Is Volkswagen really in discussions to buy Fiat Chrysler Automobiles? Now there’s a deal that would reshape the global automotive landscape, and quickly. And consider the consequences for Sergio Marchionne’s resurgent Chrysler Group, which has just embarked on a strategy to radically grow sales by the end of the decade.
If it happens, and the parties do deny the report by a German magazine, it’s because the fixations of Ferdinand Piech may line up perfectly with the needs of the family that controls Fiat Chrysler. A source inside the VW supervisory board chairman’s inner circle says Piech has a grand plan that goes beyond his success in building Europe’s No. 1 automaker.
Analysts swung into action last week after Manager, the German business magazine, reported that VW has held talks with Fiat Chrysler’s owners about purchasing the Italian carmaker. “The simple deal logic is straightforward,” London-based analyst Arndt Ellinghorst of ISI Group wrote in a note to investors. “Chrysler — better Jeep and Dodge — could fix VW’s U.S. problems; Alfa could replace the ailing Seat brand; Fiat Europe is basically the 500 product family plus LCVs; Latin America could be sold, potentially to a Chinese buyer.”
With the Volkswagen Group currently controlling almost a dozen brands, including the likes of Audi, Bentley, Bugatti, Ducati, Lamborghini, and Porsche, there are also rumblings the auto giant may rebrand itself the Auto Union, a German automaker founded in the 1930s when four separate brands came under the one roof.
The Auto Union, which originally consisted of the brands Audi, DKW, Horch, and Wanderer, managed to survive World War II but was bought by VW in the 1960s and eventually transformed into present-day Audi.
Piech wants to do it sooner rather than later. But with VW battling head-to-head with Toyota and General Motors to be No. 1 in the world, the obsessively driven 77-year-old needs a shortcut. Acquiring the Agnelli-Elkann family’s 30 percent controlling stake in FCA would give Piech his Auto Union. With more than 14 million sales a year, it would leave Toyota and GM fighting for second place, 4 million units behind.
A spokesman for VW said he was unaware of any plans to resurrect the name or change the current VW Group title. And rumors of the VW Group rebranding itself the Auto Union dates back all the way to 2004, so take this latest rumor with a grain of salt. Read more about the story here.
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