The AFP reports that Chrysler is “currently reconsidering how it uses major auto shows for revealing new vehicles and concepts,” by way of explaining why Chrysler has “nothing new” for the Detroit Auto Show. Spokesman Rick Denau explains “we’d like to do things closer to the on-sale date of the vehicles and most of our new stuff isn’t coming until the second half of the year.” In reality, Chrysler is pushing the limits of the possible with its attempt to re-work the Chrysler and Dodge lineups in record time. Except for the new 300 and Grand Cherokee which made ill-fated debuts in Chrysler’s “viability plan” Chrysler’s refreshed products won’t be ready for public consumption until shortly before they go on sale, and it’s still likely that some of those release dates could be pushed back. In the meantime, Fiat will rebadge a Lancia as a Chrysler for the Detroit show. Because that’s almost as good as showing a new model, and it’s certainly as good as it gets for Chrysler right now.
Fiatsler is bringing Fiat back to the US as a one-model-brand (500) with a dedicated sales and support staff just to meet one of these government benchmarks… will they be crazy enough to build an engine in Michigan and ship them to Mexico to meet another?
The short answer: of course. Fiat gets five percent of Chrysler’s equity for building the engine in the states, but unless there are unrevealed US-market applications for an engine with 92 lb-ft of torque, they’ll all be shipped to Mexico and installed in Fiat 500s. According to Marchionne, half of the Toluca, Mexico Fiat 500 production will be sold in the US with the other half going to Brazil. For a guy who regularly bemoans the poor strategic positioning of Fiat’s factory sites, Marchionne is surprisingly willing to bend a few principles for five percent of Chrysler’s equity. Will it work? Sergio is still asking for time, telling reporters “by the end of 2011 and in early 2012, you should be able to tell how our plan is working.”
In Italian tradition, there’s not a lot of love lost between the Southern and Northern parts of the country. In part, because the North has always held the majority of the wealth and in part, because the two cultures are so very different. In this light, Sergio Marchionne’s plans, straight from Fiat’s Turin headquarters, to end production at their plant in Sicily, probably didn’t do much to help North-South relations. But don’t worry, the Italian government (and possibly Indian automakers) are here to help. The Times of India reports that the minister for economic development, Claudio Scajola, invited Indian firms to invest in the Italian automotive industry. More specifically, the invite was to take over Fiat’s unprofitable car unit in Sicily, which is being eyed for closure. “We are absolutely happy and open to any Indian investment in the automotive industry as well as in any other industry,” Claudio Scajola told reporters in Mumbai. “We do hope that Indian investors come to Italy.” Tata Motors declined to comment and Mahindra & Mahindra said they do not comment on speculation. Chinese firm Chery has denied being in talks to buy the plant. Looks like Claudio Scajalo needs a harder sell to bring those Asians westward.
Cross-cultural alliances are the craze of the moment in the auto industry, particularly in the form of Europeans hooking up with Japanese partners. Renault & Nissan, PSA & Mitsubishi, Volkswagen & Suzuki and Bertel Schmitt & Tomoko (sorry, couldn’t resist it!) are just a few examples. Fiat, on the other hand, is not following the crowd. Moneycontrol.com reports that Luca di Montezemolo, Chairman of Fiat, is saying no ad un socio giapponese. “The others are doing what we have (already) done,” Montezemolo says. “This is a time when we have to be careful not get indigestion.” Is the Chrysler merger not sitting well on the stomach?
Check out Fiat/Chrysler CEO Sergio Marchionne’s recent quote-tastic speech and Q&A session at the Peterson Institute for International Economics. The speech is almost identical to the one he gave at the Five-Year Plan, but the Q&A session is full of fun insights, ranging from Sergio’s fear of a Chinese planet and Opel regrets to the reasons for pricing discrepancies between Europe and the US.
Between trying to pull of one of the greatest attempted miracles in the history of the auto industry, and keeping things together at Fiat, you can bet Sergio Marchionne does. He tells the Freep:
This cannot go on forever. Certainly within the next 24 months, we’ll find a more permanent solution, either there or here. I’m not threatening the Italian side with a departure from Italy, but we need to find a solution.
Chrysler CEO Sergio Marchionne isn’t bothered by his firm’s sliding market share, which have declined to the point where Honda will certainly surpass them to become the number four automaker in America. At least that’s what he keeps saying, and Automotive News [sub] went ahead and made it a headline. If dealers are “expecting us to call them up and give them a $6,000 check for every new vehicle, they won’t get the call,” Marchionne joked recently in the Detroit Free Press.
In a lengthy, wide-ranging interview with Automotive News [sub], Fiat/Chrysler CEO Sergio Marchionne got an awkward question from AN’s Luca Ciferri.
