08.09.2005 Reports today claims that Fiat is set to collaborate with Ford on production of a new small car

Reports today claims that Fiat is set to collaborate with Ford on the production of a new small car.

Handelsblatt - a German financial newspaper - started the ball rolling this morning by claimed that that Fiat and Ford are already deep into talks that will see the two setting up a new collaboration to produce a new 'small' car. It quoted unnamed sources involved with the negotiations - as stating that "the talks are already far along." The story quickly exploded, and by lunchtime today, highly respected financial news service, Reuters, had weighed into the equation by stating that "a person familiar with the matter" had confirmed the rumours.

Ever since Fiat and General Motors terminated their joint venture 'Powertrain' project back in February, the Italian firm has been casting around in an effort to find new partners to share new model development cost burdens, and to make fully use of their chronic overcapacity in their Italian factories. New CEO Sergio Marchionne has made this a key cornerstone of his plans to revive Fiat's fortunes.

On Tuesday - during the launch of the new Fiat Grande Punto model in Turin - Marchionne stirred the rumour pot by stating that a new manufacturing alliance would be announced before the end of the year. "By the end of 2005 we will announce the first of Fiat's targeted alliances," he told the assembled reporters, before swiftly squashing widespread speculation that it would be with an Eastern-based car manufacturer, adding that "the industrial alliance will not be with an Asian company."

Speculation immediately turned to the giant DaimlerChrysler carmaker - who had been interested in Fiat Auto at the same time as GM had moved closer at the turn of this decade - as a potential stategic partner, possibly through their 'Smart' lifestyle brand. However, on Wednesday a spokesman for the US-German carmaker firmly ruled any new alliance out, telling Reuters, "
that is absolute nonsense."

Fiat Micro

Fiat CEO Sergio Marchionne announced in early August that Fiat would build a new 'city car', a successor to the legendary historic 500 model in time for a launch during 2007


Also, in an interview with Repubblica Radio yesterday, Fiat Group Chairman Luca di Montezemolo confirmed that the Italian firm was seeking partners in the areas of production, purchasing and distribution, and he ratcheted up interest in the new alliance by telling the station's listeners: I hope that Marchionne can announce one very, very soon."

Marchionne announced back in early August that Fiat would build a new 'city car' - a successor to the legendary historic 500 model - in time for a launch in 2007, and with Ford lacking a contender in the European 'micro' segment an alliance between the two could prove a positive step forward.
 

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2005 Interfuture Media/Italiaspeed