Fiat Moves A Gear Up In Global Drive
2009-05-06 Source：internet
Summarize：FIAT Group SpA confirmed on Sunday that it is in talks to buy most of General Motors Corp's European operations, taking another step toward creating a global automotive powerhouse.
Fiat also said i ...
FIAT Group SpA confirmed on Sunday that it is in talks to buy most of General Motors Corp's European operations, taking another step toward creating a global automotive powerhouse.
Fiat also said it is evaluating the possible spin-off of its auto business to form the core of a new company.
Fiat Group Automobiles includes the Fiat, Alfa Romeo and Ferrari brands. In addition, Fiat is in the process of acquiring United States auto maker Chrysler LLC without putting up any cash.
The new auto company, which according to Fiat would have US$105 billion in annual revenue, would put the Italian auto maker in markets where it has little or no presence, including North America, the second largest market in the world.
"They're going to be a global powerhouse, I guess. Who would have thought?" asked Erich Merkle, an independent auto industry analyst in Grand Rapids, Michigan. "They seem to be on a buying binge right now, looking for cheap and distressed assets like Chrysler and Opel."
The Chrysler deal, which must still be approved by a United States bankruptcy court, would be in exchange for giving Chrysler access to Fiat's small-car and engine technology. Chrysler cars and trucks also would be sold by Fiat through its global distribution network.
The deals would make Fiat a big global player, but that might not be the best thing for the Italian auto maker, which might be overreaching with the acquisitions, said Merkle.
"This is a lot to take on, quite honestly," Merkle said. "When you start looking at Chrysler, it'll make them a very large auto maker, but we've seen that large isn't necessarily indicative of success."
It will take years, Merkle said, for Fiat to gain any synergies by globalizing design, engineering and manufacturing operations with Chrysler and the GM units.
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