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China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.

Fiat reveals new Aegea Project sedan in Istanbul

You'd be forgiven for boiling Fiat down to the 500 and its growing roster of spinoffs, but overseas the Italian brand sells a wide range of models. Like this new sedan, for example. Unveiled today at the Istanbul Motor Show is the Fiat Aegea Project, in reference to the sea on the western shore of Turkey, where FCA operates one of its largest plants. The Fiat Aegea Project has about the same exterior dimensions as a Ford Focus sedan, with room for five and an array of gasoline and diesel engines ranging from 95 horsepower to 120, mated to a manual or automatic transmission. While tacking a trunk on to a hatchback (or carving a notch out of a sport wagon) may be common practice with some of its competitors, the Aegea was designed from the get-go as a three-box sedan, giving it better balanced proportions. Design work was carried out in Italy at the company's Centro Stile, with development undertaken at the Tofas R&D center adjacent to the Bursa plant where it will be built. Though sure to get a different name before it reaches production, the Aegea is slated to go on sale in Turkey this coming November before rolling out to 40 more markets in Europe, the Middle East and Africa. Just don't expect it to see it nestled between a couple of neo-Cinquecentos in showrooms Stateside. Related Video: NEW FIAT AEGEA PROJECT DEBUTS AT ISTANBUL MOTOR SHOW - The new FIAT compact sedan makes its debut today at the Istanbul Motor Show, in recognition of Turkey's strategic importance to FIAT Chrysler Automobiles global operations - Conceived from the outset as a three box sedan, it combines harmonious design with highly efficient use of space - The name of the project – FIAT Aegea Project – also pays tribute to Turkey's pivotal role in its development, manufacture and anticipated success - On sale from November in Turkey, it will gradually reach over 40 countries across Europe, the Middle East and Africa The all-new FIAT compact sedan debuts today at the Istanbul Motor Show. Designed in Italy at the FIAT Chrysler Automobiles Centro Stile, and developed in Turkey together with Tofas R&D, one of FCA's largest research and development centres, the new model will be manufactured in the Bursa plant in Turkey, which has been designated Gold Medal status by World Class Manufacturing in recognition of its efficiency, quality and eco-friendliness.

Marchionne to take his sweater and go home after 2018

The end is in sight for Fiat Chrysler boss Sergio Marchionne, who confirmed in an interview with Bloomberg that once FCA's sweeping five-year plan is completed, he'd be stepping down from his post to "undoubtedly" do something else that didn't involve turning around global corporations. That would mean he should finish up after 2018 if all goes according to plan.
"It's as important to walk away from the table as it is to sit down," Marchionne told Bloomberg.
Marchionne has been at Fiat since June of 2004 and is one of the chief architects behind the Italian company's acquisition of Chrysler. Despite his successes, he does sound quite ready to move beyond the auto industry, rhetorically asking his Bloomberg interviewers if there "are other things I like to do apart from this?"