► Fiat Chrysler seeking big-league partner
► Merger could save $10bn a year
► Ford, Toyota, VW possible, not GM
Fiat Chrysler Automobiles is seeking a merger partner in a bid to secure its long-term future in a move that could save $10 billion a year, according to its chairman.
John Elkann, a member of the Agnelli family that founded Fiat, admitted a merger with one of the industry’s ‘big guys’ was an important objective of FCA as it seeks to shore up its long-term future in a highly disrupted automotive landscape.
‘But you need two to tango, and most of our competitors are busy with the great opportunities that technological disruption has to offer,’ he said in a letter sent to shareholders and seen by Automotive News Europe.
Fiat Chrysler merger: target Toyota, VW or Ford
FCA’s advances have already been shunned by General Motors and CEO Sergio Marchionne has identified the remaining giants of global manufacturing - Toyota Motor Cop, Volkswagen Group or Ford Motor Company - as ideal suitors.
‘The door [on mergers] never closed, the need to consolidate does not go away,’ Marchionne said at the shareholder’s meeting in Amsterdam.
The CEO, whose contract runs until 2018, ruled out a tie-up with Hyundai or Kia, admitting ‘the Koreans don’t get married,’ despite them boasting the size to make interesting economies of scale.
Why FCA wants a merger
Like all car makers, Fiat Chrysler is facing huge costs in improving the technology of its cars as connectivity, autonomous driving and increased competition from new entrants disrupts the automotive sector. Turin believes it will be in a stronger position if it can share those costs with another big player.
Marchionne, 63, is making finding a partner his most important goal before his contract expires in 2018. He’s led Fiat since 2004 and has overseen the introduction of the successful 500 (below), which has gone on to become the lifeblood of the Italian car maker.