By on July 17, 2014

Ferdinand-Piech

German business publication Manager Magazin is reporting that Volkswagen could be interested in acquiring Fiat. The Agnelli family, which controls the industrial conglomerate, is apparently looking to exit the volume car manufacturing business.

According to the article, the Agnelli family would retain Ferrari, while Volkswagen would benefit from Chrysler and its associated brands by giving it a foothold in America, where it has traditionally struggled. VW CEO Ferdinand Peich has long coveted Alfa Romeo, though it’s unclear what would happen to FCA’s other brands.

Any deal would be faced with a number of obstacles, including financial issues and inevitable consolidation of the respective brand portfolios. But the Agnelli family’s desire to exit the volume car manufacturing business is a wise one, given the constantly shaky market conditions in Europe, their exposure to the hardest hit regions of that continent and the massive overcapacity crisis currently plaguing its assembly plants. By contrast, Ferrari is a license to print money, generating enormous profits from its merchandising arm alone. Sergio Marchionne has long said that economies of scale above 6 million units are required to survive in this next era of the automotive business – this may be the most expedient way for him to achieve that goal.

 

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155 Comments on “Volkswagen Interested In Buying Fiat...”


  • avatar
    VoGo

    Two words: Hellcat GTI

  • avatar

    Derek, I think Maserati is technically owned by Ferrari, which suggests that it would stay with the Agnelli clan, but as you say there’s no real word yet.

  • avatar
    Lie2me

    No, no, no! It’s bad enough that Jeep is now Italian please don’t make it an Italian Bug

    • 0 avatar
      highdesertcat

      Well, this would be an ideal acquisition for VW in their quest to become the planet’s largest automaker. What would be sad is to see the excellence that Sergio has put together morph into the crap that is VW.

      So from a business perspective, smart move, IMO. From my personal point of view? Meh! I’m trading off the Grand Cherokee at the end of this year anyway and going back to Toyota by buying a Sequoia to replace it.

      • 0 avatar

        Hey highdesertcat. It makes some sense from an American point of view, not much from everywhere else. Those idle Italian factories? Would become VW’s burden as well as all the workers. Not to mention the overlap in lines and presence in markets outside of Europe. VW buying Fiat is not the case of 2+1=3. It could well be 2+1=2.2 or something like that. Fiat buyers would not automatically buy a German Fiat. Many would look elsewhere.

        • 0 avatar
          highdesertcat

          Hey Marcelo! Everything you wrote is valid. No dispute there.

          But from a VW business perspective, IOW the interest of their shareholders, owners and heaviest investors in the German national economy, expansion makes sense.

          One of the ways to realize or see expansion is to acquire and broaden an ongoing concern. If VW can take over FCA, it would be a huge step in the direction which VW has chosen to take for global dominance.

          This may not happen. At this juncture it is still a bit early to tell how the cookies will crumble.

          But if it does happen, the concerns you raised will be dealt with, just like Bochum, Opel and other overages that fell victim to the global auto industry shakeout.

          (My sympathies about the Copa Mundial)

          • 0 avatar

            Hey highdesertcat, thanks! But actually, I’m glad for the score. It highlights the needs for some major overhauling of our national sport that has been long overdue. If we had lost by a normal margin, the problems would have been more easily swept under the rug.

            As to VW, I also can’t dispute anything you say and you are correct. However, it would be a very expensive thing that would take a long time to shake out. If Chrysler becomes bigger and ever more profitable, they could tip the balance in favor of a deal. The way it stands I see the cons as outweighing the pros. There are easier, smaller fish out there for VW to swallow up and digest.

          • 0 avatar
            highdesertcat

            Marcelo, and you are right about the cons outweighing the pros, based on where an analyst stands on the issue.

            So, it is up to VW management, in conjunction with their forecasters and financial analysts, to sit down and determine which course of action to follow IF this take over actually comes to fruition.

            Don’t forget, this take over would also affect national economic policy, both in Italy and Germany.

            But the fact that VW is even considering this at this time, as they have in the past, means that for VW, its shareholders and the German government, there are more pros than there are cons.

            I doubt that VW or any automaker would propose a venture if it is ill-advised. What we see now are just the “feelies”. VW is tickling the market and the industry to see how receptive they are to such a take over. In the past, it did not work out in VW’s favor.

            But with all that has happened, this time it might. It just might.

            Remember that to me it doesn’t matter if it happens or not. I’m trading my wife’s 2012 Grand Cherokee at the end of this year for a 2015 Sequoia, which may be the last car she ever gets, due to her age, and number of years left driving herself.

          • 0 avatar
            RobertRyan

            @highdesertcat,
            Then you would have Scania, MAN, IVECO, Fiat and VW Commercial under one roof. It would be a huge Trucking business

  • avatar
    bobman

    I would be very surprised if this transaction is actually executed. In fact, representatives from Exor have already denied any discussion has taken place. Also, it just doesn’t make any sense considering other activities that have already taken place or are a schedule to happen soon.

