The 2009 Chrysler-Fiat Strategic Alliance 2

Case 7        The 2009 Chrysler-Fiat Strategic Alliance

Yoichi Horibe

1)      What are your views of the 2009 Chrysler-Fiat strategic alliance and its future prospects in the auto industry?

In the future, Fiat is expected to own 35 percent of Chrysler by 2013 and could acquire 51 percent of the company. If each company achieves their alliance objectives in the areas of cost cutting, technology sharing, global integration, product rationalizations, and R&D savings, the tie-up will definitely be rated as a major achievement.

2)      Analyze and evaluate Chrysler and Fiat’s strengths and weakness before and after their 2009 strategic alliance (see table II and III).

Fiat has been successful in Europe and Chrysler has a brand name in North America. However, Fiat lacks visibility in North America and Chrysler does not carry a strong dealer network in the European markets. They offset each weakness and use each advantage.

3)      Compare and contrast Chrysler and fiat with five other global auto manufactures (GM, Ford, Toyota, Volkswagen, and Daimler) in the areas of global operations and manufacturing issues (see table IV and Exhibit III).

Chrysler always trailed both GM and Ford in market share, technology, and consumer satisfaction. Chrysler was called the “Number Three”.  To make matters worse, the company was further downgraded in the auto industry with the arrival of Japanese companies. However, Chrysler-Fiat got big competitive advantage recently because of the merger and acquisition.