Chrysler-Fiat Product Sharing Details Emerge
Industry publication Automotive News reported this week on the tentative plans that Chrysler and Fiat have for sharing products in the venture that the companies announced last week. The automakers have a March 31, 2009 deadline for coming to a final agreement, and Fiat CEO Sergio Marchionne visited Chrysler headquarters in Auburn Hills, Michigan today to look over the company that Fiat has agreed to acquire 35% of.
Before the ink was even dry on the “non-binding term sheet” – in fact, when the alliance was reported as “likely” and not a sure thing, my former colleague J.S. Smith walked through some of his ideas about how the Chrysler-Fiat partnership would work. Now, some more concrete details – though still not officially confirmed by the two companies – are starting to emerge. Or to leak, as the case may be.
Overall, Chrysler will sell seven Fiat, Fiat family, or Fiat-engineered vehicles in the US at Chrysler dealerships; the seven vehicles will be built on four different platforms. The likely candidates are mostly small cars; Chrysler has no entry in the B-segment (subcompacts) and only the Caliber, Compass, and Patriot in the larger C-segment (compacts), and needs to boost its CAFE number significantly in coming years, which will be difficult without efficient products in the lineup to offset the 15 mile per gallon Hemis. Here are the plans as reported by Automotive News:
The popular Fiat 500 will be built in Mexico at Chrysler’s plant in Toluca, Mexico and sold in the US, branded as a Fiat. The 500 will offer style on par with what Mini offers, but will likely undercut its price, particularly if it’s built in the NAFTA zone. Also, the next-generation Fiat Panda small car will likely be badged as a Dodge or Chrysler. While the minicars will help Chrysler’s CAFE numbers, I also don’t see them being wildly popular with US buyers who prefer large, powerful vehicles.
Chrysler was already planning to sell a version of the Nissan Versa with Chrysler’s styling (which is hopefully going to start improving; I’m getting more optimistic having seen the 200C concept and the production 2009 Ram) while in turn building the next-generation Titan pickup for Nissan. The plans with Fiat call for selling the quirky and popular MiTo subcompact in the US, while also selling a Dodge- or Chrysler-badged vehicle of similar size but with Chrysler or Dodge styling instead of Alfa Romeo styling. Unless Ralph Gilles quickly finds his mojo again, it’s not hard to guess which of the two cars will be the better looking one.
Chrysler’s current entries in this segment have certainly not met critical acclaim, and aren’t even really cars, per se, with the Jeep Compass ironically being probably the most car-like of the three. For anyone who wants to buy a Chrysler or Dodge compact car without the butched-up styling, they’re out of luck today. However, the replacement for these three vehicles (Caliber, Compass, Patriot – and don’t think for a minute that all of most of those three nameplates will survive into a second generation) will be badged as a Chrysler or Dodge and based on Fiat’s C-Evo platform. Further, Fiat plans to sell its next-generation Alfa 147 compact in the US, and in fact build the car in the US as well.
Chrysler’s vaunted Project D (which was intended as a crash program to replace the rental car favorite Sebring and Avenger) was put on ice after the defection of its leader to Tesla and then the subsequent cash crisis at Chrysler later in 2008. Until the Fiat alliance was announced, Chrysler didn’t seem to have any clue what to do about the Avenger and Sebring problem, with many folks expecting Chrysler to rebadge or rebody a Nissan Altima, which wouldn’t be a bad move at all for Chrysler.
The Fiat alliance, however, likely means that the Sebring/Avenger replacement (and it is almost certain to be a single vehicle this time) will be built on a stretched version of Fiat’s C-Evo platform that’s currently under development. I’m personally not thrilled with this idea, because part of the problem with the Sebring/Avenger twins is that they’re built on an enlarged version of the Caliber’s platform, and a platform cost-engineered for a compact car may not be engineered as well as a dedicated D-segment platform. There are no plans to sell any Fiat group D-segment products in the US at this time.
So basically, around the 2011 model year, Chrysler will transition from three poorly-received compacts and two poorly-received midsize cars to one city car, one subcompact, one compact, and one midsize. There will also be a related Fiat city car (the 500), a related Alfa subcompact (the MiTo), and a related Alfa compact (the 147) sold in the US alongside the Fiat products. By coming online for the 2011 model year, the new small cars should help Chrysler meet more stringent CAFE standards that take effect for that year.
From the above information, it appears that Chrysler is getting the better end of the deal, and they clearly are from a product standpoint. However, Fiat gains re-entry into the US market with minimal (or no) upfront investment and also will probably gain access to Chrysler’s new powerful and fuel efficient Phoenix V6 engine family, while providing Chrysler with access to its small four cylinder engines.
The Fiat alliance may well be the death knell for the independent Chrysler, as Cerberus does everything it can to get the heck out of the automobile business, but at least it gives Chrysler a chance of surviving in some form, even if it’s only a shell of what it used to be. A Chrysler lineup built on Fiat platforms is preferable to a nonexistent Chrysler lineup.