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Fiat ChryslerFiat

Fiat Chrysler Automobiles

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Fiat Chrysler Automobiles was created in 2014 from the merger of Italian industrial giant Fiat with Chrysler Group of the US. It is the latest stage in a long and often bumpy journey for both companies. Fiat has traditionally played a dominant role in the Italian economy. Roughly half of all cars on the road in Italy carry the Fiat badge, and the group once held a broad swathe of investments in other industrial sectors as well as the media. But the old order has changed. Fiat found its main car business under severe pressure in the early 2000s, largely as a result of its dependence on Europe in general and the Italian market in particular. Several attempts to bolster the business failed to prevent substantial losses, and the company came perilously close to bankruptcy. Fiat finally regained its stability by the end of 2007 and began looking actively at expansion into other areas, notably back to the US, a market it had quit altogether more than a decade earlier. The devastating problems experienced by Chrysler provided a perfect opportunity, and in 2009 Fiat was able to take management control of America's #3 carmaker. It spent the next few years negotiating to acquire the remaining shares as well, finally merging the two businesses completely at the beginning of 2014. The portfolio now houses US brands Jeep, Dodge and Chrysler alongside Italian brands Fiat, Alfa Romeo, Lancia and Maserati. The majority of Fiat's non-automotive interests were demerged at the beginning of 2011 into a separate company; luxury brand Ferrari was spun off in 2016. A deal was finally agreed at the end of 2019 with European competitor PSA Groupe, that will create the world's 4th largest auto manufacturer.

Advertising

Who handles Fiat's advertising? Click here for Agency Account Assignments for Fiat from Adbrands. The group declared advertising expenditure of €3.56bn in 2016.

Competitors

See Cars Sector index for other companies and brands

Brands & Activities

Fiat Chrysler Automobiles now comprises the mass-market Chrysler, Dodge, Ram and Jeep brands, sold primarily in North America (see separate profile), and Fiat, Alfa Romeo and Lancia in Europe and selected other international markets. It also houses the luxury brand Maserati. In 2017, the group was the world's 8th largest car manufacturer, behind Ford and Honda. It reported shipments of 4.74m vehicles in 2017, up marginally on the previous year. Though legally incorporated in the Netherlands, its main administrative office is located in neither Italy nor the US, but the UK.

The group's single biggest market by far is the US, with combined registrations of 2,076,960 vehicles in 2017. That figure was down around 8% on the year before, but FCA remained the overall #4 manufacturer behind GM, Ford and Toyota. However, the bulk of those sales were generated by Chrysler's existing local portfolio (see separate profile). The Fiat brand itself accounted for only 26,460 units. As recently as 2015, the group was also the single biggest manufacturer in Canada ahead of Ford and GM with combined sales of 294k. However, sales there have been in steep decline for the past two years. Volumes for 2017 were 268,336 units, putting FCA in 3rd place behind Ford and GM.

The group can still count upon its original heartland of Italy, where it is the dominant manufacturer by far. Combined sales of 560k vehicles in 2017 were more than double second-placed PSA, and the Fiat brand alone accounted for sales of 401k units, equivalent to more than 20% market share, and over three times the next biggest brand, Volkswagen. Lancia was the group's next biggest brand in Italy at just over 60K, followed by Jeep (49k) and Alfa Romeo (45k).

Sitting some considerable way behind is Brazil, a long-established cornerstone market for Fiat, which was at one time Brazil's best-selling car by a considerable margin. In 2012, for example, Fiat sold more than 838,000 cars there. However, sales for all manufacturers in Latin America collapsed during 2015, and what is now FCA has recovered less quickly than its main rivals. As a result, the Fiat brand was overtaken in 2015 by Chevrolet, and the combined FCA portfolio was surpassed by GM in 2017. Focus2move estimated combined group volumes of just 383k for FCA in 2017, less than half past highs, and some 10,000 units behind GM.

