RUMOR MILL: Hyundai Interested In Purchasing FCA - Who Wins In This Scenario?

Consumers win!

They will dominate the rental lots.

I am surprised they would be interested. Only way it works is if they can significantly scale down the Italian operations (ie only Alfa/Maserati made in Italy) they could keep the Italian designs for Fiat and base them off Hyundai platforms and build in Asia. They can also shore up Chrysler cars with Hyundai models. It will be tough to pull off...Are the Ram/Jeep Crown Jewels worth the risk??

Platform sharing, bigger purchasing power, strengths in different markets, products that do not overlap (that much) between brands. Italy will be the loser in all of this as plants will be closed / reduced in number. Fiat and Lancia brands are shuttered or are reborn on Hyundai platforms in much smaller numbers. Only Alfa and Maserati survive. Many iterations are possible of a future corporate structure. Time will tell if any of these rumours regarding the sale of FCA are true.

The big problem is that it is very likely they won’t be able to reduce their footprint in Italy. The Italian government will likely require job guarantees for many years to approve the sale of FCA. If it were as easy as closing the Italian plants then there would be a lot of interested buyers.

American workers win BIG TIME.

It's likely that Hyundai-Kia would buy only the American arm, which is the only part of with value. Chrysler/Dodge/Jeep/Ram is a legally separate entity from Fiat/Lancia/Alfa-Romeo/Maserati under with both owned by FCA. It was structured that way so as to be able to dump the American brands.

H-K wants Jeep and Ram.

Ram would likely become Dodge. Chrysler could be supplanted by Genesis in a heartbeat. So two brands killed right off the bat.

If Sergio says that Hyundai has to buy it all, then...

Lancia dies immediately.

Alfa-Romeo is put up to the highest bidder.

Maseratis could be pulled off the modern Genesis platform and finally leave the ancient "Mercedes LX" platform.

Fiat could be flushed to the Chinese.

Given the bigotry of the Italians not wanting foreign ownership, it likely that Hyundai would not have to worry about any of those brands.

Matt- be serious

The Agnelli family still owns 25 % of FCA and close to that in Ferrari. They are not stupid people and certainly would not allow FCA to get rid of its American Brands and leave them with worthless stock in Fiat alone. WE are currently talking in a multi-billion dollar investment - and Fiat will have to sold essentially whole (Maybe they might sell the european truck division separately)

FCA was structured as it was for tax purposes - not for the ability to sell off sections of the company - they even stated that at the time.

I do not see a match between Hyundai and FCA - and I think this rumor will end up being fake.

TomM- be coherent

Actually the Agnellis are that stupid. Their decades of fiscal mismanagement of Fiat speak volumes about their idiocy.

Everyone in business knows that if two ventures are legally separate for tax purposes, they can be sold independently of each other. But then, you're a Democrat so what would you know about running a business? It's just like your son--TheSteve--who thinks that having a car dealership with no expectation of selling cars to customers or even a volume goal, but sharing in the profits is brilliant business.

FCA would NOT need to be sold whole.

Sorry - but the Agnellis are worth a collective 18 billion dollars - that is not chump change. Fiat cars may not have been run properly over the last few years - but they did manage to get Chrysler for less than nothing - today looks like a great deal to me. And Fiat made a fortune working with the then Communist countries - getting cheaper labor - back when no one else would do so. They simply made cars for their own market - and they still control about 90% of the sales of cars in Italy - but in the 1980 - they spun off the individual companies that Fiat controlled - to become a holding company that also is into lots of other things.

The fact is - while their little cars do not sell well in the USA - they do sell well in Europe - the 500 has won major awards - and most cars are selling well. Yes - they - like GM - had too many brands - and have had to let some die - but at least they are not like VW - whose number of brands seems to increase all the time. ANd the 500 is made in Poland where labor costs are lower than Italy as well.