Your five-year plan forecasts that Chrysler’s operating margin will peak at 7 to 7.7 percent of revenues in 2014. In November 2006, you predicted that Fiat Group Automobiles’ operating margin would peak at 4.5 to 5.3 percent in 2010. How could Chrysler’s post-global recession peak profitability be 50 percent higher than Fiat Group’s pre-global recession assumptions?
See this ad for Lancia and/or world peace? Now check out the first post-bankruptcy Chrysler brand advertisement here. Noticing any similarities? It seems that there’s trouble brewing in the Fiat family, and “Don” Marchionne has strongly suggested that the new boy to the family, Chrysler, could take over some of Lancia’s profile. Automotive News [sub] reports that the Chrysler brand will appear on Lancias (A.K.A rebadging) in many international markets, and that Lancias could become a niche marque. (Read More…)
Automotive News Europe [sub] reports that Fiat CEO Sergio Marchionne has ordered a strategic review of the Alfa Romeo brand, citing declining sales and mounting losses. Alfa’s sales have fallen from 203,000 units in 2000 to 103,000 last year, and the brand has lost between €200m and €400m in each of the last ten years. According to Marchionne, Fiat’s sporty brand has undergone too many reinventions. “You cannot be a newborn Christian every four years,” he explains. “It’s the same religion, eventually you need to own a religion and carry it to conclusion.” The recent delay of the 147 replacement due to name-related issues was merely the latest trouble for the Alfa brand, which has struggled with aging products and underinvestment. According to Marchionne, Alfa faces two possible futures: retirement or rebirth… on Chrysler platforms?
Alfa Romeo was founded in Milan some 99 years ago, but as a division of Fiat, it’s pulling up its roots to relocate its remaining 232 Milan-based employees (out of 20,000 employed there twenty years ago) to the mothership’s hometown of Turin. CEO Sergio Marchionne explained that the move is strictly business, saving the company costs by consolidating operations, but the move has one minor rub: Alfa had planned to revive the “Milano” nomenclature for its 147 successor. Obviously this proud reference to a local heritage that no longer exists caused a few problems with employees, prompting Fiat to hastily announce a last-minute name change. Rather than Milano, the name Giulietta will be used for the new hatchback. But the last minute irony-avoidance maneuver pushed back the launch of the new Alfa, which was supposed to debut with official images today. As Automotive News [sub] reports, “the decision left some monthly magazines scrambling as they had already received pictures of the car, which was badged the Milano.” Whoops! Time to re-order those decklid badges… unless the decision to go with Giulietta was inspired by the discovery of boxes of unused badging. Fiat made another such last-minute name change in 2003, when the ill-advised name “Gingo” was dropped in favor of “Panda” because its was deemed too similar to Renault’s Twingo.
TTAC did not file a full Chrysler Zombie Watch from the launch of Chrysler’s five year business and product plan, but two major points dominated our coverage. The first was this graph that shows 2009 as a trough year for Chrysler sales, with 2010 heralding a major and sustained turnaround in Chrysler’s fortunes beginning next year. Underlying this rosy projection is the second main point of Chrysler’s turnaround, a product/branding strategy that we summarized as “refresh and market like hell.” But refreshes take time, which is something that Chrysler simply doesn’t have. While the automotive world waits for the crucial Fiat-fettled refreshed Chryslers (due to begin arriving at the end of 2010), the “market like hell” portion of the plan is hitting America’s airwaves first, in the form of new ads aimed at reviving “consideration” of Chrysler’s damaged brands. But now that we’ve seen the opening salvos in this $1.4b war on consumer apathy, it’s becoming clear that Chrysler’s journey (no pun intended) of a thousand miles is beginning with a stumble.
On October 13th of last year, when TTAC’s Bailout Watch clocked in at a mere 115 entries, GM’s then-CEO Rick Wagoner and board members Erskine Bowles and John Bryan approached the Treasury for a “temporary” bailout. Not that we knew it at the time. “In this period of continued uncertainty in the markets, you really can’t rule out anything,” said GM spokesfolks at the time. “Stand by for another big public investment in a failing firm,” warned TTAC. As subsequent events proved, the rush to bailout had already begun. Funny then, that we’re only now learning some of the most crucial details of the chaotic maneuvering of late 2008, thanks to a Detroit News investigation. Though the industry’s disastrous hearings before congress nearly derailed the deal, the initial strategy of approaching the White House would prove to be the key to the eventual bailout. In fact, President Bush was ready to provide $25b to GM, Chrysler, GMAC and Chry-Fi on December 19, only to have talks with the two finance firms break down. Instead, GM and Chrysler were given $9.4b and $4b respectively, with GMAC getting $7b 10 days later and Chrysler receiving $1.5b in January.
Fiat is facing a new distraction. While Sergio Marchionne has worldwide plans with zombie Chrysler, Fiat is facing an insurrection at home. Well, close to home. The German dealer council of Fiat has unanimously decided to sue Fiat Germany.
Two actions by Fiat raised the dealers’ ire: (Read More…)
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