Episode 62 – Fiat Saves Chrysler, Saab to Stand Alone, 43 MPG Focus

January 20th, 2009 at 12:00pm

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Fiat is going to take a 35 percent equity position in Chrysler and give Chrysler immediate access to its platforms, powertrains, components and distribution system. GM is preparing Saab to become its own standalone company. The next Ford Focus could get 43 mpg using the powertrain from the Lincoln C Concept. All that and more, plus a look at how Honda plans on marketing its redesigned Insight hybrid.

Transcript and Story Links after the jump . . .

Here are today’s top headlines. Fiat and Chrysler announce they’re going to tie the knot. Saab could run as a standalone company. And the next Ford Focus could get 43 mpg.

Up next, we’ll be back with the news behind the headlines.

This is Autoline Daily for Inauguration Day Tuesday, January 20, 2009. And now, the news.

Hallelujah, Chrysler has been saved — again! Fiat is going to take a 35 percent equity position in Chrysler, even though it will not fork over any cash. Instead, Fiat is going to immediately give Chrysler full access to its platforms, powertrains, components and distribution system, and that alone could be worth billions. In addition Fiat will provide management services supporting Chrysler’s viability plan that it has to submit to the U.S. Treasury next month. This should not affect the product sharing programs Chrysler has with Nissan and Volkswagen, but I’ll bet Carlos Ghosn at Nissan is kicking himself that Fiat got a hold of Chrysler with no cash involved. However, the deal must still meet with regulatory approval.

And where does this leave Cerberus? Daimler still owns just under 20 percent of Chrysler. With Fiat taking 35 percent, and an option to take that over 50 percent, that means Cerberus will only own 45 percent of Chrysler and maybe less than 30 percent. While the Fiat deal requires Cerberus to maintain ownership in Chrysler, my guess is that the next step will involve management changes at Chrysler. Not immediately, but before the year is over.

Last week at the Detroit Auto Show Lincoln debuted a vehicle called the C Concept. It features a 1.6-liter EcoBoost engine and a six-speed, dual-clutch transmission. Autoblog reports that powertrain may be used in the next-generation Focus, which would deliver 180 horsepower and fuel economy that rivals a diesel: 43 miles per gallon.

Czech automaker Skoda says its sales in China will grow 50 percent in 2009. Gasgoo.com reports that the company is expecting to sell 90,000 vehicles in China this year. And I didn’t know Skoda even sold cars in China. Skoda, by the way, is part of the VW Group, which will help vee-dub boost its share in the Chinese market.

UAW President Ron Gettelfinger says the February 17 deadline for GM and Chrysler to show Congress its restructuring plans may be “unattainable”. The plan includes major concessions from everyone involved and according to the Detroit News, Gettelfinger says no real progress has been made. Meanwhile, the Canadian government is getting impatient waiting for those restructuring plans before it agrees to provide GM and Chrysler with bailout money.

But here’s some progress. According to the Automotive News, GM is preparing Saab to become its own standalone company (subscription required). GM would still own Saab but decision making and financial control would be given to the Swedish automaker. R&D and design is expected to move back to Sweden from Germany. This could make it easier for GM to sell off Saab.

Coming up in our feature story we’ll look at how Honda plans on marketing its redesigned Insight hybrid.

We’ll be back right after this.

As we reported yesterday, Honda chose the Detroit Auto Show to reintroduce its hybrid nameplate, the Insight. Today, a little more about the car and how the company intends to market it.

The 2010 Honda Insight is a five-passenger, five-door hybrid with a combined EPA score of 41 miles per gallon. One of the ways you’re able to drive in the 40s is to use Honda’s video game-like ECO Assist system. Once you push in the green button on the dash, the instrument panel lights up to give you options that let you increase the car’s efficiency. Now this kind of system may not be for everyone, but Honda believes it knows exactly who to market the car to.

