Fiat to Own 35% of Chrysler in Return for Small Car Platform
January 19, 2009 by admin
Chrysler and Fiat are joining forces. Chrysler’s majority owner Cerberus will give thirty-five percent of its stake in Chrysler to Fiat. Fiat will will not pay Cerberus any cash in this deal. Instead Fiat will provide its small car platforms, powertrains and other systems to Chrysler with the hope that a small car model range will give it greater sales and profitability.
Fiat will also provide distribution channels in overseas markets for Chrysler-branded vehicles. Chrysler will also get business planning help from Fiat with the hope of moving the viability plan that it must submit to the government forward.
According to the press release, Fiat isn’t committing to provide any ongoing funding for Chrysler, likely because it doesn’t really have any cash. Similarly Fiat could regain some distribution channels and some market share in the US.
Fiat had been considering a North American manufacturing site for Alfa Romeo cars and now it will have access to plenty of Chrysler facilities. For Chrysler, it could use platforms like the Fiat 500 and Punto to create new, efficient small cars.
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