"We're not just talking with Daimler about engines, we're talking about everything," Marchionne told reporters.
In June Sergio Marchionne, chief executive of Fiat Auto, signed a 2.4-billion Euro deal to supply Daimler with truck engines. Now he says that his company is bunkered down with the boys from Mercedes looking at how the two companies can further work together.
On one hand it shows the exceptional resurgence of a company that had a near-death experience a few years ago. On the other hand, it’s also a total mystery. Because why does Mercedes – having just untangled itself from a disastrous 10-year marriage with Chrysler – want to get back in the dating game with a volume car-maker?
We know that Mercedes cannot make decent profits from its uniquely engineered A- and B-class cars. The car’s tilted drivetrains are especially expensive to build. Buying Fiat engines – which are well regarded – makes sense. But taking the next step and perhaps sharing the next-generation Fiat Grande Punto platform looks like a risky step. The average punter would soon get the message that the new family of baby Mercs ‘are just Fiats underneath’.
Then again, what about Smart? Currently a one-horse brand, it had been saved from the crusher by Mercedes after running up horrendous losses since it was launched in 1998. Co-operating with Fiat to re-build what could still be a successful global brand would make more sense. And Mercedes needs to sell lots of low CO2 cars to help offset its production of high CO2 cars.
But the real story behind the quote is Fiat’s rapid transit from intensive care to intensive negotiations. Ford came to Turin to borrow the Fiat Panda chassis (and Panda factory) to underpin its new Ka. If Indian conglomerate TATA succeeds in buying Land Rover and Jaguar, Fiat has already stated publicly that it will provide ‘technical assistance’. And now the mighty Three-Pointed Star has come calling. It’s a truly extraordinary story.