    There have been statements from financial publications that FCA’s future value could greatly exceed the current value in the very short term. I can’t believe that the Agnelli family would leave that payout on the table for Volkswagen. Also, I think there would be a political outcry in Italy opposing the sale.

    • 0 avatar

      Agreed, little business sense and no one is actually talking about this. I think think this is just the Germans feeling powerful after winning the World Cup and making a show of strength. (sarcasm)

      • 0 avatar
        bobman

        +1
        Ah yes, the world cup. Perhaps rubbing salt into Italy’s wounds because of their early exit. I don’t know why your boys had trouble with them, Italy regularly beats them. Last time it caused Klinsman to have a temper tantrum and lose his bottle. :)

        • 0 avatar

          Oh well, we regularly beat them too. Our historical advantage over them is immense. I’m guessing to much pressure, old style game plan and too many good but not really exceptional players. Humbling experience and hopefully they’ll be able to make a lemonade out of that lemon. Italy’s early exit completely surprised me and was a shame as Prandelli was really improving and modernizing Italy’s game. Hopefully, you won’t retreat into the old style catenaccio.

          • 0 avatar
            marjanmm

            Brasil, decime qué se siente? Haha, just joking Marcelo, though the 7:1 match was one of those rare times when the whole world just stops and stares in disbelief.

          • 0 avatar

            Yeah, disbelief at how bad we looked. I for one expected Germany to win. They also changed the song, “Brasil, decime qué se siete…” Well deserved. Argentina should’ve beat Germany. 3 real chances before the German score. Had any gone in, Argentina would be on top of the world now.

      • 0 avatar
        FreedMike

        Marco, maybe they’re after more lebensraum…

    • 0 avatar
      hreardon

      Quite the contrary: Volkswagen has the resources to invest in FCA whereas the Agnelli family does not.

      This is not to say that there wouldn’t be “redundancies”, but Volkswagen and Audi factories are currently running at full tilt: this would provide them with some needed capacity.

      • 0 avatar
        Vulpine

        “Quite the contrary: Volkswagen has the resources to invest in FCA whereas the Agnelli family does not.”
        If they have such resources, why are they scrambling so hard to cut costs? Volkswagen’s reputation for quality in the States is severely hurting and it’s not JUST because their most popular model here is built in Tennessee.

        As I understand it, this is far from the first time that VW has attempted to buy Fiat and I believe Fiat itself has tried to buy VW more than once. Effectively they are direct competitors in the European market and now that Fiat has included the Chrysler portfolio many of the Chrysler rebadges are selling better than anybody expected as many Chrysler-based models carry the Maserati brand.

        But, that also means that should VW make that purchase and if Maserati is a Ferrari-owned brand, certain divisions would need to be worked out where Chrysler itself would stay with Maserati-Ferrari while VW MIGHT get the rest. Still, I find it highly unlikely because Jeep and RAM both are working remarkably well to support Fiat itself AND that the new Jeep vehicles in particular are proving surprisingly popular in Europe–maybe more popular than VW wants to accept.

        Meanwhile, FCA is now or will shortly be a public company, listed on both New York and European stock exchanges. Volkswagen could, by dint of a massive stock purchase at the IPO, end up buying FCA right out from under the current owners. But that would also jack up the value of the company far beyond realistic levels, making it impractical for them to do so. I also expect they would find heavy competition on such an effort as outside investors will want a piece of that same pie. VW might not manage the 51% buyout to achieve control at which point they would have to decide to hold on and attempt to build to that 51% or take what profit they can and re-sell while the price is still high. There are simply too many variables to make any coherent call based on the VERY speculative argument presented in this posting.

  • avatar
    thegamper

    That would be interesting. I suspect that if VW were to do that, there would eventually be a killoff of a few brands. Even the Fiat brand may not be safe in the long run. Dodge would be the most likely, Chrysler and Fiat eventually sell rebadged VW’s, Alfa Romeo gets access to Audi parts bin, Jeep becomes truly global brand, VW gets into lucrative US truck market with Ram.

    • 0 avatar
      highdesertcat

      It’s all part of the shakeout that started with the collapse of the US auto industry in 2008. There will be more changes, no doubt.

      What is sad is that GM is still around. VW should have taken over GM, even with a little help from bribes, like Fiat took over Chrysler. Instead what we have today is that the GM albatross is still hanging around the neck of the industry.

      It took ten years for GM to finally admit to making crap and issue a recall. How many deaths could have been prevented.

      Collateral damage? Only from GM’s point of view.

      • 0 avatar
        mike978

        How is the albatross hanging around the industry? Each company is individual and the woes of one does not negatively impact the other. If anything it could benefit them as consumers switch.

