Fiat and Chrysler Strategic Alliance: Can a European and an American Automaker Dance Together?

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Case Details:

Case Code : BSTR381
Case Length : 23 Pages
Period : 2009-2010
Pub Date : 2010
Teaching Note : Not Available
Organization : Fiat S.p.A. / Chrysler LLC
Industry : Automotive
Countries : Global

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This case study was compiled from published sources, and is intended to be used as a basis for class discussion. It is not intended to illustrate either effective or ineffective handling of a management situation. Nor is it a primary information source.

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Background Note

Fiat, an acronym for Fabbrica Italiana Automobili Torino, was established on July 11, 1899, by Giovanni Agnelli (Giovanni) along with a group of investors. Considered one of the founders of the European automobile industry, Fiat opened its first car manufacturing facility in 1900 in Corso Dante, Italy...

Fiat and Chrysler Joining Forces

On January 20, 2009, as part of its bankruptcy filing, Chrysler announced its plans to establish a global strategic alliance with Fiat. Under the agreement, Fiat would receive a 20% equity stake of Chrysler which could grow to a 35% stake if certain financial and manufacturing goals were met...

Benefits of the Alliance

According to experts, the Fiat/Chrysler alliance would allow the two automakers to share vehicle platforms, distribution channels, and technology and take advantage of each other's distribution networks and global supplier base, thereby saving costs in large volumes...


Some analysts were of the view that the Italian-American merger had little potential to succeed due to the drop in auto sales in the global car market (Refer to Exhibit II for a brief note on the global auto industry)...

The Road Ahead

In the first quarter ended March 31, 2010, Chrysler's net loss declined considerably to US$197 million due to improved operating performance. The company's net revenues increased by 3% to US$ 9,687 million compared to US$ 9,434 million in the fourth quarter of 2009...


Exhibit I: Worldwide Vehicle Sales of Fiat and Chrysler (2003-2008)
Exhibit II: A Brief Note on Global Auto Industry
Exhibit III: Chrysler's Consolidated Statement of Operations
Exhibit IV: Chrysler's Consolidated Statement of Cash Flows
Exhibit V: Fiat's Income Statement


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