The Fiat 500 will be sold via select Chrysler dealerships.

Joined at the hip with Fiat AG, the Chrysler Group, LLC has the responsibility for marketing Fiat products in America including the popular Fiat 500 subcompact scheduled to show up stateside before the year is out.

Fiat Experience

But Chrysler has more than enough Chrysler dealers to handle these cars and will be limiting who sells these vehicles. On August 30, Chrysler will be holding and event — Fiat Experience — to outline its Fiat plans with about 600 invited Chrysler dealers. Those dealers, from 41 states and 119 markets will be learn about Chrysler’s plans and be able to apply for the rights to sell Fiats in September with Chrysler deciding by early October who will market the brand.

Even though there are just a few months between dealer acceptance and product launch, Chrysler will not allow dealers to show the Fiat 500 next to Chrysler products with the expectation that as the brand grows dedicated space for Fiat products will be developed.

“The requirements for Fiat are straightforward: separate sales and display at launch, transitioning to a full dealership facility as the volume grows,” said Peter Grady, Chrysler Group’s Vice President of Network Development and Fleet. “Our goal is to establish a retail network appropriately sized to serve the market opportunity.”

No Market

Alaska, Vermont, New Hampshire, South Carolina and the Dakotas are states who will not see Fiat dealerships, at least from the onset. However, with Chrysler actively looking at large metro areas for Fiat, Charlotte covers much of South Carolina while Vermont Fiat lovers can travel to Springfield, MA if they want their Italian ride.

The first Fiat 500 models to be sold stateside are the hatchback, built at Chrysler’s Toluca, Mexico facility. Follow up models will include a convertible and four-door hatchback.

Alfa Romeo

Motor Trends reports that winning Chrysler dealerships may also get the chance to sell the Alfa Romeo brand when it hits the market in 2012 or they may get additional Fiat models if the brand catches on.

In any case, dealers will at least have the Fiat 500 to sell regardless of how things shake out over the coming years, a boutique car some have compared to the MINI Cooper and Volkswagen Beetle, at least in visual appeal.

Invited Chrysler dealers were notified by email on Monday. The invitation came from Grady and Laura Soave, Head of Fiat North America.

Source and Photo: Chrysler Group, LLC

Members of the Club Fiat-Lancia Unlimited gathered in Asheville, North Carolina, recently for their annual convention. That important event allows Fiat and Lancia enthusiasts to come together in honor of their favorite automotive brands for four days, with this year’s convention held from July 8-11.

Fiat Freakout

Fiat North America Head, Laura Soave

The 2010 edition of “Fiat Freakout” received top backing from Fiat North America, whose presence in North America is about to be raised considerably. Indeed, in honor of the pending return of the Fiat brand, Laura Soave, Head of Fiat North America, made an appearance at the closing dinner, and offered an important announcement.

Soave announced that Fiat enthusiasts will be given a unique opportunity to purchase one of the first Fiat 500 models being made available for sale later this year. Said Soave, “The Fiat Cinquecento Prima Edizione was developed especially with the Fiat fans in mind. For over a quarter of a century, the members of this Club have kept the spirit of the Fiat and Lancia brands alive in North America through their unique and passionate support for true Italian design. We really value their loyalty, and the Prima Edizione is our gift of appreciation to these fans on behalf of Fiat North America.”

Just 500 of the first edition Fiat 500s will be made.

First Edition

Details of the special edition Fiat 500 First Edition were announced including three color schemes: Bianco (White), Rosso (Red) and Grigio (Gray). These first edition Fiat 500 models will be outfitted with a 1.4-liter engined paired with a manual transmission and include Prima Edizione badge. Just 500 Prima Edizione vehicles will be made and each one will feature a sequential VIN and badge according to production order.

If you weren’t at the convention and are a Fiat enthusiast, take heart: the Italian automaker has set up a special website to take your Prima Edizione order too at Ciao Fiat. At the moment a mailing list is being created, but you may be able to qualify for one of the first edition models if you take action immediatamente.