        • 0 avatar
          highdesertcat

          mike978, one of the reasons given the taxpayers for the bailouts, handouts and nationalization way back then was that the automakers are so intertwined that allowing GM to die would have meant devastating consequences for suppliers.

          Today, even Congress is beginning to realize that GM has far more lies, deceit, and even fraud hidden away than they bargained for.

          Claire McCaskell, a Democrat, even told Mary Barra today that she should fire GM’s Chief Counsel.

          In business, we normally refer to the monkey on our back but with GM, the term albatross or pariah seems more appropriate in reference to the US taxpayers.

          Don’t forget, the US taxpayers paid for the bailout and nationalization of GM. Now we all find out what skeletons GM had hiding in the closet.

          And it ain’t pretty. I’m surprised at the bi-partisanship seen on The Hill about this matter.

          Worst part is that all those people were killed as a result of a part that many at GM knew was faulty, but each chose to withhold that knowledge from the public.

          Makes you want to go out and buy a new GM car today, doesn’t it? Who knows what surprises await you in the next 3, 5, or even 10 years…….

          • 0 avatar
            FreedMike

            Whatever unpretty things GM was “hiding” are still a LOT prettier than the consequences of letting it fail would have been.

            In any case, We The People are now out of GM, and they’ll have to sink or swim on their own. They aren’t the only company that cut corners on costs and survived. Google “Alaska Airlines Flight 261.” Last I checked, Alaska Airlines is still flying…and GM’s still in business. Whether that continues is up to the goodwill of the buying public.

  • avatar
    Hummer

    Heck no, VW would trade the hellcat engine in the challenger for a 2.0t and then go into it and loosen the hardest to find grounding cables to make sure that the challengers quality met VW standards.

  • avatar
    romismak

    This is just media hunt for news, but no way VW and Fiat could merge or VW buy them and so on, if anything VW is interrested in Alfa, but Marchione is against it, howewer Agnelli family might see it differently, another part of Fiat VW would be interrested are their NA operations where VW group is not major player, but Chrysler brands are what saved Fiat in last few years, yes Jeep or RAM pickups would be major boost for VW group portfolio and improove their NA market share a lot, but FIAT selling Chrysler group would make no sense for FIAT, it´s their cash cow and without it, right now they wouln´t be even half of what they are + their future plans would go to trash immediately with only FIAT,LCV´s,Alfa and luxury brands.

    So if anything they were discussing it was either Alfa Romeo or NA operations – but again it would make no sense for Agnelli´s to sell Chrysler and make FIAT much smaller player and take them basically years back

    • 0 avatar
      highdesertcat

      VW tried to take over Fiat before but the money wasn’t right. Now the Agnelli family WANTS to divest and sell.

      • 0 avatar

        Hey highdesertcat, how are you? Are you privy to the inner workings of the Agnelli family? I won’t say there are those in the family who want to sell, but there are those who don’t. Fact is, as it’s a family, it’s very difficult to know what they are actually thinking.

        • 0 avatar
          highdesertcat

          Hi Marcelo, I am not privy to the inner workings of the Agnelli family.

          But from a business perspective, this makes sense, and the first paragraph of Derek’s article mentions it.

          This is not the first time that VW has pursued Fiat. The timing could be right within the 2015 calendar year time frame, for a lot of reasons.

          Years ago, industry analysts predicted that there would be a shake out of the global auto industry, largely drive by the collapse of the US auto industry in 2008/2009.

          The end result would be that there would be fewer major auto makers and fewer brands on the market. And this is even before we address the new US mandated CAFE and EPA standards which are also coming down the pike.

          I’m neutral of this VW-FCA thing, because I won’t buy either brand for myself in the future. But from a business perspective, it makes perfectly good sense to me. Even on a global scale.

          Yeah, there will be a large group of individuals and corporate entities who won’t like it if it happens. But that is just tough.

          Change is inevitable,even if it is not always in the best interest of everyone.

          • 0 avatar
            mike978

            It does make sense business wise since in many industries you have some players with 20% of the market. In the car business even the largest (Toyota, GM and VW) each have no more than 10-11% of the market. So it is by other industries standards a fragmented marketplace.

  • avatar
    mjz

    The thought of Chrysler under German ownership AGAIN, makes me shudder. We all know how well it went the first time under Daimler’s “merger of equals”.

    • 0 avatar
      SCE to AUX

      Agreed. FCA is a well-matched marriage, but VW-FCA definitely would not be.

      In the unlikely chance this goes through, I’ll never buy another Chrysler product again.

    • 0 avatar
      hreardon

      Dieter Zetsche had started to successfully turn Chrysler around when the attorneys and bean counters in Stuttgart realized that the union liabilities at Chrysler had the potential to work their way, legally, up the Daimler-Benz corporate structure and bankrupt the whole organization.

