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Fiat Chrysler cosies up with Suzuki

Open season: Fiat Chrysler CEO Sergio Marchionne has not ruled out a future alliance with Suzuki.

Marchionne warm to idea of Fiat Chrysler climbing into bed with Suzuki

Fiat logo13 Mar 2014

By RON HAMMERTON

FIAT Chrysler Automobiles has left the door wide open for closer links with Japanese motor manufacturer Suzuki.

Although such a deal could take many shapes, it might involve the Italian-American conglomerate buying out Volkswagen’s 19.9 per cent share of Suzuki, thus ending an acrimonious and long-running feud between the German and Japanese ‘partners’ and instantly giving Fiat Chrysler a leg up in Asia, particularly India.

It would also provide opportunities for sharing platforms and powertrains across a wider spread of vehicles, probably under the Fiat, Chrysler, Jeep and Suzuki nameplates.

Asked at the Geneva motor show about co-operation with Suzuki, Fiat Chrysler Automobiles CEO Sergio Marchionne skirted the subject by saying he had a great relationship with Suzuki president Osamu Suzuki.

“I have a huge amount of respect for what he’s done and I continue to be open to ways in which we can collaborate going forward,” he said.

Mr Marchionne said it was one thing for a car producer to have competition with rivals, and another to make smart investments and collaboration, adding: “I’ll try and do anything that works, that meets that target.”

Fiat and Suzuki have co-operated in the past, with Fiat re-badging the Suzuki SX4 as the Sedici, and Suzuki transplanting a Fiat-made diesel engine into its Swift small car for Europe.

The problem for Suzuki is that its global influence has shrunk with its withdrawal from the North American car market in 2012 after three decades of struggling sales there.

However, Suzuki is strong in India, where Fiat Chrysler has had little impact, and also has an ASEAN manufacturing base in Thailand.

A shared platform could be sold under Suzuki badges in India, China, Japan and the rest of Asia, as a Chrysler in North America and as a Fiat in Europe, the Middle East and Brazil.

The deal could extend to Jeep which has just revealed its new compact 4x4 model, the Renegade, which might offer opportunities to Suzuki, which is strong in small SUVs.

Mr Marchionne said that when he sat in the new Renegade on the Jeep stand at last week’s Geneva show, a Japanese man hopped into the back seat.

He said he asked who he was, and he said “hi, I’m from Suzuki”.

“They’re everywhere,” Mr Marchionne quipped.

Any potential deals between Fiat Chrysler and Suzuki would be dependent on resolution of a rocky relationship with VW, which is Suzuki’s biggest single stakeholder outside the Suzuki family.

The two companies forged the partnership in 2009 when VW bought 19.9 per cent of Suzuki shares, but it fell apart two years later when both companies accused each other of breaches of the arrangement. One of those alleged breaches was Suzuki’s sourcing of the diesel engine for Swift from Fiat.

Suzuki went public, saying it wanted out, leading to a serious of legal battles.

Although media reports last year suggested the two companies were trying settle their differences, no outcome has been announced.

If Fiat Chrysler does decide to climb into bed with Suzuki, it would have the perfect opportunity to announce it in Detroit on May 6 when Mr Marchionne is due to make a major statement on the strategic direction of his company and the future model direction of each of its eight brands – Fiat, Alfa Romeo, Maserati, Ferrari, Lancia, Chrysler, Jeep and Dodge.

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