Late last year I reported in the magazine that the long-trailed co-operation between BMW and Fiat Auto looked like it was fizzling out before it had started.
The scheme had initially been based around the two working on a new small front-drive platform that would underpin the Mk3 Mini and the next Grande Punto.
Fiat is also desperate to enter the North American market, so it was keen to leverage BMW’s expertise in building cars to meet US regulations and even possibly piggyback the BMW Mini dealer network.
It was even suggested that it might try and licence BMW rear-drive platforms for use under future Alfa Romeos.
Well, according to reports from Italy, it looks like Fiat is poised for a major alliance, but this time with ailing Chrysler. Some reports say the alliance is already in the bag; others, that a deal is still to be signed.
Although the exact details are still foggy, it looks like Fiat will initially get a 30 percent plus stake in Chrysler. In exchange, Chrysler will get to use Fiat’s Grand Punto, Bravo and Alfa 159 platforms as the basis for future models.
This could work very neatly. Fiat would have its platforms brought up to future US spec, so, for example, the Chrysler factory building a future 159-based 200C, could also build Alfa’s 159 for sale in the US market through the Chrysler dealer network.
Equally, a European market Chrysler 200C could be built at Alfa’s facility in Italy. The same would apply to the 149 and Punto-sized models. Fiat could also tap in to Chrylser’s crossover technology.
Hang on, though. Chrysler’s a gonner, surely? It has already had a $4bn handout from the government and there’s another $4bn on the way. But Chrysler also has to prove to the US Government by March that it has a viable recovery plan.
This tie-up, while slashing future product development costs, won’t boost current sales, but US legislators could see it as a very positive move.
If, however, Chrysler does slip into ‘Chapter 11’ bankruptcy, Fiat Auto will be on hand to help Cerberus restructure and re-invent the company. So sink or swim, it’s likely the Italians will still end up with their much-desired US beachhead.
Which is why, by my reckoning, Fiat is making its move now. And even better, it probably hasn’t spent a dime.