Fiat-Chrysler emulates UK’s auto industry in its recovery plan

Article by Eugene Conan, on March 6, 2014

The Fiat-Chrysler of today sounds like the auto industry in the United Kingdom when it reached a low point in 1982 – weak and aging models, grumpy unions and idle plants. Because of that, Fiat is seeking to replicate the success of the UK auto industry in making a comeback by adopting similar measures implemented by British carmakers.

For instance, Fiat is finally re-launching its Alfa and Maserati marques, with which it has vowed to revive Italian production – trying to achieve what Mini and Jaguar have managed to do under foreign ownership.

The 2014 Geneva Motor Show happening this month may offer early indications of Fiat’s plans as it rolls out a cabriolet version of the Alfa Romeo 4C coupe and the first Italian-made Jeep. Marchionne said in February that Fiat’s site has a bright future building "premium segment, high-quality products with reduced competition, more attentive customers and higher margins."

Like the UK auto industry, which exports 80 percent of its car production, Fiat is also targeting to export its products – a move that could more or less mitigate losses from a six-year slump in its core southern European markets.

Chief executive Sergio Marchionne, however, is facing challenges like a big investment outlay and a hardy Italian business climate as well as heavy unionization among its 62,000- strong workforce. "For a premium brand you need a broad offering of cars, but that's very expensive and takes time," said Commerzbank analyst Sascha Gommel. "I'm not sure Fiat can deliver that." [source: Reuters]

Topics: fiat, chrysler, uk

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