Soave Appeal

Incidentally, expect to see Soave’s face front and center in the months ahead. Appointed to her position in March 2010, the University of Detroit grad is working side by side with Chrysler Group, LLC executives to bring the Fiat 500 to market. Soave previously had stints with General Motors, the Ford Motor Company and the Volkswagen Group.

When Nissan and Chrysler began to make agreements with each other early on in 2008, I thought that their pending arrangements would be good for both companies. Taking Japan’s #3 automaker and putting it with America’s #3 automaker in order to build or share select models and parts seemed like a good idea to me. With Nissan being part of the Renault-Nissan juggernaut and Chrysler freed up from its awful relationship with Daimler, the move was well timed too.

The Ties That Unbind

Fast forward a full year and the global automotive landscape has changed sharply. Suddenly, China is the largest car market in the world, GM and Chrysler have been ushered through bankruptcy, Tata Motors now owns Jaguar and LandRover, while Mahindra & Mahindra will soon be selling its vehicle in the US market. Oh, by the way, Fiat now controls Chrysler which is yet another significant change.

The Nissan-Chrysler partnership came about shortly after Cerberus Capital Management, LP wrested control of Chrysler from Daimler in late 2007. By Spring 2008, the first product tie-ins between Nissan and Chrysler were announced and included the following arrangements:

• Nissan agreed to build a small car for Chrysler which was to be sold throughout much of Latin America. That model, supposedly a compact, would have helped Chrysler expand its reach in a booming, yet competitive market.

• Nissan agreed to supply the platform and quite possibly the entire body which was to replace the midsize Dodge Avenger and Chrysler Sebring sedans. That car was to be built at a Tennessee factory by Nissan for Chrysler.

• Chrysler agreed to supply the truck platform expected to underpin the next generation Nissan Titan, the automaker’s full sized truck. Based on the Ram platform, Nissan would use many Dodge components and quite possibly become the basis for the next generation Armada (big SUV).

Don’t Count Everything Dead Yet

The first two agreements are dead for the simple reason that Fiat will supply everything that Chrysler lacks going forward. However, the Dodge Ram-Nissan Titan deal could still come through especially since that plan wasn’t expected to begin until 2011.

Volume for the Titan is considered to be too low to justify making an all new model, thus Nissan will likely still need a partner or kill the model which is something the automaker insists won’t happen. Chrysler is the logical choice, so don’t kill this partnership off completely. At least just not yet.

Source: The Detroit News

See Also — Nissan, Chrysler Fuse Partnership

Even as Marchionne was busy negotiating his deal for Chrysler, he put in a play for GM’s Opel unit although no money was being offered for that bid either. Last week, Fiat announced that it gained a toehold in China having come to terms with Guangzhou Automobile Group to establish a joint venture there. The newly formed entity will begin to build cars starting in May 2011.

Paying Money For Its China Venture

Unlike the Chrysler deal, Fiat will be ponying up some 400 million euros as part of its China investment. Once it is up and running, the plant will have the capacity to build 140,000 vehicles annually which can then be expanded to 250,000 vehicles if needed. The Changsha factory will build a C-segment Linea sedan (pictured) powered by 1.4L I4 engines yielding 120 hp and 150 hp respectively.

Up until now, Fiat had been shut out of the fastest growing automotive market in the world. The Guangzhou Automotive Group is already experienced working with ‘foreign’ manufacturers as it currently partners with both Toyota and Honda to turn out cars at other factories.

Marchionne Continues To Work Toward His Selling Threshold

Last fall, Marchionne made the statement that car manufacturers needed to produce a minimum of 5.5 million vehicles annually in order to be profitable. At that time Fiat was building just over 2 million vehicles annually which meant that Fiat was looking to partner with or acquire other manufacturers to help it reach that threshold. With Chrysler in the fold, a plant coming online in China and other alliances possible, Fiat could soon reach its goal whether additional money is put on the table or not.

When Fiat SpA announced that the Italian automaker was interested in acquiring Chrysler, the company made it known that the Fiat 500 would be one among several Fiat models which would be sold in Chrysler, Jeep and Dodge showrooms. Indeed, the selling point that Fiat chairman Sergio Marchionne made on behalf of his company acquiring Chrysler LLC is that the automaker already had a small car portfolio in place that could fill gaps in Chrysler’s mostly mid to large sized car, truck and minivan line up. By taking existing Fiat models and building them in North American factories as Chrysler, Jeep and Dodge models, suddenly America’s third largest automaker would have a full product line in its bid to compete with everyone else.

