No, neither Volkswagen or Fiat-Chrysler Autos have much to do with General Motors, but this news comes after FCA CEO Sergio Marchionne attempted to swoon GM on a few occasions.
GM didn’t answer, but Volkswagen may answer the call.
News broke yesterday that Volkswagen CEO Matthias Mueller is “not ruling out a conversation” regarding a potential FCA and VW merger, but sources close to our sister publication Fiat-Chrysler Authority state the deal may be further along than once thought.
Volkswagen officials have reportedly been in and out of Auburn Hills, Michigan, to dig into FCA’s books, according to the sources. VW’s change of heart may be due to GM’s sale of Opel and Vauxhall to PSA Groupe, which makes the French automaker the second largest conglomerate in Europe, right behind Volkswagen. Previously, the Germany automaker stated it had larger issues at hand then to discuss a merger with FCA, referencing the fallout from the automaker’s dieselgate scandal.
Marchionne believes PSA’s acquisition of both Opel and Vauxhall will inspire Volkswagen to discuss a merger with FCA to further cement itself as the largest automaker.
The news is certainly in its infancy. Despite Volkswagen potentially visiting Auburn Hills, Mueller was quoted as saying it “would be very helpful if Mr. Marchionne were to communicate his considerations to me too and not just to (the media).”
Could a VW-FCA be in our future? Time will tell.
Comments
I thought that there might be a possibility of GM revisiting FCA merger but now that we know what GM is trying to accomplish by dumping bad business there is no way GM wants any part of FCA.
It’s very apparent that FCA needs help. They went knocking on GMs doors first because GM has A LOT of what they want and need. The problems is that FCA has nothing GM wants or needs. Maybe…maaaybe the Jeep line. But that’s not enough to take on the rest of FCAs mess. RAM? GM has better. Chrysler? Or what’s left of it. Nope. Dodge? Nope. Fiat/Alfa/Lancia? GM just got rid of their own version. Maserati? Neh.
On the other hand. VW and its struggle with American market could benefit from much more of what FCA has to offer.
I have the same thoughts about Jeep. But GM has GMC, which builds far better vehicles than Jeep.
If GM showed GMC some love, it would become a powerhouse in a heartbeat.
I just feel sad about Dodge. All cars (brands, models…) I like seem to be reaching the finish line (Pontiac, Dodge, Commodore, Impala…). I’d really hate to see Dodge go.
I agree that Jeep is the only brand of value. GM has no off-road geared product lines, just a few rugged packages. I think GMC could easily be an outlet for a line of more rugged SUVs to take the void left by Hummer, but GM seems to be more interested in a professional, rugged designs and profit margins (Denali).
Somebody at VW likes sweaters…..
GM should swallow FCA. Jeep is a very popular global brands. Ram will always make money. Dodge has the potential to be Pontiac-like as a four vehicle brands. Chrysler could do well in the vanilla family space with Pacifica, and other SUVs that would never work as Jeep plus two sedans.
The rest of FCA aside from Masserati should be sold. FCA has a lot of hidden assets such as lighting/components companies. Alfa could fetch one billion. These sales would eliminate FCA debt.
Another thing is that FCA has several US plants that are either relatively new or have had hundreds of millions of dollars put into them. If Trump pushes through the 20% tariff that US based manufacturing capacity could be very attractive.
The price for Jeep is too great.
If you take Jeep then you have to take the rest of the baggage that goes along with it. GM is not setting itself up to be a mega top heavy corporation as PSA and VW have.
PSA is doomed and VW will be ok as long as outside things like the collapse of the Euro or such would happen.
FCA has too much dead weight.
If VW walked in they would kill Dodge and Chrysler.
Alfa and Maserati would both end up as brands with names but Audi or Porsche products under the skin. Not really a bad thing.
Fiat may be rebadged as an economy model in Europe like Seat or even a part of Seat.