The Agnellis are not going to break up FCA into a situation where they are left with FIAT alone - period - UNLESS they get MAJOR TOP DOLLAR for other assets. THis is not a fire sale - and they will not sell for a low price. FCA is worth far more than its stock would indicate.

The Agnellis are not making their money off of Fiat. Take your pills, Tom.

FCA is bleeding cash, getting by on guile with marketing, and delaying new introductions. It's going to be sold before Sergio retires next year and why not the South Koreans who have shown forward thinking designs and a commitment to growth. They get expanded distribution in US and Europe and a stable of a few well known brands to invest in growth and economies. I think its a winning combination for both companies and consumers will benefit from inflow of new
interesting designs and technology at potentially better value for the dollar.

Hyundai has the dollars and the platforms to make it all happen.

By the mid-1990s Hyundai comprised over 60 subsidiary companies and was active in a diverse range of activities including automobile manufacturing, construction, chemicals, electronics, financial services, heavy industry and shipbuilding.[4] In the same period it had total annual revenues of around US$90 billion and over 200,000 employees.

Hyundai is into a lot more than building cars. If they want to do a deal with FCA it is possible.

Jeep wins because it will be sold off long before such a deal would be finalized.

Why would someone buy FCA without Jeep? FCA will be sold in whole or in pieces but not just without Jeep. Jeep is the hook to get you to take the rest of the crap.

There are a number of reasons to buy FCA without Jeep.

1. Government contracts
2. Still have contracts with MB for E-Class chassis, which lowers dev costs
3. Dealer network: both in the U.S. and global
4. Gain luxury & performance credit from Alfa and others
5. Gain Ram brand
6. Gain big engine expertise
7. Gain larger economy of scales on production
8. Can streamline product line-up
9. May improve FCA quality
10. Increased driving dynamics from FCA

11. Hyundai would gain additional North American production facilities
12. Hyundai & Chrysler already have worked together
13. Neon can rest in peace
14. Hyundai can bring commercial vehicles, in larger number, to the world

15. The return of Corinthian leather

@MorePower You got me with the return of Corinthian leather. I have fond memories of a certain non-running Cordoba.

Yes, the MOPAR guys will spin like tops when they realize they are driving a Hyundai Hemi! Sounds like a Asian boiler room drink.

It is hard to imagine who could both afford and benefit from entire FCA purchase. A China manufacturer could greatly benefit by getting into new markets but not afford the whole group. Hyundai could afford but they are doing fine in Europe and US, and there are too may useless brands for them in a total buyout. FCA will have to go the GM route and sell off pieces.

Affording it is the easy part given that the only brands of worth are Jeep and Ram. That's what Hyundai would be paying for. The rest would be the trash they have to clean up.

Hyundai can easily buy the whole thing and then spit out parts.

Why do you assume they would maintain all the brands?

Too much risk to assume the other brands could be sold for fair price and fire sale to your competitors would be mistake. Agreement and gov approval would likely include requirements to keep production and employment in place, so shutdowns not possible.

No risk at all. Jeep and Ram are huge profit generators and the Italian government would never let Fiat die.

If Hyundai sold the Chrysler name to BAIC that would be a win given BAIC's connections with both companies and more than likely, production of BAIC vehicles as Chryslers would happen in the USA given Beijing's push to be more mindful of the trade imbalance. This was the impetus behind GAC wanting to buy Jeep and Ram.

If Hyundai got FCA for free, they'd be paying too much. (Okay. Not free, just the price of Jeep alone.) If owning FCA was so great, FCA wouldn't be in the position it is now. Alternatively, new owners would have to be ready to pump in the money FCA doesn't have for new product other than Jeep (maybe).
Better than buying the entire company is to wait for them to go out of business -- every day without compelling new product is digging the hole deeper -- then buy whatever choice pieces are there. BTW: The market is not going to wait a couple of years for new product, that's not how it works.
Chrysler has been on the brink a number of times during my life, but I'm certain this time, it'll be the end.