Fiat 500 Sold With Its Name Retained

Fiat announced on Monday, following a judge’s decision to sell Chrysler’s assets to that company, that the Fiat 500 would be in US showrooms within the next one and one-half years (December 2010). But, the car will retain its Fiat 500 designation – the only Fiat model to do so – carrying a similar distinction as BMW’s MINI line, itself a highly popular and stylish subcompact. Fiat believes that the 500 will have strong coastal US appeal and be perceived as a boutique car stateside.

Chrysler will get as many as six additional car lines based on Fiat platforms, but those cars will be unique to Chrysler and designed for the North American market. For example, the Fiat Bravo is a compact car slightly larger than the 500, but it won’t be sold in the US. Its platform and perhaps some important parts and components (engine, transmission, etc.) may find their way into a similarly sized Chrysler product, but whatever is built for North America will be designed by Chrysler’s own design team and be sold as a Chrysler or Dodge (probably not Jeep).

There are a few more hurdles for Chrysler to climb before it can be sold off to Fiat. An Indiana pensioners fund is objecting to the sale and there is plenty of heartburn among the Chrysler dealer network which could force some changes. However, given that no one else wants to deal with Chrysler, Fiat’s quest to secure the company is nearly a done deal.

Source: Automotive News

See Also — Fiat 500 Cabriolet Bedazzles Geneva

Thirty Days Has Chrysler, Sixty For GM

When President Obama announced on Monday that GM had 60 days to restructure, he gave Chrysler half that time to seek an alliance with Fiat or else. Clearly, the administration believes GM can be saved while Chrysler’s fortunes will be tied to another manufacturer.

But what if Fiat decides it doesn’t want Chrysler?

Soon after the president finished speaking, Chrysler LLC announced that it had struck a deal with Fiat sPa, a stunning announcement given how close it was to the Obama news conference. Twitter was lit up with comments with Ask Patty (among others) tweeting (sharing) the good news.

Within a few hours, Chrysler amended its announcement by saying that the company had reached a “framework” for an accord, an odd but necessary way to retract what was originally distributed.

Liquidating Chrysler LLC

If Fiat decides for whatever reason (and I can think of some good ones) to break off its talks with Chrysler, then expect the automaker to enter into bankruptcy ASAP. Unfortunately, this won’t be Chapter 11 bankruptcy which is for restructuring the company, rather it’ll be Chapter 7 which will liquidate Chrysler.

In effect, Chrysler would be out of business.

I would like to believe that while Chrysler is the process of being liquidated that they’ll still be able to emerge in some fashion on the other side. But, a lot of people have a stake in the automaker including retirees and workers whose healthcare benefits  and other legacy costs need to be met unless a judge rules otherwise. Several communities across the midwest will be devastated if Chrysler dies, with Ontario getting whacked as well.

President Obama indicated that proceeding through bankruptcy would be swift work, but as a Wall Street Journal article asserts, the process isn’t an easy one with Rep. John D. Dingell (D-MI), a former bankruptcy lawyer stating,  ”I have some concern that if these companies get into bankruptcy, how do they get out? I’m an old bankruptcy lawyer, and bankruptcies have a life of their own.”

The federal government has already told Fiat that their initial share in Chrysler will be closer to 20% which is much lower than the 35% originally agreed upon. Cerberus Capital Management, LP will forfeit its ownership of Chrysler in exchange for continued federal funding while Daimler AG is still trying to shop its 19.9% stake in Chrysler LLC.

Back To Breaking Up Chrysler

If a rosier liquidation scenario unfolds, Chrysler could fetch some big bucks for a its many different parts, perhaps much more than what it would get if sold as one unit.

In healthier days I would have said that Jeep would have gone to either General Motors or Ford, but the former is absolutely broke while the latter doesn’t want to ruin its own recovery efforts.

