Saturday, January 24, 2009

500 Reasons to Like the Fiat/Chrysler Merger

There were a few titters from readers (and from me) after the announcement that Fiat was merging with Chrysler, prompting Flint Expat Jim Holbel to point out that Chrysler has just deftly solved its small car problem:
"Fiat will face some brand challenges, but if we hit $4-5/gallon gas, many Americans will be interested in products like the Fiat 500. At $1.60/gallon it looks like bad biz, but this might look like sheer genius in about 2-3 years."
Or even sooner. When gas prices begin their inevitable climb, the 500 (that's pronounced "chin-kwe-chen-to" if you really want to get with the program) will look very appealing. In fact, it looks pretty amazing right now.

The interior of the Fiat 500. (Both photos courtesy of Fiat)

of Tribune Newspapers writes:
"The deal could have obvious upsides for Chrysler, which has a lineup sorely lacking in small cars and a very limited international presence."
And Chrysler's infrastructure offers Fiat an economical way to get back in the U.S. Market.
"After decades selling in the U.S., Fiat abandoned the market in 1984. At the time the brand had a reputation of being unreliable. In the past 25 years, however, Fiat has built upon its strengths in other markets, making it, for example, the largest carmaker by volume in Brazil." Bensinger writes. "Last year the company introduced the Fiat 500, a two-door hatchback designed to compete with BMW's Mini. An instant hit, the 500 won the 2008 European car of the year award, and U.S. fans have been salivating at the thought of driving one."
So Chrysler has made what looks like a good move. Now let's see what G.M. does.

1 comment:

  1. that's interesting. the partnership would make Chrysler boost their market again.


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