The crisis situation in Europe has hit automakers hard. Companies are doing anything and everything to bail themselves out of this situation. Earlier this week, GM and Peugeot, announced an alliance. On the other hand, Ford has shut down few of their plants. Perhaps, the only company to have remained profitable is the Volkswagen group. Fiat’s Chrysler too has shown considerable amounts of profits, not letting down the parent company. The others are making all the strategies to out-compete Volkswagen.
Well, it is now clear that taking this storm all alone is not the best of the solutions. Thus a collective approach is what many of the companies are looking out for. A joint venture will help them to sustain lesser injuries and perhaps help in sharing the pain. Fiat in such a move has approached PSA Peugeot Citroen and General Motors earlier this month to create a pan-European collaboration which could have the potential to push Volkswagen down. This is not the first time, when the Italian car-maker has approached the duo for a sustainable relationship. Earlier this year, the talks did not yield a positive outcome.
As per the new proposal, Fiat is willing to buy Opel from General Motors if they get US $5-7 billion to restructure the German automaker. The approach seems perfect as, if the trio get into an agreement, together they can make up to a market share of 25 percent which is just above the current market share of Volkswagen Group which stands at 24.8 percent. However, it is still a cloudy situation as GM might not accept the proposal because of its past broken relationship with Fiat in the year 2009. Will the companies prefer to sail through the storm all alone or will there be collaboration?
Update – Fiat CEO denies talk was about merger. He says the report is bizarre.
