Fiat will share the three platforms it uses for the Panda, Punto and Bravo with Chrysler and could get access to Jeep as part of the deal between the two companies announced last week.
The scheme should massively boost the volumes of Fiat’s three front-drive platforms, potentially hugely improving profitability.
A Fiat source also told Autocar that Fiat was keen to ‘leverage the Jeep brand internationally’. Fiat has long sought to entry the crossover and SUV market, and actually considered buying Land Rover from Ford.
Fiat said the deal would establish a “global strategic alliance” and would be a “key element of Chrysler’s viability plan”, although Fiat is not making any cash investment in Chrysler and will not pay for any new model funding.
One of the main benefits of providing Chrysler with the technology to build new families of more fuel-efficient cars is that Fiat will be able to increase the number of cars that use its current platforms.
Last year, Fiat boss Sergio Marchionne said that he did not think any mass manufacturer could make a profit unless they had annual volumes of 5.5 million cars. In 2007 Fiat and Chrysler built around 5.4 million cars between them.
Fiat will also get access to the North American market through Chrysler’s 3327 dealers, enabling it to launch the 500 in the US.
Chrysler still has to prove to the US government by March at the latest, however, that it has a turnaround plan that will make it a viable long-term concern.
Fiat sources said that when Chrysler appears before the US Congress in the next few weeks to discuss the injections of taxpayer’s cash, the technology transfer from Fiat will be the main plank of the company’s plan.
By using versions of the future Fiat Panda, Punto and Bravo platforms, Chrysler will be able to build a new family of smaller, more fuel-efficient cars. Such moves are strongly in-line with the environmental policies of the new Obama government.
Once the legislative hurdles are dealt with, the deal is expected to go through by April.