FIAT Could Help Chrysler With Small Cars
If the proposed alliance between Chrysler and FIAT goes through, the company could produce a total of six new models—ranging in size from small to smaller. The terms of the deal would give the European carmaker a 35 percent stake in Chrysler. In exchange, FIAT’s small car experience could give Chrysler the opportunity to reduce its dependence on larger vehicles.
Chrysler suffered a sales decline steeper than any other automaker in January—down 55 percent from January 2008. The decline spanned most of the lineup, but car sales were hit hardest.
Two of six future vehicles would be from the smallest ‘A’ segment, two from the subcompact ‘B’ segment, and two from the compact ‘C’ segment. The ‘A’ cars are the FIAT 500 retro 3-door liftback, as well as the 5-door liftback version of the FIAT Panda. The car based on the Panda would probably be badged as a Chrysler or Dodge.
In the subcompact category, one of the vehicles could be the Alfa Romeo MiTo—Alfa Romeo is owned by FIAT. The other vehicle is not yet known, but will most likely be placed under the Dodge brand.
A brand new vehicle built on Fiat’s ‘C’ platform could be the replacement for the Dodge Caliber. The Caliber is Chrysler’s only compact car and is currently being redesigned for the next model year. The second C-segment car to be introduced would be the Alfa Romeo 147. It would probably retain its name for the US market.
Even if the deal is finalized by April 30, as planned, it will take at least two years before Fiat cars can be remade into Chrysler models. In the meantime, Chrysler is in survival mode. The company received $4 billion in government loans and hopes to get an additional $3 billion by April. The funds would be used to complete the FIAT deal and to stay in business long enough to make good on its plans for smaller fuel-efficient cars.