Report Claims Hyundai Is Considering A Bid To Buy Fiat Chrysler

FCA cannot survive on its own moving into the next 25 years. They simply have not spent money to upgrade its platforms - engines - or much else. So - when they point to high profits - it is misleading. Their "Chrysler" cars will eventually become Passe - and Fiat itself has little to hang their hat on. WHat keeps them alive are RAM and JEEP - HOWEVER - do not forget that the American Market might react unfavorably to those being KOREAN cars too.

Buying FCA makes no sense. They do not have enough cash to invest in new platforms or technology. The 300 and the Charger are ancient by today's standards, launched in January 2004 as 2005 model year car and "refreshed" in 2011. All their other cars have failed. I can possibly see them buying it for Jeep and the Ram trucks to fill a shallow hole, but Hyundai/Kia are on a roll. Will the capital sunk into this hole earn more than if invested elsewhere? I doubt it. FCA is too damaged.

(1) Hyundai has plenty money and have all the platforms needed to make FCA brands flourish.
(2) Jeep and Ram make the buy a profit maker for H-K from day one.
(3) New Dodge Charger and Challenger would be as simple as re-hatting Genesis.
(3) Chrysler serves no purpose so killing it will be easy.
(4) Alfa Romeo or Maserati would likely go back to Italy because two competing premium brands make no sense
(5) Genesis would essentially be irrelevant but would become badge engineered Maseratis

It really gets down to a matter of name recognition and perception. Chrysler and Dodge make lousy products currently. However if they used Hyundai/Kia platforms and powertrains with American styled bodies they could begin to flourish again. One major problem that has plagued FCA has been poor reliability ratings. They have consistently been at the bottom of JD Power for example. Hyundai/Kia could change that. Imagine a Stinger platform for a Chrysler 300 or Dodge Charger or Challenger. Hyundai would have to determine the value of keeping Alfa and Maserati. They are historical brands that may still have relevance over Genesis.
I could see Fiat badged Hyundai's and Kia's being sold in Europe only. Really little point in trying to continue the American experiment. It has clearly failed.

This needs to happen NOW. Imagine if H-K buys FCA and then announces a new plant in NoKo to build the 500 or other such car for developing countries.

EVEN GOD DOESN'T HAVE ENOUGH BRAINS OR MONEY TO TURN AROUND CHRYSLER!

Rescuing Chrysler/Dodge would be a snap. You make both niche brands. Dodge would do a new Charger and Challenger using the excellent Genesis platform and Chrysler would be two crossovers and a minivan.

If you’ve followed what I’ve been posting for the past 6 months, Maserati and Alfa will be spun off with Exnor having controlling interest. It will either be a parallel sister company to or under control of Ferrari (Marcchione will remain as Chairman of Ferrari after he retires from FCA).

The integration of the operations of Maserati and Alfa have been taking place for over a year. It is now in the latter stages and going to be fully operational in the near future. Fiat Auto will probably go with the other Italian someway.

The Chrysler products will be sold off to Hyundai. End result will be that FIAT will essentially be the same company as it was in 2008 before the Obama Administration effectively gave FIAT control of Chrysler to bail out its supporters in the UAW. The difference is where FIAT was operationally broke in 2008, it will get a boat load of cash to separate from Chrysler, its Maserati and Alfa factories in Italy will have been revamped and its products will have brand new industry leading platform.

Now what was this about Marcchione not knowing what he’s doing?

Spinning Maserati and Alfa Romeo off will only increase Hyundai-Kia's profits. Maserati and Alfa are dead in the water.

Hate to break it to you but Maserati is profitable and has been for a number of years. Alfa is on its way to becoming profitable as well as more products get launched.

From the 2017 FCA Annual report. “Maserati’s Adjusted EBIT climbed 65 percent to €560 million and margin grew to 13.8 percent, up from 9.7 percent the year before. Shipments grew by 22 percent, primarily driven by an increase in global sales of the Levante which were partially offset by lower volumes for the Ghibli and Quattroporte.‘

If Maserati if profitable in Europe fine, let it go there, but in the USA Maseratis sell with lots of money on the hood and are NOT big profit generators. In the USA, the Levante is a complete failure for sales. Here, the Ghibli outsells the Levante. And the Ghibli's sales are pretty nonexistent.

Maserati sold about 5,500 Ghiblis in the US in 2017 and approximately the same number of Levantes with a total of about 13,500 cars sold in US. However Levante production was just getting up to speed in January and February. In 2018 Levante will outsell the Ghibli.

While 13,500 may not seem like a lot of cars, 6 years ago Maserati’s world wide production for all models was under 7,000 cars per year. Porsche only sold approximately 13,500 Cayennes in the US in 2017 with a base price $12,000 less than the Levante and there are approximately 80 more Porsche dealers than Maserati.