China rounds out the company's Top Five with 176k units in 2016, followed by Germany 97k, the UK 84k and Argentina 79k.

Though the largest share of FCA's sales volumes are now generated in North America, the spiritual home of Fiat will always be Italy. In corporate terms, Fiat's influence in its home country is unparalleled. At its peak in the late 1960s, the group accounted for as much as 20% of all Italian industrial activity. The nation's dependence on the company has reduced considerably since then. Fiat is still Italy's biggest industrial group, but by 2004 it represented only around 3.5% of Italy's GDP. Yet it was still regarded as a barometer of the health of the country's industrial sector. This made Fiat's recent predicament all the more serious. Between 2001 and 2005, for example, Fiat Auto accumulated losses totalling almost €8bn. In 2005, the group finally began to climb out of the financial hole it had been in for five years, but despite exceptional performance in 2007, some concerns still remained. The Fiat automobile brand has widespread recognition, but it faced a fiercely competitive market. Geographical coverage was also weak, leaving the company overly reliant on Italy, hardly the most robust of economies. It was that weakness which prompted the tie-up with Chrysler, which gave the enlarged group a much stronger global footprint.

The main Fiat marque now covers around six core models, cut back from around 16 models in the mid 2000s. The group describes the brand as a symbol of "creativity, versatility and practicality". The Panda small car was relaunched in 2011 with a new design, and the Punto was refreshed for 2012. Combined Fiat brand volumes in 2017 were 1,636,636 cars, up around 7% on the year before, and ranking among the top 15 brands globally. The portfolio is dominated by the revamped Fiat 500, the top-seller by far worldwide, with around 260k units sold in 2015, split between seven different variants.

Alfa Romeo is positioned as a more stylish and sporty marque, but its model range has entirely over-hauled and pushed upmarket. Key older models such as the 156 and 166 have been eliminated in favour of the Mito, launched in 2009 as a rival to BMW's Mini, while the Spider has transferred into the Fiat brand portfolio. Mito is accompanied by the Giulietta sedan and 4c luxury racer, the Stelvio - its first SUV, launched in 2017 - and Giulia sportscar. Total sales in 2017 were 98,000 units, mostly in Europe (apart from 12,000 in the US) and around half in Italy. A third brand from the old Fiat portfolio is gradually being phased out. Lancia was originally positioned as an elite premium brand, "elegance with attitude", broadly equivalent in stature to the likes of BMW and Mercedes. However its various models have been gradually mothballed to protect sales of equivalent car types within the Fiat and Alfa Romeo portfolios. By the beginning of 2017, there was just one model left in the Lancia portfolio, the three-door hatchback Ypsilon. Total sales for 2017 were around 60,620 cars, all in Europe and mostly in Italy.

A fourth marque, Abarth, originally the group's motorsports division, was relaunched in 2008, offering customised sports performance models of existing Fiat models such as the Grande Punto and 500. Fiat's light commercial vehicles are marketed under the Fiat Professional banner. It is by far the leading brand in this segment in Italy with more than 42% share of the market, and almost 12% across Europe as a whole. Key models include the well-established Ducato and smaller Scudo, named as Van of the Year for 2008. The group also has a financial services unit run as a joint venture with Credit Agricole of France.

The group reports financial results for all its mass-market vehicles under a single umbrella heading. Combined revenues in 2017 were €100.05m.

Luxury sportscar manufacturer Maserati operates as a separate division, competing most directly with Porsche and top level models from BMW, Mercedes and Audi. It sold 40k cars in 2016. The US and China each account for around 30% of unit sales. Revenues from this division were €4.06bn in 2017, with EBIT of €560m.

