Coming to the USA

The American auto manufacturing companies have continued to stand under the scrutinizing spotlight of media attention since the government issued the bailout “loans.” Government Motors is scrambling to shave some weight from their oppressive cost structure and prove their sustainability. All the while, the media all but deifies Ford for their pass on free taxpayer money. Despite all this attention on Ford and GM, Chrysler just drifts in and out of the headlines. As many of you are aware, Fiat bargained for a portion of Chrysler, rescuing them from bankruptcy and hopefully breathing some new life into both companies.

With all this impending change, I thought it appropriate to expose some of the background on this Italian auto manufacturer and venture to guess what we might expect to see coming from both Chrysler and the family of Fiat brands.

Continue reading after the jump!

Thanks to Fiat.Com and Alfa Romeo.Com for the Photos!

Founded in 1899, Fiat tried its hand at several industries over its long history. Those businesses include military vehicles, construction equipment, aircraft and motorcycles. Also, like other long-time car companies, Fiat is a conglomerate that has accumulated several brands sold under its ownership. Fiat brands include Fiat, Alfa Romeo, Ferrari, Maserati and Lancia. Fiat also has a performance division called Abarth that functions much like SVT to Ford or NISMO to Nissan.

Inheriting a falling company like Chrysler right now seems to be a long shot gamble. The payout could be incredible but it is going to take some sharp strategy. Chrysler’s sales are down 40 percent from last years numbers, which was also an unprofitable year. Leveraging Chrysler and Fiat assets together could be a recipe for success. However, many said that about Mercedes Benz’s involvement with Chrysler as well, and that was short-lived and largely unsuccessful.

Comparing the resumes of American Chrysler Corporation and Italian Fiat in regards to strong product offerings, the match has the potential to be perfect. Chrysler has significant offerings in the larger vehicle segment with Ram, Dakota, Caravan and the Jeep brand. Fiat has the balancing end of the product line with small fuel efficient cars such as the Fiat 500 or Punto Evo.

Fiat Punto Evo

Although Charger, Challenger and Viper are morale and brand-equity building monsters, none of them are sales heroes. Despite Avenger and Sebring’s reasonable mileage in base trim levels, the Caliber was disappointingly unimpressive in the fuel mileage category and seems much bulkier than the agile Neon it replaced. Chryslers current portfolio of offerings in the car segment certainly warrants aid.

Although CEO Sergio Marchionne won’t release official joint product strategy outlines until November, it seems as though a lot is rests on Fiat, as the Chrysler brand hesitates to move ahead on new vehicle rollouts with the exception of Jeep. It is still unclear if new Chrysler vehicles will be joint engineering project creations, rebadged Fiats, or unchanged Fiats. The only existing vehicle I know confirmed to come to the States is the Fiat 500, a small fuel efficient car to compete in the segment with the Mini Cooper and the VW New Beetle. Despite the Mini’s seemingly impractical two door trim and small (for American standards) size, its fuel efficiency and uncompromised performance produced strong sales through the economic recession. It is on this playing field that the Fiat 500 would compete, and likely gain market share from Mini, if marketed successfully.

Fiat 500

Alfa Romeo, Fiat’s more sports car-minded brand, may also make its way to the states. With the popularity among enthusiasts of the VW GTI, Mazdaspeed 3, and Subaru WRX hatchback, all driver-oriented hatchbacks, the American consumer may also be in a very receiving position for another European hatch-rocket like a 147. By my estimation, should Alfa Romeo become successful in the States, we might see a few of the hotter high-end sports car offerings like the 8C in addition to the performance-minded commuters.

Alfa Rome 147

Alfa Romeo 8C

Another growing segment in the U.S. auto market is the turbo-diesel’s role in the alternative fuel trend. Diesels are 30-40 percent more efficient than a gas engine of the same proportions, and have been gaining significant traction in sales in North America. Diesel has long been very common in Europe and other markets where Fiats are sold, and Fiat has become proficient with diesel technology. With performance oriented configuration and turbo diesel fuel economy, Alfa Romeo or Fiat might be in a position to gain some significant market share, if executed wisely. That would mean also that TDI Jetta, and gas Mini Cooper would see some competition in segments largely unanswered at this time.
  In summary, Sergio Marchionne has a long road ahead to solve the sales issues and stagnant product lines of sinking USS Chrysler, but Fiat and its family of brands have a lot to offer to the consumer, car enthusiast or not. Despite the pessimism I once felt about Chrysler’s fate, my hope is that the mixed joint product offering will bring strength across the board and Chrysler/Fiat will both be better for it, as we the American consumer benefit as well. I can’t wait to personally slide behind the wheel of a turbo diesel Alfa Romeo and I hope that many share my enthusiasm.