      Their desire to dump Chrysler started with this realization and was accelerated by the collapse of the US auto industry that started in late 2007.

      The blanket statement that this would be a ‘disaster’ is horribly overblown.

      Volkswagen is interested in a two key items:

      1. Fiat’s presence in South America
      2. Jeep and Dodge trucks

      Volkswagen has the resources, cash and technology that FCA lacks for long term success.

      This gives Volkswagen massive, immediate inroads to the lucrative US SUV and truck market, additional factories and distribution points.

      • 0 avatar
        LeadHead

        Chrysler was fine before the merger. Benz gutted the management and replace it with their own. Then they basically fired any of the engineering and product development staff that disagreed with that. They tried to force their German corporate-culture onto American workers, and it just didn’t work.

        I can’t imagine the situation would be any different with VW at the helm. Way too many clashing cultures.

        • 0 avatar
          hreardon

          Don’t disagree that Daimler screwed the pooch when it came to management decisions, but by the end of his tenure at Chrysler Dieter Zetsche had mended quite a few fences and had the company humming along well.

          I’m also not disagreeing that VW would do the same thing, but one would hope that the “Merger of Equals”, as disastrous as it was, would be a lesson to all.

        • 0 avatar
          raph

          Don’t forget that big pile of cash Chrysler had saved up for the impending meltdown which Daimler guzzled up and used to help fund Smart Car and pay out big bonuses back at home.

      • 0 avatar
        romismak

        About FIAT South america operations, in Brazil FIAT and VW are No.1 and No.2, so don´t know about anti-trust or some issues, about their big market share togethet, also they are direct competition, it´s not like one is making small cars and 2nd only SUV´s or so and this FIAT VW south america strong is myth – yes they are both strong in South america, but basically it´s just Brazil and Argentina how i mentined in Brazil they are No.1 and No.2 together having above 40% marketshare but both are lossing share recently to Hyundai, Toyota and others, even GM,Ford are doing better and both are strong in Argentina, but there is different position, Renault is very strong just like GM and PSA-together both brands too, so in Brazil they are 5 automakers top 5 – so the share VWG+Fiat is not so big like in Brazil and outside this 2 countries they are almost nothing. Chile,Colombia, Peru and other bigger markets are dominated by Chevrolet,Japanese and korean brands – even chinese now making entries, but VW and FIAt are barely top 10 in other countries outside BRAZ-ARG – yes in Uruguay i think they are doing fine too

        • 0 avatar

          The thing is that you are right. Adding Fiat and VW would not automatically raise their participation and soon it would fall as they compete for the same consumers with tit for tat products. The Brazilian market is virtually defined by the Fiat-VW dance, others are just in for the ride. Without getting into too many specifics, the Hyundai threat has been contained, while Toyota is still a wild card, in that if they ever design a nice Etios, they could gain ground quickly. Also, Chevy is just as big as both with less then 3 market points separating each.

          Finally, while VW’s and Fiat’s participation is smaller in other South American markets, they are present. And remember, Brazil and Argentina together are close to 60% of the South American market.

          And yes, as I understand it there would be anti trust issues and the local supervisory agency would necessarily have to bestow its blessing for the deal to work here.

          • 0 avatar
            romismak

            Yes it would make no sense for FIAt-VW work together on BRA market when they are biggest rivals there, my point about South America was that outside Brazil-Argentina they are not top 5 player in any bigger market-not counting Uruguay which is small natin between BRA-ARG so there choices are limited, in Chile, Colombia,Peru, Ecuador, even struggling Venezuela GM, Japanase and Hyundai/Kia are stronger than VW,FIAT, and their share is bigger than 60%, BRaz-ARG together are like 80% of market, Brazil-3.5million, ARG-950K, rest of South America 1.2m maybe – this year % will go down for both Brazil and mostly Argentina

          • 0 avatar

            hey romismak! 80%? So high, wow. I pulled the 60% from my head, didn’t really look it up. I knew it was high, but 80% explains the reasons Fiat and VW stick to Brazil and Argentina.

      • 0 avatar

        +1

    • 0 avatar
      hreardon

      also, mjz, the auto industry is a completely different world today than ten years ago.

      • 0 avatar
        SCE to AUX

        Maybe, but Volkswagen isn’t.

      • 0 avatar
        mjz

        Well hreardon, the fact that VW is STILL floundering in the US means they don’t understand our market, and that would not bode well for any future product decisions they would be making for Chrysler in this market.

        • 0 avatar
          hreardon

          MJZ -

          Not necessarily true, either. It means that they haven’t been willing to commit the resources to North America, not that they don’t necessarily know what to do.