And Honda catered to the Gen-Y customer not only in styling but also in introductions. Talk about understated… it used a blog to announce the Insight concept at last year’s Paris Auto Show while at last week’s international unveiling, the car virtually flew under the radar when the company chose not to hold a press conference. Maybe that’s the kind of marketing Gen-Y likes?

Of course Honda hopes that other groups like empty nesters will buy the car as well. If so, the company will gladly increase its annual sales goals of 90,000 North American units. On Thursday we’ll be back with a look under the hood of the 2010 Insight.

And that’s it for today’s top news in the global automotive industry. But don’t forget, you can get podcasts, transcripts and a whole lot more on our website, AutolineDaily.com. Thanks for watching, we’ll see you tomorrow.

12 Comments to “Episode 62 – Fiat Saves Chrysler, Saab to Stand Alone, 43 MPG Focus”

  1. Brian McInnes Says:

    I would say the news that FIAT is taking a 35% stake in Chrysler can only be good news.
    FIAT has built cars that have been fun to drive and I’m not just talking about their sports cars.
    In Europe Fiat have a great range of stylish cars.
    However this is not Europe. The US has always had it’s own individual styled cars. Lets hope we still have designers with imagination and American cars will still have their own individual identity

  2. pedro Fernandez Says:

    Joh: I’m glad to read the Fiat/Chrysler deal. I wonder if Fiat has improved their cars so they could be sold here with Crysleer nameplates.
    . They used to be horrible, that’s why they had to pull out of the U.S.

  3. R. Rufty Says:

    Chrysler and Fiat, now that is laughable. What were the two car companies back in the 50′s that merged and the merger was descibed in the press as “two drunks trying to hold each other up”?

  4. pedro Fernandez Says:

    Fiat has always had attractive, fun to drive cars, but their quality was abysmal, unless they pulled a Hyundai type improvement, they’ll get nowhere here.ps the Yugo was a Fiat product.

  5. Brandon Says:

    Sounds like the new Honda Insight has some eco-friendly gauges to help drive more effeciently like the new Fusion Hybrid. Can’t wait to see the new Fusion in Chicago next month.

  6. Salvador G. Says:

    FIAT… FIAT

    John, did u decide to take avantage of the new president to lay down a few punches.

    You know, its really hard what to make of this, but I would like people to know what Fiat its like today by recomending to check a few webpages.

    Please check this out…

    http://www.alfaromeo.co.uk

    http://www.fiat.com/cgi-bin/pbrand.dll/FIAT_COM/showroom/selectModel.jsp?BV_SessionID=@@@@1263969867.1232487394@@@@&BV_EngineID=ccciadegfhkkjdkcefecejgdfkhdfjk.0&categoryOID=-1073761346

    Thanks again john.

    Ps. hope this is not a bother, but if Fiat its coming to the USA, I like to let people know what they bring.

  7. Ronald E Says:

    I’m afraid Chrysler will now throw some small cars on the market just because they have them, without any real strategy or market considerations. Get a european car, cheapen the interior and quality ‘because thats what the american market wants…’ and throw on the market. We’ll see…

  8. Drew Says:

    FIAT SAVES CHRYSLER??

    Boy, and all this time I thought it was the AMERICAN TAXPAYERS that saved Chrysler…….

  9. ulisse di bartolomei Says:

    The patent fraud. About the Fiat hybrids, the technology double clutch with electric motor between has been stolen by a patent that Fiat Company has never wanted to purchase, but only shamelessly to copy. I invite to visit my blog where her “vitality” and boldness of the Fiat planners it appears in all of evidence: http://dualsymbioticelectromechanicalengine.blogspot.com/
    If the industries can afford unpunished to copy the ideas and defending it need very expensive trial, to which target need the patents? How our young people can find intellectual courage if the economic potentates crush the rights of the single ones? How to defend the rights of private inventors? Whoever is about to ask for a patent or wants to propose a proper patent to a great firm I suggest to give a look to my experience with the Fiat, to get able to operate with best adroitness. Thanks and good time to everybody. Ulisse Di Bartolomei

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