I like to think that in a certain Dearborn boardroom the Jeep idea was considered and quickly dismissed, seeing that Ford could emerge from the current economic slump in good shape with no need to acquire Jeep. Besides, Ford is in the selling mood themselves, actively shopping Volvo as of this writing.

The Dodge Viper will be picked up by someone, somewhere as it is a good niche vehicle for any fleet. Perhaps the Dodge Challenger could be added to that deal, giving Mopar’s pony car a fresh lease on life.

The Dodge Ram is a capable and very good selling pickup truck with a diesel engine option, excellent storage space and a top notch reputation.  Nissan’s Titan hasn’t performed all that well and the Japanese automaker has an agreement in place with Chrysler LLC whereby the Dodge platform will underpin the next generation Titan model. Sounds like the Dodge Ram could be rechristened the Nissan Titan in the near future.

For the past twenty-five years, Chrysler’s fortunes have ebbed and flowed, but its line of minivans has stood tall. Even as GM and Ford exited the segment, Chrysler LLC has stayed put, fending off Toyota and Honda whose minivans surpass the Chrysler twins (Chrysler Town & Country and Dodge Grand Caravan) in quality but not in sales.  Personally, I would love to see GM or Ford snap up the minivans, but I doubt that  it’ll happen for the same reasons why Jeep won’t be absorbed.

Fiat, Give Us Some Italian Romancing

Beyond that, there isn’t much that anyone will want of Chrysler besides a few decent factories. I would hate to see all of this stuff sold to China, but given that liquidation can take any form that it wants, anything is possible.

Let’s hope that Fiat goes through with its Chrysler alliance, a last gasp effort for a historic automaker.

Further Reading: Chrysler Takes Tough Stance With CAW

No, not in the case of repairing Fiat cars, but in helping to bring Chrysler back from the brink.

Sergio Marchionne, the CEO of Fiat S.p.A., the builder of Fiat, Lancia, Alfa Romeo, Maserati and Ferrari vehicles (listed from worst to best)
got his chance last week to pitch his proposal of a Fiat-Chrysler alliance to the Obama administration, imparting four important words to DC politicos: We can add value.

Big Meeting With DC Brass

According to the Detroit Free Press, Marchionne’s 2 1/2 hour meeting with the Treasury Department’s automotive panel (who holds the purse strings for Chrysler and GM) was Fiat’s chance to convince the feds that his company was “the one” to help rescue Chrysler. Marchionne explained that value is “…the real issue and it’s a necessary ingredient of the revival of Chrysler.”

Chrysler still wants federal financial assistance as it pursues its alliance with Fiat. A major part of that deal has Fiat providing Chrysler with a wide swath of fuel-efficient small and medium cars, two particularly weak areas for the company. In addition, Chrysler would gain access to a number of foreign markets via Fiat.

Chrysler Goes Foreign…Again!

Fiat would gain a 35% share in Chrysler without having to pay a penny. That arrangement has some politicians concerned because it would once again shift Chrysler’s control into foreign hands. Coupled with Daimler AG’s 19.9% share, foreign automakers would control 54.9% of Chrysler. The remaining 45.1% belongs to Cerberus minus the federal government’s stake in the business.

Marchionne has been seeking to gain entrance in the US market for Fiat and Alfa Romeo, two brands that were at one time sold in North America. Maserati and Ferrari have a presence here, while Lancia doesn’t.  The popular Fiat 500 would most likely be one of several Fiat models sold here, possibly under the Dodge umbrella.

Last year, Marchionne said that he foresaw the day when just six car companies would be large enough to survive for the long haul, each needing to produce a minimum of 5.5 million units annually in order to be profitable.

Introduced at the Geneva Motor Show, the Fiat 500 cabriolet is an eye catcher, just the sort of model needed to build on the success of the widely popular 500 line.

I don’t report all that often on cars sold around the world that aren’t also available in North America. Given that the overwhelming majority of The Auto Writer readership is from the United States and Canada, why tease people with what may never be?