          Grabbing Chrysler and Jeep would be the in effect clue-by-four they apparently need. ;-)

          • 0 avatar
            mjz

            We will have to agree to disagree on that. They HAVE invested here, look at the Chattanooga plant, but look what they build there, the dumbed down for America Passat. And the equally dumbed down Mexican built Jetta. Per one of your previous comments, farther down the blog, they have completely missed the boat on CUV’s and SUV’s under the VW brand. The VW brand is now being outsold by Subaru here for god’s sake. So I stand by my comment that they still don’t understand the market here.

          • 0 avatar
            Pch101

            VW is doing now what it did when it built Rabbits in Pennsylvania: It tries to reach Americans by softening things up and decontenting in order to lower the price point.

            What VW misses is that might be OK for GM or Chrysler, but that isn’t a good way to sell German cars to Americans. But that would require acknowledging that VW is a niche brand in the US, has always been a niche brand in the US, and will probably always remain a niche brand in the US.

            If VW is serious about growing its US business, then it would be wise to copy Hyundai, which figured out that it isn’t possible to gain more than niche levels of share in the US without reliability that is at least within spitting distance of Toyota and Honda. But that wouldn’t be particularly German, now would it?

          • 0 avatar
            geeber

            Pch101: If VW is serious about growing its US business, then it would be wise to copy Hyundai, which figured out that it isn’t possible to gain more than niche levels of share in the US without reliability that is at least within spitting distance of Toyota and Honda. But that wouldn’t be particularly German, now would it?

            I have German relatives on my mother’s side, and one of them even works for a German automaker.

            All that I can say is that, if you think our Big Three apologists are stubborn and refuse to face critical facts….

          • 0 avatar
            Pch101

            In the Dictionary of Cultural Stereotypes, one does not see a German face next to the word “flexible.”

      • 0 avatar
        highdesertcat

        Amen to that! What was considered unthinkable pre-2008 became the new way to survive in the market in 2009, beginning with the bailouts, handouts and nationalization.

        In short, everything is doable in today’s automotive world.

        Besides, VW tried to take over FCA before. This time could be different.

        • 0 avatar
          VoGo

          Your timing is just a little off there, desert cat. The Bush $17.4B bailout of GM and Chrysler was in 2008.

          • 0 avatar
            highdesertcat

            I know Shrub started this mess, but then the black guy who got into office doubled down on it.

            Many analysts thought it was wrong at that time. I always thought it was wrong because it was selective and partisan.

            Shrub provided a bailout until March 31, 2009, to give the incoming administration a chance to determine its own course of action. At that time it was the prudent thing to do.

          • 0 avatar
            VoGo

            “the black guy who got into office”

            Whatever happened to the America where people had respect for the Office of the President?

            President Obama was elected by a majority of the electoral college, and then re-elected 4 years later by a very clear majority. Both elections were viewed as fair, and no reputable politician disputes them, certainly not the two candidates he defeated.

            You can agree or disagree with our President’s policies. You can like the facts that since his election, the economy has been growing steadily, unemployment has fallen to 6%, and the stock market is at all time highs. Or you can pretend that your world is full of bailouts, handouts, and nationalizations.

            The sad thing is that you are the one who get a handout every month from our nation’s military. So in return, can you please not disrespect the United States of America and the Office of its President?

          • 0 avatar
            highdesertcat

            VoGo, did you forget that YOU coined that phrase in your hateful reply to one of my comments?

            Try a keeping a copy of your comments.

          • 0 avatar
            mkirk

            Yes VoGo, because the left did nothing but respect the office from 2000 to 2008. Interesting how you fail to mention any foreign policy accomplishments in your post.

          • 0 avatar
            highdesertcat

            mkirk, don’t be too hard on VoGo. It is obvious from its previous posts that this individual has issues. Serious issues!

          • 0 avatar
            VoGo

            mkirk:
            I only mentioned domestic achievements because these are typically the source of the desert cat’s whining. But off the top of my head:
            - Removal of all chemical weapons from Syria
            - Exit from Iraq war
            - Near exit of Afghanistan
            - the right level of support for Libyan rebels, resulting in change of government
            - zero terrorist attacks on US soil like 9/11

            We are also close to a breakthrough in Iran with the negotiations there, and have kept No. Korea in a box.

            And mkirk, I for one never disrespected the office of the president, regardless of who was in office.

          • 0 avatar
            dantes_inferno

            Gentlemen – please refrain from the political “Drama Queenism” and stay on topic. We get enough of it from the rest of the so-called media outlets as it is.

          • 0 avatar
            FreedMike

            “The black guy,” Desertcat? Really?

            I see VoGo’s point.

            And, no, not everyone on “the left” was universally respectful of Bush, but then again, the man bald-faced lied to get us into a war. That tends to leave a few un-mended fences.

            And I don’t recall any leftist members of Congress screaming “you lie!” during Bush’s state of the union addresses. That’s the kind of infantile stupidity Obama has had to put up with from “the right.”

