, the brand probably would be now owned by a Chinese automaker…. I wonder how the Alfisti would react to the prospect of decisions on future Alfa cars being taken near Beijing. I wonder what the unions would say if they had to learn Chinese?

Well Luca, infamous Italian xenophobia aside, perhaps the better question would be could Alfa really be any worse off than it currently is? If the brand manages to survive the year under its blessedly Italian leadership, it will be lumped into a GM-style “brand channel” and its new products will be based on Chrysler’s leftovers. Oh, and there’s no guarantee that it will survive its “strategic review” at all, as Fiat has said there’s a chance that Alfa won’t survive past another year. So who knows, maybe the Chinese will end up with Alfa sooner than Ciferri might imagine.

In June 2009, Fiat was handed 20 percent of a washed and rinsed Chrysler for no cash, and despite protests, the deal was rammed through. The UAW was given 55 percent, the U.S. and Canadian governments controlled 8 and 2 percent, respectively. Often overlooked, or forgotten, the deal came with an option for Fiat to raise its stake to 35 and eventually as high as 51 percent if it meets some rather vague financial and developmental goals, hashed out with the U.S. government.

Sergio Marchionne thinks the goals are met. He plans to increase Fiat’s holdings in Chrysler to 35 percent within two years, says Reuters. (Read More…)

In the world of automobiles, it appears that China isn’t the only fruit ripe for the plucking. Brazil is buzzing. They’re weathering the current economic fragility very well, and companies are looking to invest in there. Down in Brazil, economically speaking, it’s car-naval time! (Read More…)

Media from Associated Press to The Business Standard of India are abuzz with reports that Fiat (the company) is planning to cut 5000 jobs and will be spinning off its car division this summer. The stock market seems to like the idea: Fiat’s shares rose 4.15 percent. (Read More…)

While Toyota has recall troubles in one of their largest markets, elsewhere in the world, another carmaker has serious recall troubles in one of their biggest markets. We usually don’t comment on each and every recall everywhere, but this one warrants mention: Brazil’s Justice Ministry has fined Fiat’s Brazilian subsidiary 3 million Reais (about $1.7 million) for failing to comply with four recall orders. Fiat had been asked to recall Stilo models to fix a wheel problem that may (note the key word “may”) have caused 8 deaths since 2004, says Business Week. No recall followed. (Read More…)

Chrysler fan site Allpar.com got its paws on a list that it says depicts Chrysler’s upcoming production plans. If true, this list confirms that many of Chrysler’s refreshed products won’t be hitting the streets until 2010 is nearly over, and that the debuts will come thick and fast. So don’t expect much to improve in the way of sales for Chrysler until at least December. Even then, every other TV ad will have to be for a Chrysler, Jeep or Dodge if the firm hopes to educate the buying public about these re-launches. The chances are good that Chrysler will survive until December, barring any supplier issues, recalls or further sales dips. Come December, when we have seen and driven this new generation of Fiat-refreshed products, we’ll have an idea of Chrysler’s chances of survival until 2013, when the next wave of fully Fiat-developed projects arrive. This should be interesting.

Fiat is acknowledging a “a collapse in orders” as Italian scrappage rebates expire, and as a result, all six Italian Fiat plants will close for two weeks [via the BBC]. The move is being justified as a break from past overproduction, with Fiat spokesfolks claiming “we’re only building to demand.” Though that might help CEO Sergio Marchionne justify his $6.5m paycheck, it couldn’t come at a worse time. Fiat is putting 30,000 employees out of work for the next 14 days, just as it faces widespread protests over the closure of its Sicilian Termini Imerese plant. With the Italian government (and even the Pope) condemning Marchionne’s decision to cut the perpetually money-losing plant, this unplanned vacation will give workers plenty of time to agitate and organize further resistance. Not that Marchionne could have avoided it. Italy’s consumer subsidies for new cars were keeping demand artificially high, and the Italian government was hoping it could offer their renewal in exchange for a Fiat commitment to the Imerese plant. But as the Wall Street Journal [sub] opines, Europe’s scrappage-swollen market has to come down to earth at some point. Just as Fiat has to rid itself of some of its terminally underperforming Italian capacity, at some point. And, as usual, there’s no time like the present.

As much grumbling as there is among US-based enthusiasts about increasing efficiency standards, Europe’s emissions requirements are yielding even stranger fruit than mere V6-powered Porsche Panameras. One such product of the conintental obsession with downsizing: Fiat’s new TwinAir engine, available this summer on European-spec Fiat 500s. The 900 cc turbocharged twin generates 85 horsepower while emitting fewer than 100 grams of C02 per kilometer, and uses Fiat’s much-vaunted MultiAir technology. An uprated turbo version with 105 hp will become available later, reports Edmunds, as will a 60 hp naturally-aspirated version. The only other automaker to offer a two-pot in a road car? That would be Tata, which equips its Nano with a 33 hp, 632 cc engine. Given the close ties between Tata and Fiat, could Europeans have a 100 hp+ Abarth-branded Nano in their future?

Fiat/Chrysler CEO Sergio Marchionne seems ever more committed to the idea of bringing the Alfa Romeo brand to the United States, telling Automotive News [sub]:

I’m a lot more confident now that Alfa Romeo will reconstitute a product offering that is acceptable globally, and more in particular in the United States and Canada. There is a strong likelihood that the brand will be back here within the next 24 months

Last week we took the counter-intuitive step of calling out Chrysler for refusing to hype its forthcoming products. “Let’s face it:” we wrote at the time, “Chrysler needs buzz, hype, awareness, or some kind of excitement surrounding its future generally and its forthcoming products in specific (if only in the irritating “teaser” format) almost as much as it needs anything else.” Well our wish has been granted, sort of, as this rendering of a 2013 B-segment Dodge hatchback has hit the internet [via AutoBirdBlog] to inspire rare optimism about the Chrysler Group’s future. For a number of reasons though, this is not the buzz-builder we were looking for.
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Alfa has rekindled its long lost love with a mature lady: Aunt America.

Last December, Cammy Corrigan reported on TTAC that there are “very important opportunities for Alfa Romeo in the United States.” At least in the eyes of Luca di Montezemolo, Chairman of Fiat. Despite being the object of unconditional admiration of Alfa-crazed owners, commonly known as “Alfisti,” Fiat’s sporty brand has reportedly lost €200m-€400m per year for the last decade. So something needs to be done.

“Andiamo a America,” appears to be la soluzione in Torino. Reuters reports that “Alfa Romeo is likely to return to North America by 2012 after a 15-year hiatus.”  Alfas were last sold in America in 1995. (Read More…)

Fiat/Chrysler CEO Sergio Marchionne was supposed to give a speech in conjunction with the Chicago Auto Show today, but backed out at the last minute, sending Dodge honcho Ralph Gilles in his place. The Chicago Sun Times was able to snag an interview with the globetrotting CEO though, and it features some of Sergio’s more candid (if confusing) comments on the state of new product development at the New New Chrysler. Of particular interest is his very apt criticism of Cerberus’s mismanagement of new product development, specifically the decision to replace the 300 before the Sebring.

The biggest market segments in the United States are the C [midsize cars] and D [large luxury vehicles] segments. If you only have a dollar to spend that’s where you go spend it, especially if you’ve got products that are structurally not working.

The decision was made to invest elsewhere. So we developed a brand-new platform for the 300, a decision that took capital that may have been required elsewhere to go play in a different sandbox. Until you’re clear about where you need the money, where the money needs to be spent to ensure longterm survival – that part of it was substantially missing.

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