The trucks and Jeep would be all they really prize. They need a truck and Jeep is a established global brand.
As for GM buying them they already just got rid of Opel for the same reasons they do not want FCA. GM has no use for anything at FCA but Jeep. Taking on the rest would be so very counter productive.
GM could do a off road brand in GMC if they so chose for much less and give it a Hummer Vibe. Being a part of GMC would give them much more flexibility in the market.
Chevy is already now looking into the Hummer like segment with the ZR2 Trucks. They brought in 4 ex Hummer engineers to over see the program an used the H3 truck as the guide.
Hummer could scale a 60% grade and master the Moab class 4 in stock trim. Well the ZR2 can do that too as well fit in placed the larger Hummer could not. I expect this is not the last of the real off road packages we will see. GM may be going to Chevy to do it after all.
Finally the one real problem is Sergio. He will implicate himself a place in all this and you will have to put up with him at every turn. Jeep is a prize but not a great prize with him in the back seat.
Trust me as much as Jeep is a cool idea it is not worth the cost or risk of taking on the major problems and over capacity that FCA will bring to the table.
The other problem is you think the German government would not work with GM just see what the Italian government will try. They are are more dysfunctional than FCA.
Scott3, we definitely know GM has no use for FCA, perhaps Jeep….but ofcourse as discussed on this site in the comments section GMC can do offroad vehicles if the market calls for it and then Chevy has the Colorado ZR2. Jeep has a good name but GM has no need for the other divisions.
The problem with FCA merging with VW means a division or 2 may disappear.
If FCA walks through the door and completes a deal, Dodge or Chrysler may not see daylight again. VW will most likely kill one off.
It seems like there may be more Brands/divisions still go defunct in the future in the Automotive industry.
Gino that is the sad fact that more will die. In some cases some may get a reprieve but in others they are as good as gone at some point.
I have seen too many brands die but there is little in this economic climate to change that.
The cost of development in the auto industry is staggering. The grow outside of China is stagnate and the profits are slim hence the cutting of fat and dead wood from existing companies.
To survive all but VW and PSA have to learn to do more with less and make more money doing it.
The Ford GM transmission deal was real telling as so few really understood what that really meant.
To be honest there is no company that is safe from failure out there. Some are on life support and others it is a matter of a major problem coupled with a economic slump that could doom them.
VW has managed their brands well and so far have weathered the Diesel issue better than expected. Yet a major economic crisis in Europe or global could really challenge their empire if they do not manage it right.
Also look at FCA. We now have Ram Trucks. Do you think they removed the Dodge name from the Ram just for fun. They too knew there was a great risk that there may be a failure hence the name drop to sell them if needed.
FCA has starved the cars and delayed projects do to lack of money and do to the fact they know the division may fail or be closed in a merger or sale.
FCA was a failure when the two merged. If Fiat had chose Dodge as the volume division they may have made it with Jeep funding it. But with Segio’s fantasy that Alfa was going to be the volume division he sealed their fate.
Alfa Romeo was never intended to be their volume division . FCA wants to decrease production of cars in general FCA was making cars at 6_to 7 % profit and manufacture higher profit cars from 12-25.% profit….. (Alfas-Maseratis) ect, Sergio saved Fiat in Europe from bankrupsy and will make FCA one of the most profitable auto makers in the US.
(not saying largest ) Maserati was selling 7000 cars worldwide in 2010. In 2016 manufactured 43,000.00 worldwide , With only one model of the alfas sold from june to december in Europe 10,450.00 Alfas (Giulia). He knows what he is doing. Many of you guys are in nostalgia syndrome ……..this is a new ball game
Personally, I think that Opel and Vauxhall don’t belong in the GM lineup, so why would their sale sway anyone either way? I don’t live in Europe, so I guess my opinion is probably fairly worthless, but still, Opels used to be sold in the US and they didn’t really make much of an impact, except for perhaps the Opel GT.