Fiat and Chrysler join forces

May 1 2009

Car manufacturing giants FIAT and Chrysler have agreed a deal that will see the two firms working together in future.

Following major restructuring work within the Chrysler brand, the company has struck an agreement in principle that will see it establish a global strategic alliance with Fiat to create what it describes as "a vibrant new company".

The move could have an impact on the used car market, if buyers decide to try to get hold of older models of the companies' vehicles in case they are discontinued in future.

"This partnership transforms Chrysler into a vibrant new company with a wealth of strategic advantages," claimed Bob Nardelli, chairman and chief executive of Chrysler.

He added: "It enables us to better serve our customers and dealers with a broader and more competitive line-up of environmentally friendly, fuel-efficient high-quality vehicles."

However, the company was forced to file for bankruptcy in the US, after not all of the shareholders could come to an agreement over the future plans for the firm.

Nonetheless, the new strategic alliance now looks set to go ahead, with Fiat firmly in the driving SEAT of the new organisation.

German manufacturer Daimler recently agreed to give up its 19.9 per cent stake in Chrysler and forgive the latter's outstanding loans, as the two firms headed their separate ways.

Daimler originally bought Chrysler in 1998 but sold the majority of its holding in the company in 2007 after being unable to turn around the struggling manufacturer.

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