Chrysler-Fiat Merger

The Chrysler-Fiat merger seems to be more about Fiat than Chrysler contrary to what Obama had purposed in his announcement of the merger. The gains that the Italian automaker will assume include having access to American auto plants and service centers as well as the reintroduction of several of their models back into the American economy. All this as well as reaping any rewards that Chrysler gets in the process as they had an initial 35% stake in the American automaker which was increased to 58.5% in January of 2012. Fiat like Chrysler just a few years ago was in a terrible state after a failed merger with General Motors and is now on a rebound.

Chrysler is known for its minivans and its high performance line-up that has, in the past few years, been gaining momentum even though gas prices have gone up and the economy continues to plunge. The Chrysler-Fiat merger is supposedly aimed at getting Chrysler to produce more fuel efficient vehicles to offset the gas guzzlers that they currently have in their line-up. Those automobiles for the most part however, will be Fiats re-badged as Chryslers.

My big concern here is that the fuel efficiency definition that Chrysler is using in this merger really leaves something to be desired at least in my opinion. Chryslers plan in all of this is to produce vehicles that will get up to 40 miles per gallon. To me this does not sound impressive at all. Maybe in comparison to the 27 mile per gallon they are getting now, this would definitely be a step forward, but being that this is 2009, I think that we should have a much better perspective on what good fuel economy really is.

On the up-side of the fuel efficiency topic, Fiat is known for its fuel sipping vehicles and has many models that are ‘dual fuel’. These can run on standard gasoline or CNG (Compressed Natural Gas). The Fiat Panda model boasts a $13 fill-up and a range of 170 miles while running on CNG. Maybe there is hope.

Take this into consideration. I have a 1976 Volkswagen Beetle. Keep in mind that this car is 36 years old. With the stock engine configuration, it gets roughly 30 miles per gallon. That’s already better than Chrysler is getting and with a few modifications, it could do much better. So what is the big hold up today that we cannot achieve what car makers did 36 years ago if not longer?

Another factor to take into consideration is quality. Fiat has never been known for a quality vehicle. My father had a small convertible Fiat when I was younger, and I can remember the car being torn apart more than it was together. They do not have a good reputation for quality as far as I have seen and most likely never will. So my concern is… how much will Chryslers already shaky quality be affected? Do not misunderstand me here; I am not saying that Chrysler vehicles are junk by any means. I have owned two of them in fact, and they have been very decent cars for the most part. There are, however, certain issues with quality that need to be addressed. These I will not get into as they are not pertinent to this subject.

Hopefully this merger of automakers does some good for Chrysler and gets them on the track to producing a fuel efficient automobile for the masses, but it seems that Fiats main concern in this deal is to get its feet (or tires) back in North America. Automaker mergers are like Hollywood marriages, there’s always more in the deal for one partner than the other and the divorce rate is staggering.