Until the beginning of 2016, Fiat had also controlled super-premium sportscar brand Ferrari for almost 50 years, competing with marques such as Lamborghini, Bentley and Aston Martin. Fiat originally acquired a 50% stake in the storied supercar brand in 1969, raising that holding to 90% in the late 1980s. (The Ferrari family retained the remaining 10%). Fiat reduced its shareholding again in 2002, selling a 34% holding to a consortium of bankers led by Mediobanca in order to raise cash. It reacquired most of those shares in 2006, building its stake back to 90%. Unit sales are low, reflecting the high price of the cars. However, Ferrari was FCA's single most lucrative business by operating margin. In 2015, FCA began the process of spinning off Ferrari as a separate business, issuing an IPO of 10% of equity. The remaining 80% was spun off to shareholders (including the Agnelli family's private investment vehicle) at the beginning of 2016. In 2017, Ferrari sold 8,398 cars, generating revenues of €3.42bn and net profit of €537m.

The group controls a number of components and secondary manufacturing businesses. Fiat Powertrain Technologies (FPT) was established in 2005, following the break-up of the engine and transmission manufacturing partnership with GM, and now operates 26 factories in 12 countries. Teksid specializes in the production of metal automotive components, sold primarily under the Teksid and Meridian brands. The company is one of the world's leading producers of engine blocks, cylinder heads and instrument panels. Comau is a supplier of industrial automation systems to automotive manufacturers. Combined external revenues from these divisions were €6.63bn in 2017. In 2018, FCA announced plans to spin off its components division Magneti Marelli to its shareholders; it eventually agreed to sell the business instead to Japanese rival Calsonic Kansei Corp for $5.8bn.

Financials

For its final year as a single entity in 2010, prior to the split-off of Fiat Industrial, Fiat Group reported revenues of €56.3bn, up 12%. Net profit bounced back into the black with a surplus of €600m, after an €848m loss the year before generated by substantial impairment charges. For 2011, following the divestment of Industrial and excluding Chrysler, Fiat SpA reported revenues of €37.4bn, up 4%, and a net profit which increased almost fivefold to just over €1.0bn. Including the six-month contribution from Chrysler, total revenues were €59.6bn, generating a net profit of €1.65bn. (Combined full year revenues for the two companies were around €75bn, and combined profits were €2bn). The boost from Chrysler Group came at just the right time: Fiat's revenues from Italy slipped by 5% during the year to almost €9.3bn, and were further dented during 2012 by the country's worsening economic problems.

For 2013, consolidated group revenues rose 3% to €86.82bn. Net profit more than doubled to €1.95bn because of Chrysler's one-off tax accounting charge. Excluding that exceptional gain, profit slipped 17% to €943m. Excluding any contribution from Chrysler, the core Fiat Group would have reported revenues of €35.59bn and losses of €911m, up from restated losses of €787m in 2012.

Following the merger of 2014, the new Fiat Chrysler Automobiles corporate entity was created with a legal headquarters in the Netherlands. However, its principal administrative base in in London. Revenues for 2014 rose 11% to €96.09bn. EBIT and pretax profits both increased year-on-year, but the net result plunged by two-thirds to €632m as a result of a large tax charge. The previous year benefited from a large tax writeoff.

Revenues for 2015, the group's first full year of operations, jumped by 18% to €113.19bn. However a host of extraordinary items made a significant dent in net profits, which took another near-60% tumble to €377m. However, a huge proportion of that sum was contributed by Ferrari, with the result that net profit from continuing operations was just €93m. Excluding exceptionals and Ferrari, adjusted EBIT was up over 40%. The North America, or NAFTA, region was the biggest contributor by far to both revenues and profits, accounting for 62% of revenues and approximately 84% of profits.

Despite volume declines in several of its key brands, Fiat Chrysler Automobiles nonetheless posted spectacular profit growth for 2017, and actually beat arch-rival Ford on margins. Revenues continued to slip back, falling to €110.9bn, but net profit almost doubled to €3.5bn. That included some gains from tax reform, but even excluding those items and other one-off charges, EBIT was up by 16%. Group profit margin was 6.5% compared to a weak 5% at Ford for 2017.

Revenues for 2019 were €108.2bn with net profit of €2.7bn.