            And then we have “the black guy.” Come on. You can do better.

          • 0 avatar
            highdesertcat

            Mike, I didn’t coin that phrase. VoGo did. And VoGo called me a racist because I preferred Reagan, Clinton and Shrub’s policies over that of the current administration; I was better off.

            I’m quoting VoGo’s phrase in a reply to his comment, and have posted that same phrase on several other boards giving VoGo the credit, along with the extract of his post I copied.

            BTW, I’m an Independent, with equal disdain for both sides of the political aisle. Been that way since July 1, 1985, the day I retired from the military and registered to vote in New Mexico.

  • avatar
    Jeff Weimer

    VW has struggled to gain a foothold here?

  • avatar
    CoreyDL

    “…while Volkswagen would benefit from Chrysler and its associated brands by giving it a foothold in America, where it has traditionally struggled to gain a foothold.”

    This sentence managed to be gramatically awful, while at the same time not especially true.

    VW sells 350,000+ units a year in the USA (couldn’t find an actual figure for 2013 though), I would consider this plenty for a “foothold.” In 2012, Mazda sold just over 277,000 units in the USA. So they don’t have a foothold either.

    • 0 avatar
      romismak

      I know what you mean, but i also understand the meaning of this sentence – VW group as top 3 global automaker selling this year over 10million and they are not ,,major,, player in NA or just USA. That´s the point and also their plan from 2011 i think about 1million vehicles in 2018 are alreddy not achievable – with VW brand struggling and actually loosing market share so their goal of 800 thousand sales in 2018 are sci-fi at this moment. VW group should be stronger in NA than they are right now that´s meaning of this sentence and people saying VW is struggling in US, or VW is non-factor and so on

      • 0 avatar
        Vulpine

        I can give you two words which would explain the major portion of VW’s problems here in the US: “Chicken Tax”. VW wants to compete in America’s truck market and the CT is keeping them out. Since they only have one assembly plant currently in the US, that means they can’t build any of their trucks here and the CT adds 25% to the COST of building them in Germany and shipping them here. In other words, the Amarok simply can’t compete in price even if it could compete in capability (which I think it could.) Having access to the RAM assembly plants, the Amarok could be built right beside a Jeep-branded truck of the same size and on the same platform, giving them the potential for two possibly very popular trucks to supplement the Ram brand itself.

        The question is, would that added capability outweigh the cost of such an acquisition and to me the answer is no. They either need to convince the US to repeal the CT or go ahead and build more assembly capability here in the US. Since they’re already planning to add CUV/SUV capability to the Tennessee plant, it seems simple to me to just build the Amarok on the same line–at least in the beginning. Since their SUV/CUV introduction is likely to be pretty slow, adding the trucks right up front could help fill that line’s capacity at least until sales demand more than the current plant can handle.

        • 0 avatar
          hreardon

          I don’t think the Amarok coming to the US is a big deal. If VW gains ownership of Ram and Jeep they’ve got their US trucks without any (initial) new investment.

          What VW will likely do is start to transition these products to their own architectures (MQB+MLB) at some point in the product replacement cycle. This allows VW to leverage their designs and suppliers.

          My knee jerk thought is that you’d see Chrysler+large Jeeps move to MLB and the smaller cars move to MQB.

        • 0 avatar
          bball40dtw

          VW could build the Amarok in Mexico is they really wanted to. They build it in Argentina in addition to Germany.

          • 0 avatar
            Pch101

            The Amarok would be a money loser here. They wouldn’t be able to sell it in the US for a price that is high enough to make it profitable, even if they replaced the diesel with the obligatory gas 6-cylinder that has become the norm in this class.

          • 0 avatar
            Vulpine

            Ok Pch101, you said it, now explain it. WHY do you think it would be a money loser. WHY wouldn’t it sell?

        • 0 avatar
          Onus

          Chicken Tax will go away with TITP for European Union countries.

    • 0 avatar
      matador

      I’ve had my Death Watch eye on Mazda for the last few years. I’m not sure if Mazda is a good comparison…

      I do think, though, that VW/Audi definitely has a foothold in America.

      • 0 avatar
        FreedMike

        @Matador:

        I think Mazda’s main issue has been lack of a cohesive image for their cars. But they’ve never had anything but an good reputation for quality, and without that, you’re done. That’s something VW definitely lacks here.

        I’ll give Mazda a better chance of success with their current lineup than I give VW. I feel they’re on the upswing, but VW keeps fumbling.

    • 0 avatar
      SCE to AUX

      VW’s US sales for the last 5 years:

      2009 = 214,454
      2010 = 256,830
      2011 = 324,402
      2012 = 438,133
      2013 = 407,704

      They definitely have a foothold, but it’s not what VW wants or predicted.

