Fiat-Chrysler strategy outlined

However, it is still unclear how Fiat's control of Chrysler will affect Chrysler Australia's local operations.  Fiat chief executive, Sergio Marchionne, has just outlined an extensive product-sharing strategy.

Fiat engines are destined for Chryslers and there is even a possibility of Chrysler-branded Lancias arriving in Australia.  Chrysler emerged from bankruptcy last June when Fiat took a 20 percent stake in the ailing company.

Marchionne sees 2010 as a year of rebuilding confidence in Chrysler in North America and other markets.  He is also laying foundations for the reintroduction of Fiat and Alfa Romeo brands to the US.

Marchionne told journalists at the recent Detroit Motor Show that there is an opportunity to rebadge Italy's premium Lancia brand as Chryslers.
He recently unveiled a Lancia Delta hatch wearing a Chrysler grille and badge at the recent Detroit Motor Show.

However, Ateco Automotive currently holds the rights to distribute Lancia in Australia but would not cover Lancia cars built and sold as Chryslers.  Ateco is already the country's largest distributor with a portfolio that includes Alfa Romeo, Maserati, Fiat and Ferrari - all Fiat brands - as well as Citroen and Great Wall Motors.

Changes are already occurring at Chrysler Australia.  It is about to move in with Fiat-owned truck brand Iveco in Dandenong from its current headquarters in the Mercedes-Benz compound at Mulgrave.

In Europe, Lancia is considered an up-market brand but it has not been sold here in any form since the 1970s.  The Delta uses four-cylinder petrol and diesel engines for the European market ranging in size from 1.4-litres to 2.0-litres.  It, like the smaller Ypsilon, are both engineered for right-hand drive.

The Ypsilon shares its mechanical package with the Fiat 500 and Punto.  Apart from the Delta and Ypsilon, Lancia also builts the Musa MPV and seven-seat Phedra.

The Fiat chief is already streamlining expensive powertrains and platforms across the Fiat-Chrysler group.  The US-carmaker has already announced that it will take some of the latest-generation four-cylinder engines from Fiat.

"Many new Chrysler cars will soon be built on Fiat platforms," he says.  "Fiat engines will appear in many Chrysler vehicles too."

Chrysler is about to start building Fiat's 1.4-litre FIRE engine in Michigan to go into smaller Chryslers.  It will also use Fiat's new six-speed dual clutch transmission in its mid-size cars.

"We are combining Fiat's expertise in the smaller car segments with Chryslers in the medium and large segments. And most important, we are achieving economies of scale that will generate substantial benefits for us both," Marchionne says.  Chrysler Australia managing director, Gerry Jenkins, was unavailable for comment.