Exor & other activities

Although its shares are publicly traded, the company is still controlled by the Agnelli family. They are as close as Italy gets to royalty, and patriarch Giovanni Agnelli was famed for his tendency to act accordingly. ("We have annexed a weak province," he said grandly when Fiat took over Alfa Romeo in 1987). The family controls an equity stake of just over 29% in Fiat Chrysler (but 42% of voting rights) through holding company Exor, formed in 2009 from the merger of two separate investment businesses IFI and IFIL. In addition to its holding in FCA, Exor also has a majority shareholding in Italian football team Juventus, as well as smaller investments in numerous other businesses. In 2015, Exor raised its stake in business media and intelligence group The Economist from under 5% to a dominant 43%, following the sale by Pearson of its 50% holding (though it has only 20% of voting rights). Following the spinoff of Ferrari from Fiat Chrysler, Exor became the single largest shareholder in the now-independent business with around 23% of equity (but 33% of voting rights).

Exor is also the controlling shareholder in CNH Industrial, the separate company formed in 2010 from the demerger of the old Fiat Group's industrial operations. Case New Holland is the world's #1 manufacturer of agricultural tractors and combines, and the third largest maker of construction equipment. It was created in 1999 from the merger of New Holland and US company Case Machinery, acquired earlier that year for $4.3bn. CNH agricultural products are sold under the Case, New Holland and Steyr brands. Construction equipment is sold under the Case, FiatAllis, Fiat-Hitachi, Kobelco and O&K brands. The heavy trucks business operates under the banner of Iveco. It is one of Europe's largest producers of commercial vehicles, formed in 1975 from the merger of five separate European brands. Combined revenues in 2017 were $26.2bn.

Until recently, Fiat Group had also owned a significant publishing and communications division, best-known for La Stampa, Italy's third biggest non-specialised national circulation newspaper; and Publikompass, one of Italy's largest sellers of advertising space under license, working mainly for regional newspaper and cable television clients. In 2016, both businesses were merged into the company behind rival newspaper La Repubblica to form Gruppo GEDI, under the control of the De Benedetti family. Exor retained a small shareholding. Fiat had also held a controlling 17% stake in Italy's RCS Mediagroup, publisher of quality newspaper Corriere della Serra and top-selling sports paper Gazzetta dello Sport. These shares were distributed to shareholders in 2016, and RCS became the target of a hostile takeover by rival media tycoon Urbano Cairo, through his Cairo Communication vehicle.

Management

Prior to the Fiat Chrysler merger Sergio Marchionne was CEO of both companies, then became group CEO of Fiat Chrysler Automobiles. In July 2018, however, he died unexpectedly following what were originally thought to be complications resulting from surgery on his shoulder. It was subsequently revealed that he had been receiving treatment for more than a year for an unspecified serious illness. He was succeeded as CEO by Michael Manley, previously COO, Asia Pacific & head of global Jeep & Ram.

Luca Cordero di Montezemolo stepped down as chairman of Fiat Group in 2010 (although he remained chairman of Ferrari until 2014). He was succeeded by John Elkann, grandson of former Fiat patriarch Giovanni Agnelli, who had for several years been groomed for succession. Elkann is also chairman of the family investment company Exor. Another grandson, Andrea Agnelli, also sits on the Fiat and Exor boards, as does Giovanni Agnelli's nephew Tiberto Brandolini d’Adda. Another scion of a wealthy family on the board is Valerie Mars, of the Mars family. The fashion designer Ermenegildo Zegna is also a director.

Background

The company Fabbrica Italiana di Automobili Torino, or FIAT, was founded in 1899 by a group of 30 shareholders, headed by entrepreneur Giovanni Agnelli. The company inaugurated its factory the following year, turning out 30 models of a 3.5 horsepower two-seater vehicle which travelled only forward -- there was no reverse gear. Two years later, the company launched a 24 horsepower model, the 24HP Corsa. By the time the 40 horsepower model launched in 1906, the business had expanded rapidly, even beginning to export models to the United States. As the power and range of Fiat's cars expanded, the company also turned its attentions to other vehicle lines, including trucks, railways and buses. To support his growing powerbase, Agnelli took a stake in Turin daily newspaper La Stampa in 1920, buying it outright six years later.

