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Chrysler & Fiat/Alfa join forces...

CHRYSLER AND FIAT JOIN FORCES

The plan: 7 Fiat vehicles for U.S.
From mid-sized to micro, Chrysler can plug holes

Bradford Wernle
Automotive News Europe


Chrysler LLC and Fiat S.p.A. will bring seven new vehicles to North America under their alliance ó four with Chrysler brands and three as Fiats or Alfa Romeos.

The vehicles will be built at Chrysler plants in North America and sold through select Chrysler, Dodge and Jeep dealerships, according to sources who have seen the product-sharing agreement.

The plan includes vehicles on four Fiat platforms ó in the microcar, or A, through the mid-sized, or D, segments. The two companies have not decided on timing or volumes. Teams at both companies are hammering out details of a plan they hope to make final by April 30.

The two companies said last week that Fiat would take a 35 percent stake in Chrysler. Under terms of their tentative agreement, Chrysler will make the Fiat 500 at Chrysler's Toluca, Mexico, plant for sale in North America, according to sources familiar with the plans.

Chrysler will retool the Toluca factory, where it currently makes the Dodge Journey crossover and Chrysler PT Cruiser. Chrysler announced last week that it would quit making the PT Cruiser this summer and put the line up for sale, making room for another vehicle.

Speaking with reporters at the Automotive News World Congress on Wednesday, Jan. 21, Frank Klegon, Chrysler executive vice president for product development, said teams from both companies were working on a plan.

Referring to Chrysler's current lineup, Klegon said, "We don't have an A-segment vehicle, and we don't have a B-segment vehicle, and our C-segment vehicle [Dodge Caliber] is in the next stage of renewal. That creates some opportunities for us."

Fresh product
Chrysler LLC dealers would get these Fiat vehicles
Minicars
(A segment)
Two small cars, the Fiat 500 retro 3-door hatchback and a 5-door hatchback based on a next-generation Fiat Panda. The latter likely will be sold as a Chrysler or Dodge.
Subcompact
(B segment)
Alfa Romeo MiTo, plus a vehicle for one of Chryslerís brands.
Compact
(C segment)
A vehicle on Fiatís C-Evo platform made at a U.S. Chrysler plant, possibly a Dodge Caliber replacement. The alliance also would build the Alfa Romeo 147 replacement for U.S. sale on this platform.
Mid-sized
(D segment)
A replacement for the Chrysler Sebring and Dodge Avenger mid-sized sedans on a stretched version of the C-Evo platform Fiat is developing.

Small-car fix

The Fiat deal, if made final, would provide a quick fix for Chrysler's small-car problem. The company needs a fleet of vehicles to meet new, stricter U.S. fuel economy standards, which take effect for the 2011 model year.

The agreement calls for two minicars in Europe's A segment, the Fiat 500 and one with a Chrysler or Dodge badge. A CSM Worldwide report says the 500 could be sold in the United States in 2012.

The five-door minicar could be based on the next-generation Fiat Panda, a small five-door hatchback that is the biggest-selling small car in Europe, where Fiat dominates the segment.

A Panda-style vehicle would give dealers a city car. The 500 is something else altogether ó a small, retro three-door that has Mini-style cachet without the Mini price. The 500 is Europe's second-best-selling minicar, trailing the Panda.

"The 500 is selling like hot cakes, even in this difficult economic environment," said Nigel Griffiths, an analyst for Global Insight in London. "It has been a runaway success."

Under the plan, Chrysler dealers also would get a subcompact, or B segment, Fiat, most likely derived from the next-generation Fiat Grande Punto. Dealers also will sell the Alfa Romeo MiTo, built on the same platform. The CSM Worldwide report says Chrysler could get a small crossover from this platform.

The alliance also would give Chrysler access to Fiat's 1.4- and 1.8-liter four-cylinder gasoline direct-injection engines. The engines would be made at a Chrysler engine factory, most likely in turbocharged versions. Chrysler's smallest engine now is a 2.5-liter four-cylinder made at the Global Engine Manufacturing Alliance plant in Dundee, Mich. CSM says the engines could be built in Dundee. A source familiar with Fiat plans says Chrysler may make only the 1.4-liter engine.

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