1993 Dodge Ram 2500 on 2040-cars

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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.

Dodge not being dropped by Chrysler, CEO reaffirms

Dodge isn't going anywhere. Despite some rumor and speculation over the future of the crosshair grille and the cars that wear it, Dodge brand boss, Tim Kuniskis, sat down with TheDetroitBureau.com, explaining that the marque isn't going anywhere. His sentiments echo those of SRT boss Ralph Gilles, who told a group of enthusiasts in July that "Dodge is here to stay!"
Dodge's death won't be "a part of a master plan to consolidate brands," Kuniskis told TheDetroitBureau.com. Instead, the brand, which is ultimately under the command of Fiat/Chrysler CEO, Sergio Marchionne, will likely ditch some of its badge-engineered models, like the Dodge Grand Caravan. A more focused Dodge, which was something Gilles has already hinted at, will likely see it exploring areas of the market that haven't been exploited by other Chrysler brands.
Kuniskis, not surprisingly, wasn't willing to delve into any detailed product plans, telling TDB that the size of the brand's lineup "remains to be seen." Regardless of how big the brand actually ends up being (it is presently Chrysler's volume brand - and not by a little), hopefully the statements from Kuniskiss can put the rumors of a Dodge closure to bed.

Gas prices down, 707-hp engine production up... USA!

On Saturday, the United States of America will celebrate its 239th birthday. That means fireworks, barbecues, block parties, and, oh yeah, Hellcat engines and low fuel prices. The most American of (Mexican-built) powerplants, the big, loud, supercharged, 707-horsepower Hemi is slated for yet another production boost to match up with some serious demand, while the dino juice it runs on is cheaper than it's been in over half a decade. The Saltillo, Mexico engine factory already produces some 4,000 Hellcat engines each year – that's in addition to the Tigershark four-cylinder, the 5.7-liter Hemi, and 6.4-liter SRT Hemi V8s – and it's not entirely clear how many more might get added to that total. What we do know, though, is that Fiat Chrysler can't build the engines fast enough. "We're going to build more [Hellcats] for 2016," SRT boss Tim Kuniskis told Automotive News. "It's a small sliver of what we sell, but it really creates a halo for the rest of the lineup. For example, the next highest car, the Scat Pack Challenger, I have essentially a zero-day supply. It's sold out." This bit of good news comes on the back of something equally good – low summer gas prices. According to the US Energy Information Administration, the nationwide average for for "all formulations" of fuel in June sits at $2.885. Ignoring the remarkably low prices we saw in January and February of this year – figures that themselves hadn't been seen since May of 2009 – the national average hasn't sat that low since October 2010. So yes, it's a very a good time to be an American gearhead. News Source: Automotive News - sub. req., US Energy Information AdministrationImage Credit: US EIA Green Plants/Manufacturing Dodge Fuel Efficiency Coupe Performance Sedan dodge challenger srt tim kuniskis dodge charger srt