By the early 1940s, Fiat was one of Italy's three biggest companies, but its factories became a target for allied bombing during the first half of Second World War. Founder Giovanni Agnelli died in 1945, but under American occupation much of the group's business was rebuilt, and Fiat became an important force in the postwar reconstruction of Italy. By the 1960s, however, the company was feeling the pinch from imported cars, and it began to develop its international distribution. Under the control of the founder's grandson, Giovanni ("Gianni") Agnelli II, nicknamed "L'Avvocato" (the lawyer), the company established manufacturing plants in Russia, Poland and Brazil and broadened its portfolio with the acquisition of Lancia and Ferrari in 1969. Political problems ensued in the 1970s. The group sold a 10% stake to Libya's Colonel Gadaffi in 1976 (most of which was repurchased ten years later), and several top executives were targeted by Italian terrorist group Brigado Rosso. In 1979, Fiat merged its various domestic car businesses as Fiat Auto.

In the early 1980s, the company endured a series of crippling strikes, and took the decision to pull the Fiat brand out of North America in 1983. However the launch of the Fiat Uno the same year began a turnaround in the company's fortunes. A proposed merger with Ford in 1985 failed to come to fruition, but Fiat combined its truck operation with part of Ford UK to form Iveco. (In a controversial move in 1997, Iveco closed its UK factory, moving production to Italy). A similar deal in the US in 1991 brought together Ford and Fiat's agricultural businesses to create New Holland.

During the 1980s and 1990s, Fiat built its portfolio, absorbing troubled state-owned Alfa Romeo in 1987 and Maserati in 1993. But a domestic slump in car-buying took its toll on the company, which tumbled into huge losses the same year. A massive restructuring led to 75,000 job losses. Agnelli stepped down as chairman in 1996, but the untimely death of his nephew and heir apparent in 1997, as well as corruption charges against the company's managing director Cesare Romiti and its finance director, led to a temporary power vacuum. This was later filled by former General Electric executive Paolo Fresco.

Early in 1999, Fiat opened talks with Volvo. The Swedish company was interested in selling off its passenger car division, but Fiat declined, saying it wanted to buy out the whole group. Instead Volvo's board sold the car business to Ford, and raised further funds by selling a minority shareholding in its remaining trucks business to Renault. Meanwhile Fiat's car division slipped into losses in 1999 and 2000 as a result of price competition in Europe. As the pace of consolidation increased in the auto industry, the spotlight finally fell on Fiat when rumours emerged that the group was in discussions with what was then DaimlerChrysler. According to speculation, Fiat was considering the sale of its passenger car division in order to concentrate on trucks and agricultural machinery. However in 2000, it was General Motors not Daimler who won Fiat's hand. The two groups swapped shareholdings, with GM getting a 20% stake in Fiat in return for 5% of its own shares. (Fiat sold its GM shares for around $1bn in 2002). Significantly, Fiat Group also negotiated a "put" option allowing it to force GM to buy the rest of Fiat Auto after January 2004. Meanwhile the two companies also formed joint ventures to manufacture car and train engines and other components.