Should the Levante have sold better? Yes. did they blow the launch of the Levante? Absolutely. That can be directly traced to Auburn Hills and the appointment of Chrysler staffing that are completely clueless when it comes to luxury brands yet alone a specialty brand like Maserati.

That was the biggest mistake Marcchione made in terms of Maserati and Alfa, plus appointing Chrysler dealers to sell Maseratis and Alfas. They don’t understand that no one needs Maserati or Alfa (or Porsche, MB etc). They want one, but can just as easily buy (actually lease) one of its competitors instead. They can’t be treated like they’re buying a Chrysler or Jeep. It has to be at least the same as its direct competitors but should be at least a level or two above them.

THAT is where the real failure of Maserati and Alfa is in North America! In his quest for an established distribution network Marcchione chose to try and sell Gucci bags at Walmart.

Talk about an idiotic statement: "However Levante production was just getting up to speed in January and February." The Levante has been available in American dealers for 22 months.

Illogical comparison: "...Porsche only sold approximately 13,500 Cayennes in the US in 2017 with a...". It is illogical because there is massive profit on Porsches, but fire-sale pricing on Maseratis. Getting 30% off is fairly easy to do.

MDarringer - You really should consider reading a statement, first comprehending what was written before responding. The statement was in reference to 2017 Levante sales. The Levante began to become available to US dealers in November 2016. Production in Italy traditionally shuts down from around December 20 until about January 5. Which means production doesn’t begin to arrive in the US until March/April. In January and February of 2017 dealers were still selling Levantes at MSRP. From March/April onward supply began to outstrip demand, which at that point is where the Chrysler appointed dealers were standing around waiting for people to walk through the door like they were selling dodges.

As far as profit margins is concerned, don’t kid yourself that Porsche wasn’t discounting Cayennes. Porsche has an industry leading 15% margin Maserati is just under 10%. Maserati doesn’t have halo cars like the GT2, GT3 etc to help pad their margins.

The Levante went on sale in August of 2016. Get your facts straight. Mine always are.

Again you have horrible sources you take as factual. Every Maserati dealer received a minimum of 4 pre-speced Demo Cars beginning in late August 2016 to use for ride and drive, overnights etc. to take orders from for later delivery. Those cars were required to be punched and moved into demo service.hence the reporting of sales starting in August. The dealers didn’t start receiving sold orders until late October November. Allocation was restricted until February build.

Maserati Levante units sold in the USA since introduction:
2016
Aug. 91
Sept. 387
Oct. 501
Nov. 331
Dec. 607
2017
Jan. 379
Feb. 305
Mar. 567
Apr. 473
May 451
Jun. 400
Jul. 446
Aug. 446
Sept. 475
Oct. 493
Nov. 483
Dec. 565
2018
Jan. 279
Feb. 458
Mar. 348
Apr. 0
May 390

Again reading and comprehension issues. There are Approximately 120 Maserati dealers in North America, if each dealer got a minimum of 4 demo units each that’s approximately 500 Levantes larger dealer such as in metro ny, Southern Florida and California got more. Another 50 or so units went corporate personnel, Reps etc. all these vehicles were punched as demos which reports them as sales.

Do you comprehend that the number of dealer demos punched matches the sales reported for August, September and into October 2016 which you copy and pasted from Car Data?

Actually NO it is YOU that is wrong. You said that Maserati dealers got 4 vehicles each in August 2016, 4 x 120 -480 units, but as you can see the number was 91. You also assert that there were virtually no sales until November--again the number prove you wrong--and that the Levante sold in a trickle until February owing to the eccentricities of Italian production. Again, the numbers prove you wrong.

On top of that you contradict yourself. First you say that at least 4 demos went to every dealer in August and then you magically claim the number is then spread over 4 months. You're the one who has comprehension issues.

You were not behind the scenes in management at a Maserati dealer, so you're making it up as you go.

The fact remains that the Levante is a dismal failure for sales. Like other Maseratis it is steeply discounted.

Foncool, I like your view of this it makes sense. MD, you are right about Maserati. It will take years and lots of investment to make it relevant in the US and that is only a maybe. Another thing K=K gets is a lot of dealers.

Getting a lot of dealers is the DOWNSIDE. FCA--despite consolidation--still has too many dealers.

The way forward is to put Ram and Dodge into Hyundai dealers and Jeep and Chrysler into Kia dealers.

The Chrysler brand would be an easy way to rebrand the Cadenza or K900.

Good point on the number of dealers. The K900 would make a decent 300C replacement. I just read that Fiat's sales took a nosedive in June. 75% of future spending will go into Ram and Jeep. Fiat brand is about to be pulled off life support.
Can Dodge and Chrysler be far behind?