While President Obama was settling in his new place and role as America’s first black President, both Chrysler’s LLC and Fiat’s SPA were busy enhancing the newfound partnership. To say the least, very few saw this alliance in the making. The news caught many people off-guard, especially pertaining to Fiat’s 35% stake, within the struggling Chrysler entity. The latter, owned by Cerberus Capital Management, through the majority share, is portended to have been executed at the best time possible. There were varied opinions that if any of Detroit’s three biggest car makers was to fall, the first would be Chrysler. Thus, the aforementioned alliance provides the latter with a glimmer of hope. For some time as pundits portend, Chrysler’s lack of innovations alluded to the fact that it was merely bidding its time before either government loan capital or creditors came knocking. Government input, ranging at $4 billion, was not enough to extend Chrysler’s long-term recovery prospects, especially informed by the fact that its U.S. line-up production looked more dire than previously thought.
Some of the reasons emanated from its replacement of various models, such as the Neon Compact, with a big off-road vehicle, thereby killing some of its potential areas of growth. The aforementioned alliance, pegged on Chrysler’s survival, as well as Fiat’s existing models, requires further adherence to the existing terms of U.S. emissions and crash regulations. In addition, there is an aspect of each individual company’s approach to its U.S. market, where the latter’s models have been greatly appreciated and desired by America’s population in general (Stoddard, 2013). Towards enhancing Chrysler’s overall outlook, by way of increased product development and sales volumes, there is a need for varying strategic options. These should especially be appropriately grounded for the two entities’ future work collaboration and successful endeavour. Amongst the strategies, through which Chrysler can regain some of its lost market share, would be its (Chrysler’s) revamping of city car production. This is crucial in enabling the entity to jump-start its global sales volumes.
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Fortunate for the car maker is the presence of Fiat’ 500 model, which essentially aspires after BMW’s Mini, and Volkswagen’s New Beetle. Fiat 500 is based on the same concept as its Panda city car. In addition to Fiat’s intended move of marketing the model further, Chrysler’s association with Fiat may prove to be vital in increasing inspiration for varied model production. Conversely, it is Chrysler’s better networked logistical and distribution channels that will provide an easier avenue towards Fiat achieving the twin goals of marketing its 500 Abarth model, as well as its re-launch of the Alfa Romeo within the U.S. By re-launching the aforementioned model, the move would aid Fiat’s re-entry into the American market. Additionally, there would be the likelihood of providing Chrysler with a base upon which it could build low-cost, similar city models, such as the Honda’s Fit and Toyota’s Yaris. However, a place of contention, would be the fact that Fiat shares the 500 model’s platform with the American entity, Ford Motors (Vellequette, 2013).
This is due to the fact that it utilizes the same platform towards producing its latest model, the Ford Ka city car. This would provide stiff competition, due to the latter’s fundamental relations to the U.S. The second strategy would be Fiat’s development of bigger models, as well as engine input in terms of stature and size, especially from its Abarth 500 and Panda models. This would necessitate its rethink of strategic input, as influenced by the Grande Punto hatchback, which previously the entity had been opposed to. This is one of the reasons why the entity had abandoned its American market, and hence the need for re-entry. Due to the prevailing wide range of Multi-jet diesel engines, on offer by Fiat, these are an invaluable asset, especially with regard to its continued attempt at penetrating the flooded European market. Fiat, with its wide array of passenger-car diesel engines, from the 1.3 to the 2.4 litres, would be of invaluable contribution to the enhancement of Chrysler. Chrysler’s utility of these engines would provide it with a niche in better penetrating the European market, especially through their input in Chrysler, Jeep and Dodge models.
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Through the enlargement of their models, especially the Grande Punto, both entities could compete with Opel’s Corsa, VW’S Polo and Ford’s Fiesta (Yanga, 2009). Most optimal would be a five- or three-door Grand Punto, which would enhance sales if modelled in either the Dodge or Chrysler form. Further still, would be Chrysler’s modeling after the American Sedan’s body style, especially as informed by the fact that the majority of Americans have yet to really warm up to various types of hatchbacks. With the prevailing joint venture between the two aforementioned car manufacturers, Fiat’s Linea, as a small family vehicle, would be boosted tremendously, especially via their enhanced logistical capacity. However, the penetration into the American market is prone to fierce competition, especially regarding its mid-size vehicle market arena. Another crucial area of strategic input, would be the two firms’ venture into the minivans and trucks’ market arena.
This is one area where Chrysler would aid Fiat fundamentally, in addition to the latter’s partnership with India’s Tata Motors. This would be achievable especially due to the presence of Chrysler’s wide array of large, heavy-duty pickups, as well as SUVs, within its product portfolio. This is further enhanced by the fact that Chrysler has had expertise, spanning decades, within America’s minivan market. A case in point would be the recent introduction of the Fiat Qubo, which is a funky-looking, small multi-purposed van. Other vans associated with Fiat, i.e. its Doblo and Multipla, would be fundamentally enhanced through the utility of various parts and bits, derived from Chrysler’s modernized minivan product category (Kurczewski, 2009). This is especially with regard to the lowering of production costs, when redesigning these models. With the 50/50 venture between Tata Motors and Fiat, through the newly set up Ranhangaon factory, Chrysler’s engineering capabilities can enhance Fiat’s and Tata’s fortunes for the better.
This is further enhanced by the fact that Chrysler already has an agreement with Tata towards building electric-powered versions of its (Tata’s) Ace model. This is a small commercial model, which is primarily targeted for the American market arena. Future prospects also do exist, whereby Chrysler’s big truck technological input, could enhance Tata’s Grande Sumo, or the Safari SUV. Other areas of potential enhancement, in relation to the aforementioned cooperation, would be strategic cost-cutting measures, as well as clever parts-sharing with Fiat’s other dominant sports-luxury brands, such as the Alfa Romeo and Maserati. From all the aforementioned, the future looks bright for both parties, especially if their interrelation continues through technological input, parts conceptualization and adaptation, as well as inter-logistical enhancement. The American market, just as its European counterpart, is ready for new models, as well as revamped ones, which provide wide ranging services, tastes and liking within the existing consumer-base (Connor, 2009).
In conclusion, with Fiat being amongst Europe’s 10 best selling brands, its alliance with Chrysler is fundamentally based on the core issue of environmental safety and sustainability. This is informed by Fiat’s production of vehicles emitting the lowest levels of CO2. In addition, Fiat sales are large from its A to C-segment vehicles, which fundamentally entail the vehicle models Chrysler aspires to gain through this partnership. It can be summed up that the future looks bright for both vehicle manufacturers, as well as Tata’s by extension, due to the prevailing relational aspects.