A few weeks later Fiat Group consolidated its own position by buying back previously floated minority stakes in insurance business Toro Assicurazioni and its Magneti Marelli car components company. It then began breaking up the Marelli business, selling off its various divisions, as well as a controlling stake in its railway stock business Fiat Ferrovia. The following year, Fiat consolidated its grip on Italy's commercial infrastructure with an audacious takeover of Montedison, an Italian group with substantial interests in energy and agribusiness. At the time Montedison was the key industrial interest of Italian investment bank Mediobanca, a long-time rival of Fiat Group. Electricite de France, the French state-owned utility, held a 20% stake in Montedison, but was effectively barred by the Italian government in 2000 from making a full bid. Instead it swapped its shares for the second largest stake in a newly formed consortium, Italenergia, controlled by Fiat. Italenergia bid around $5.5bn to acquire a 52% stake in the target group, taking management control, and renaming it Edison after its principal business. In 2001 the group bought out the 50% share held by partner Renault in bus manufacturer Irisbus and also opened negotiations (ultimately unsuccessful) to buy DaimlerChrysler's aero-engine subsidiary MTU.

However, the group's performance was suddenly rocked at around the same time by sharp declines in its core automobile division, in its two most important markets of Italy and Brazil. It was the beginning of a series of crises that brought the group close to collapse over the next five years. Fiat Group's share of the Italian new car market dropped below 33% for the first time in its history during 2002 (from over 52% at the end of the 1980s), and sales continued to fall during the course of that year. A major contributing factor to the 2000s slump was a poor response among consumers to the Fiat Stilo, introduced in 2002 as the much-heralded replacement for the Fiat Brava. Sales were far below the projected level, taking the company almost completely by surprise. Other launches were distinguished largely by their unattractive designs, such as the spacious but ugly Multipla. Shocked by the public response to its cars, Fiat launched a strategy to update the rest of its ageing portfolio with a series of new and restyled models, but the process was slowed considerably by the group's multiple layers of bureaucracy. At the end of the year the group unveiled a restructuring involving 6,000 job losses and production cuts at 18 plants, as well as a change of management. Shortly afterwards Fiat reported a group loss, its first since 1993.

In 2002 the group sold a sizeable stake in Ferrari to Italian bank Mediobanca in order to raise cash. However the deal came too late to save group CEO Paolo Cantarella, who was forced out the same month. As losses continued to deepen, the group began crisis talks with the Italian government to save jobs. Eventually it announced it would lay off 20% of its Italian carworkers in what was seen as a symbolic disaster for Italian industry. Protracted talks ensued with unions and the government in a bid to save these jobs. However Fiat's financial situation continued to worsen in the meantime. The deficit for 2002 was initially expected to exceed €1bn. In the end it quadrupled to more than €4bn as managers took the opportunity to cut back huge chunks of over-inflated value.

During 2002, entrepreneur Roberto Colaninno, best-known for his hostile takeover of Telecom Italia, announced plans to mount a similar assault on Fiat. The Agnelli family strongly opposed any such bid and used all their political influence to persuade the Italian government to prevent any takeover. However these wrangles were abruptly overshadowed by the death of Gianni Agnelli in January 2003 after a long battle with prostate cancer. He was succeeded as group chairman by his younger brother Umberto.

Forestalling any further takeover bids, Fiat's board announced plans to recapitalise Fiat Auto. The group pumped in €3bn of additional cash, much of it from other family resources, and called on 20% shareholder General Motors to supply the rest. The American company, now increasingly nervous at the prospect of being forced to buy out the rest of Fiat, declined and saw its shareholding reduced to 10%. As Fiat's sales continued to slide, GM began threatening a law suit to dispute the "put" option. To appease its American partner, Fiat agreed to postpone the start of the option period to 2005. Sadly, these talks were followed in June 2004 by the death (also from cancer) of executive chairman Umberto Agnelli, less than two years after his older brother.

In December 2004, with the put option deadline looming, the two sides went back to court. GM attempted to get off the hook, arguing that the original deal was invalidated by contract violations. Fiat was equally determined to keep the option open. Finally, the American company agreed to pay Fiat €1.56bn in 2005 to be released from its contractual obligations. In order to raise more cash, the group had sold off several other important assets in 2003 and 2004. Toro Assicurazioni, Italy's #4 general insurance group, was sold to De Agostini for €2.4bn; FiatAvio, which developed components for airplane and helicopter engines, to private equity group Carlyle Group for €1.7bn. In 2005, Fiat exercised an option to sell its 25% shareholding in Italenergia, Italy's second largest energy company, to EDF of France. The group has also sold majority stakes in various financing and real estate development units.

