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Chrysler Won’t Add Fiat Brand in U.S., Will Get 500, Alfa Romeo

June 30 Chrysler Group LLC, the automaker run by Fiat SpA, said it won’t bring the Italian company’s namesake brand to the U.S., while selling its partner’s 500 small-car model and Alfa Romeo luxury vehicles.

The U.S. company, owned 20 percent by Fiat, may make the 500 a brand by itself, like Bayerische Motoren Werke AG’s Mini, Gualberto Ranieri, Chrysler’s chief of public relations, said in an interview today. Fiat products to be sold through Chrysler will be limited to the 500 and Alfa Romeo, he said.

Chrysler Group, created June 10 from assets of bankrupt Chrysler LLC with U.S. government financing, is forming its future product plans, including what will be built in North America and at which factories. Sergio Marchionne, who serves as chief executive officer of both Fiat and Chrysler, has said the 500 may be sold in the U.S. by late 2010.

“Their priority has been to restart Alfa in the U.S.,” Jim Hall, principal of 2953 Analytics in Birmingham, Michigan, said of Turin, Italy-based Fiat. “They’ve noticed that Audi has moved up into tier-one pricing along with BMW and Mercedes. They see an opportunity globally to move Alfa to where Audi used to live.”

For Chrysler, taking the Fiat brand off the table lets the Auburn Hills, Michigan-based automaker focus on its existing Chrysler, Dodge and Jeep divisions, Hall said.

Fiat said it stopped selling its namesake brand in the U.S. in 1983 and Alfa Romeo in 1995.

Contributing Technology

The Italian company is contributing technology such as engines and transmissions for Chrysler vehicles. To be allowed to raise its stake in Chrysler to 35 percent, the automaker must sell a car that gets 40 miles per gallon of fuel in the U.S., make a Fiat-based vehicle in the U.S. and use its distribution system to sell Chrysler vehicles in a market outside the U.S.

The company intends to build Alfa Romeo cars in the U.S. to reduce costs, Ranieri said. Other makers of luxury autos produce some models in the U.S., mainly sport-utility vehicles. Alfa Romeo currently doesn’t make any SUVs.

The 500, which would compete in the U.S. with the Mini, may have a strong enough image to be marketed as a brand by itself, Hall said. Fiat sold about 190,000 of the cars globally last year, Lorenzo Sistino, chief of the Italian company’s automobile unit, said in an interview in December.

Chrysler Deputy CEO Jim Press drove onto a stage at the New York International Auto Show in April in a 500, before the agreement with Fiat was complete, and said: “Wouldn’t that make a great new company car?”

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