      Mazda, by contrast, has been flat for 10+ years, with sales always between 207-295k. But at least they’re not Volvo or Mitsubishi.

      • 0 avatar
        CoreyDL

        Indeed, Volvo 2013 sales total: 61,233

        No bueno at all. But I would still say Volvo has a foothold.

      • 0 avatar
        hreardon

        VW’s goal by 2018 was 800,000 Volkswagen brand vehicles sold in the US along with 200,000 Audi brand vehicles.

        Audi will reach that goal by 2015-2016 without batting an eye. Volkswagen, however, will not reach their goal by 2018. VW has wisely backed down from the original goal in North America.

        Adding Jeep and Chrysler to the lineup, however, will give VW massive presence in the US and Fiat will give them virtual control over South America.

      • 0 avatar
        matador

        I’d hate to be someone at Mitsubishi. I’m amazed that they still sell cars here.

        I’m more amazed that a few people have bought them.

    • 0 avatar
      Pch101

      VW reportedly came close to withdrawing from the US two decades ago.

      Sales volumes in the US remain low enough for VW management to publicly complain about how low they are.

      No, VW’s position in the US market is not particularly good. It seems likely that the VW brand generates losses here.

      • 0 avatar
        28-Cars-Later

        Enough for it to withdrawn or relegated to specialty status if this deal were to happen?

      • 0 avatar
        Vulpine

        VW sales have effectively doubled since the Tennessee plant went into operation, though at the same time the US-built models lack some of the sophistication of their German look-alikes. VW is making a mistake by reducing quality in their effort to achieve cost-effectiveness and they’re about to make a bigger one by introducing new cost-cutting policies. What that tells me is that they have an accountant at the head end that’s being “penny wise but pound foolish”. Rather than cutting costs, they really need to be improving the product and DEMONSTRATING these improvements. So what if it jacks up the price of the vehicle a bit, as far as I’m concerned they’re already overpriced–because their quality doesn’t meet up to what the dealerships ask.

        The problem is, VW is now doing the same thing Daimler did to Chrysler–they’re sacrificing quality even while introducing otherwise decent vehicles. Daimler’s re-envisioning of the Jeep Wrangler has become a huge success for Jeep–making it their top-selling model while they held Chrysler. On the other hand, quality issues have hurt the Wrangler as we have seen recalls for transmission fires, something called the “Death Wobble” (I own one of these Jeeps and I haven’t experienced that–yet) and other issues that can be diagnosed down to poor-quality components in nearly every case. Interestingly, FCA is doing what they can to address these problems, even if it’s not as quickly as some would like. If VW doesn’t fix their own issues, buying Chrysler, GM or even Ford isn’t going to help them.

    • 0 avatar

      @CoreyDL

      Strawman. I never said Mazda does. VW has been investing heavily in trying to increase US market share, but sales have not been getting much traction recently. Of course, you’re welcome to write your own analysis if you disagree.

  • avatar
    daviel

    One should never use the same word twice in a sentence never.

    • 0 avatar
      Lie2me

      Never, ever?

    • 0 avatar
      28-Cars-Later

      Never say never, again.

      • 0 avatar
        bball40dtw

        That sounds like a 70s-80s Bond movie that had Timothy Dalton or Roger Moore as Bond.

        • 0 avatar
          28-Cars-Later

          1983, actually, with Sean Connery. This was the oddball Bond film which essentially a remake of 1965′s Thunderball. Also, it was directed by Irvin Kershner, who of course brought us the immortal The Empire Strikes Back.

          http://www.imdb.com/title/tt0086006/

          • 0 avatar
            bball40dtw

            I was not a fan of 80s James Bond. I remember seeing License to Kill, and being confused as to why James Bond was in Miami Vice.

            GoldenEye got things back on track. Talking about it makes me want to find my N64.

          • 0 avatar
            28-Cars-Later

            I kinda liked it, but of Dalton’s two films The Living Daylights was probably better. I think Dalton was better than Moore overall but Pierce Brosnan wipes the floor with both of them.

            On Dalton’s roles:

            Steven Jay Rubin writes in The Complete James Bond Movie Encyclopaedia (1995):

            “Unlike Moore, who always seems to be in command, Dalton’s Bond sometimes looks like a candidate for the psychiatrist’s couch – a burned-out killer who may have just enough energy left for one final mission. That was Fleming’s Bond – a man who drank to diminish the poison in his system, the poison of a violent world with impossible demands…. [H]is is the suffering Bond.”[20]

          • 0 avatar
            bball40dtw

            I’ll have to rewatch it. I’ll admit its been since the early 2000s that I’ve watch a non-Brosnan/Craig/early-Connery Bond movie. I haven’t even seen Moonraker in 10+ years.

          • 0 avatar
            PrincipalDan

            Loved “The Living Daylights” and I have the complete boxed sets of all Bond movies.