By now, though, a concerted effort to rebuild the popularity of the core Fiat auto brand had begun to win traction. Key to this recovery was the retro-styled relaunch of the group's classic sub-compact 500 car. Voted Car of the Year for 2008, this model more than any other, with a concept inspired by the success of the redesigned Mini and VW Beetle, rehabilitated Fiat's global reputation, and prompted a surge in sales in international markets.

The fruits of all this hard work began to be seen during 2006 and resulted in strong performance during 2007. As a result, with the Italian market now in recovery, the group began to pay close attention to other markets. Fiat's past troubles had been exacerbated by its overdependence on just a few markets. From 2007 onwards the group set about reducing this reliance on old markets by establishing alliances with other partners. In 2007, it unwound an existing and largely unproductive joint venture in China with Nanjing Automobiles to agree a new partnership with local manufacturer Chery, which began production and distribution of Fiat, Alfa Romero and Chery brand vehicles from 2009. A separate partnership was agreed that year with Guangzhou Automobile Group. There was also a cooperation agreement with PSA Peugeot Citroen to build light commercial vehicles for the European market, and a similar partnership with Ford developed two subcompact city cars in 2007 and 2008. Fiat also formed partnerships with Severstal and Sollers to manufacture and market Fiat cars in Russia, and with Tata Motors to sell the brand in India (until 2012).

However the most significant change to Fiat Auto's profile was the creation of a close and binding alliance with US group Chrysler. The gradual recovery of Fiat's existing operations by early 2008 had already encouraged the group to open preliminary discussions with potential partners about the reintroduction of its cars in the US. The problems faced by US auto manufacturers during 2008 assisted these talks considerably and in January 2009, the group unveiled the outlines of a tentative alliance with struggling Chrysler. After several months of negotiation with Chrysler's shareholders and the US government, which had by then taken effective control of the business, a deal was finally thrashed out during June. As a result, the government agreed to extend Chrysler's cash lifeline and Fiat took charge of a 20% stake and management control of the American company. At around the same time, Fiat Group took steps to streamline its automobile operations by spinning off its remaining heavy truck and construction machinery operations into separate company CNH Industrial.

The effective takeover of Chrysler Group in 2009 allowed the Fiat brand to make a long-awaited return to the US. The Fiat 500 launched in the US in 2011, although initial sales fell well below target. It also gave Fiat the ability to market the US manufacturer's vehicles in Europe and other international territories. The timing of the Chrysler takeover couldn't have come at a better time, coinciding with a renewed economic slump across Europe, and especially Southern Europe. As Fiat's performance at home and other European markets nose-dived once more, the simultaneous upsurge at Chrysler helped to support the Italian group's financial stability.

Fiat's shareholding in Chrysler group increased several times during the first half of 2011, reaching 46% by May. Following repayment of Chrysler's outstanding debts to the US and Canadian governments, Fiat had amassed a stake of 58.5% by the beginning of 2012. The remaining shares were controlled by Veba, a healthcare trust for UAW workers. Fiat spent the next two years negotiating to acquire the outstanding stock to allow a full merger with Chrysler, but the two sides disagreed on the price of the shares. An agreement was finally announced at the very beginning of 2014, whereby Fiat would acquire the remaining 41.5% of equity for $4.35bn, much of which was drawn from Chrysler's own cash reserves. The deal finally completed towards the end of January 2014. At the same time, Fiat's board has seized the opportunity to reduce its dependence on Italy's troubled economy, injecting the existing Fiat SpA entity into newly created Fiat Chrysler Automobiles, which is a Dutch company, resident for tax purposes in the UK, but with its primary stock market listing in the US. This complicated transaction finally completed in October 2014.

Last full revision 2nd February 2018

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