But, I know my readers like to follow the trends as what happens elsewhere may set the tone for what we’ll see in a few years here. One example of this is the Fiat 500, a subcompact car from the Italian automaker which was overhauled for the 2008 model year. This top selling model is a good entry point for the Fiat brand and may find its way across the Atlantic if Fiat and Chrysler are able to forge an alliance.

What’s Playing In Geneva?

At the Geneva Motor Show, Fiat rolled out a cabriolet version of the 500 and it is a nice looking car at that. Fiat says that the fabric roof is available in three colors (ivory, red and black) and includes a glass rear screen and high, center-mounted tail light.

In addition, Fiat developed two new paint colors for the cabriolet model only — Brilliant Pearl Red and Warm Grey. The latter color Fiat says is typical of sports supercars — did they have Ferrari in mind when developing this color?

Engine choices include a 1.2L and 1.4L gas motor as well as a 1.3L TDI version. Should the 500 eventually be sold in North America, I can’t see anything but the 1.4L being the base engine here. All engines are paired with a standard five-speed manual transmission which shuts down the engine when the car is in idle, such as when in traffic.

Stylish Roofline Hearkens Back to the 1960s

Back to the roof line — Fiat fans who are familiar with the original 500 will see a styling cue straight out of the 1960s — a full length roof. Electrically operated, the roof recedes much in the same way that the cabriolet Smart ForTwo roof does.

Source: Geneva Motor Show

Europe's 2008 Car of the Year award went to the pictured Fiat 500. Fiat, which hasn't sold a car in the United States in 25 years, could gain entrance to the domestic market by forging a partnership with Chrysler. Whatever you think of this arrangement, I see the federal government backing a Fiat-Chrysler partnership as one way to save jobs at least for the short term.

Fiat & Chrysler — Let’s Get Hitched!

News reverberating throughout the automotive industry yesterday that Fiat and Chrysler are in talks to forge a partnership has received a mixture of responses. Some have applauded the move, others were skeptical, while still others mocked that possibility; the latter group suggesting that taking two troubled automakers and putting them together would never work.

Regardless of the opinions of others, Chrysler and Fiat are in a position where they need outside assistance, as that may be their only chance of surviving for the long haul. Unlike Ford and General Motors who can both tap their vast international resources to bring in fresh products stateside, Chrysler is 90% dependent on the domestic (USA and Canada) markets for its profits.

Fiat, while not currently in as precarious of a position as Chrysler, sees the writing on the wall and knows that it, too, must find ways to work with other car companies.

Not Enough Small Cars

A quick examination of the Chrysler product line shows the automaker top heavy in big trucks, sport/utility vehicles and larger cars, with very few models able to reach a minimum 30 mpg highway. Ford, GM and others have a number of models on their way which will top 40 mpg highway, a number that will likely become of great importance when gas prices rise as expected later this year.

Last month, Fiat CEO Sergio Marchionne opined that the global auto industry was going through a period of consolidation, one where just six car companies and/or partnerships would be left standing. He made it clear that Fiat would not be able to continue business as usual and was seeking alliances or partnerships to help see them through. Marchionne used an annual production benchmark of 5.5 million units as what would be needed to keep a car manufacturer viable.

Fiat, Ferrari, Lancia and Alfa Romeo

Fiat which is an acronym for Fabbrica Italiana Automobili Torino or Italian Automobile Factory of Turin, produces a wide variety of cars from the mass produced Fiat to specialty and sport models including the Ferrari, Lancia and Alfa Romeo. Fiat had said previously that they wanted to re-enter the US market, abandoned a quarter a century ago, to market Alfa Romeos and select Fiat models. By hooking up with Chrysler, those odds increase.

Chrysler’s near absence in the small car segment could present a wonderful opportunity for Fiat to fill that void with its own products. Some have speculated that Fiat would give Chrysler the rights to build their models based on Fiat platforms in exchange for opening up the Chrysler, Jeep and Dodge dealer network to sell Alfa Romeos and other products. Fiat might also take a financial stake in Chrysler, perhaps buying out Daimler AG’s 19.9% minority share.

Fiat could also gain use of under utilized Chrysler factory space to build its popular Fiat 500 subcompact, a vehicle they would be loathe to import given the unfavorable exchange rate between Europe and the United States. With a ready supply of workers available across the Chrysler factory network, the transition for Fiat could be a quick one, especially if the United Auto Workers understands that this will be the only way that worker jobs can be preserved.

Government Aid Would Pull This One Off

Likely, one big supporter of a Fiat-Chrysler liaison would be the federal government of the United States. Fresh off of lending Chrysler four billion dollars in December, the feds are getting ready to extend an additional three billion to Chrysler later this month.

One of the conditions of the loan money is that Chrysler must restructure and prove that they will have a viable operation going forward.  With an agreement in place with Fiat, Chrysler can “prove” to the government that they have a long term plan in place, one that could lead to additional federal support to see it through.

Federal Government Sanctioned Partnership?

In other words, a government sanctioned partnership with Fiat would quickly pave the way for the two automakers to hook up, a deal that could be finalized by the second quarter of 2009.

Do I see this partnership working? Yes, at least for the short term. Fiat would regain access to the US market while Chrysler would suddenly have in its possession the Fiat 500 and other small car platforms which would help the company become competitive again.

In addition, with Fiat’s strong presence in South America, Chrysler could find a market for some of its vehicles there, helping America’s most troubled automaker diversify its business internationally.

Finally, having access to Alfa Romeo models including the 8C Competizione would be a dream come true for Italian car enthusiasts, who have access to Ferrari but might be looking for other cars in the Fiat Group portfolio.

The pundits and prognosticators have been weighing in these past several weeks regarding the state of the American auto industry. Some comments are pure comedy, others an outright tragedy, with a bunch of comments being a mixture of both. Needless to say that the demise of our auto industry isn’t something I relish even if I believe that much of the blame for failure rests on the shoulders of management and unions.

Looking beyond our borders, it isn’t difficult to see that the global auto industry is going through some tough times too. So much so, that the CEO of Fiat – Sergio Marchionne (pictured) – predicts that once this global crisis passes, that there will be just six major players left standing.

Sure, several of the niche players including Fisker and Tesla, and the like may survive on their own, perhaps even thrive, but when it comes to big volume players then Marchionne only sees six survivors, each with the need to make at least 5.5 million cars annually in order to be profitable.

Presently, five automakers hit that threshold including Toyota, General Motors, Volkswagen, Ford, and Renault-Nissan. But, Marchionne is suggesting that the six remaining players will be just one American company, one German automaker, one French-Japanese (which would be Renault-Nissan), a Chinese company, just one in Japan, and some other European player.

Deducing from what he is saying it appears that some sort of GM-Ford-Chrysler company would emerge, that Volkwagen would be that German company, and the combined Chinese automotive production empire would emerge as one player (Brilliance/Chery/Changfeng et al). Since Toyota is already tops in Japan then they are the logical survivor there with the aforementioned Japan-French hybrid being Carlos Ghosn’s Nissan-Renault. That just leaves one other European player — could Mr. Marchionne be thinking it would be BMW/Mercedes who would snap up Fiat (he wishes), Peugeot, Volvo, Saab, and whatever other smaller companies are available?

Six automakers sounds like too few companies, especially in the short term. The Hyundai Kia Automotive group produces just over four million vehicles annually, while Honda is just behind that number. What about Tata Motors? Sure, they’re not much of a presence yet, but with the Indian market set to take off, sales could explode within a few years time. Yes, the Japan government could push all of its smaller automakers into Toyota or Honda’s fold, turning nine Japanese companies into the Big 2.5.

For its part, Fiat won’t be a survivor because 1.7 million units is about 30% of the annual production minimum based on what Mr. Marchionne is suggesting. Naturally, Ferrari and Alfa Romeo will live on in some form, but will the bland Fiat name survive beyond 2015? Probably not but neither will Proton, GAZ, Mahindra, UAZ and other names that most Americans aren’t familiar with.

What could be the biggest benefit of fewer players? Better made cars costing less money. With hundreds of millions even a billion or more dollars invested in bringing out new models, automakers can share platforms over many different brands that they control without “reinventing the wheel” each time. Then again we already have a term for this type of practice: badge engineering.

(Source: Reuters)