            My favorite line is when Dalton actually utters the title line.

            “Must have scared the living daylights out of her.”

            My favorite scene however is when the BBW Russian pipeline worker distracts her boss by unzipping her coveralls and forcibly motorboating his face with her chest. Followed by a slap and telling him he is a “pig”.

            “Moonraker” is a “jumping the shark” sort of Bond film along with “A View to a Kill” which should be watched just to see Christopher Walken gnawing on the scenery relishing every min of being a villain.

            Good stuff.

          • 0 avatar
            NoGoYo

            I like License to Kill, but I happen to be a fan of the old school R rated American action movie, and License to Kill is basically like a Schwarzenegger movie where you replace Schwarzenegger with James Bond.

            But hey, Dalton kills one guy with a giant industrial grinder and kills the main villain by BURNING HIM ALIVE. It’s awesome. It’s not really a Bond movie, but it’s a great action movie.

          • 0 avatar
            bball40dtw

            I like my Bond and Commando seperate.

          • 0 avatar
            CoreyDL

            My copy of Goldeneye was worn out by the time I stopped playing N64 (when it was replaced by a Game Cube, and a copy of Tomorrow Never Dies).

          • 0 avatar
            28-Cars-Later

            @PrincpalDan

            Walken is excellent in a View to Kill, but somehow the overall film didn’t work for me. Moonraker was ridiculous but Live and Let Die wasn’t too bad.

            @Corey

            Goldeneye is THE game for N64. I was happy to see Nintendo bring it back for Wii.

          • 0 avatar
            PrincipalDan

            @28-Cars-Later, what I love about Walken is that you can tell he doesn’t care who else is in the film he IS a Bond Villain and darn it he’s going to deliver!

            He wouldn’t have cared if it Grace Jones as the Bond Girl or George Jones, didn’t care if it was Rodger Moore or Rodger Rabbit. He was the VILLAIN!

          • 0 avatar
            28-Cars-Later

            Indeed, Walken is an incredibly skilled actor who plays the villain all too well.

          • 0 avatar
            CoreyDL

            To me, Walken will always be in a robe, offering the camera some shampanyah.

          • 0 avatar
            FreedMike

            @ Dan:
            Moonraker may have sucked, but it’s by FAR the best Bond Villain Lair ever. The only thing that even comes close is Blofeld’s rocket base in “You Only Live Twice”.

            I think of Dalton as the best actor who played Bond…but not necessarily the best Bond.

          • 0 avatar
            FreedMike

            I LIKED “Never Say Never Again.” How could ANYONE dislike a Bond movie with Mr. Bean and Fatima Blush?

        • 0 avatar
          Vulpine

          Sean Connery–and it was a direct play on the actor’s own words when he claimed he would “never play Bond again.” George Lazenby played Bond in “On Her Majesty’s Secret Service” and basically flopped. Connery was needed to rebuild the character before Roger Moore took over.

          • 0 avatar
            FreedMike

            Actually, that Lazenby outing was not that big a flop, but Lazenby himself didn’t want to play Bond again. Thus, the return of Connery in “Diamonds Are Forever,” which sucked royally aside from the ’71 Mustang Mach 1 and this one bit:
            http://www.youtube.com/watch?v=sf4xw4mE2Xk

  • avatar
    PrincipalDan

    Memo to Disney: You are rebooting the Star Wars Franchise – Ferdinand needs to be offered the part of a Sith Lord, PRONTO.

  • avatar
    28-Cars-Later

    I realize due to the internationalization of the deal this would not come up, but wouldn’t this be an anti-trust issue? I would also think for a deal to be done, the Italian union liabilities would have to be dispensed with as well.

    • 0 avatar
      matador

      I was thinking Anti-Trust laws too.

      Plus, you know, the Gov’t has to have somebody to give money to. GM can’t be expected to fill that roll all alone, can they???

  • avatar
    hreardon

    Piech has been making overtures for Alfa for a number of years now. Why he wants to add another niche luxo brand partially escapes me since I see Fiat, Jeep and Chrysler as the real prizes. Clearly the most valuable components are:

    1. Trucks, SUVs, CUVs (Jeep+Chrysler)
    2. Latin America (FIAT)

    Clearly Piech sees space for Alfa within the VW Group empire and Maserati and Ferrari are distinctive enough (and I assume, profitable enough) to hold their own as well.

    I wouldn’t be surprised to see a marginalization of FIAT in Europe with a focus on South America and Asian/African emerging markets (this gives SEAT some more breathing room in Europe).

    Meanwhile, Chrysler and Jeep give VW a major foothold in North America and the substantial profits that SUVs and trucks generate. Over time VW moves the FIAT platforms to MQB, the Chrysler product to MLB (future Chrysler 300 and Grand Cherokee) and does something with Dodge. What that is, I don’t know just yet. Perhaps Dodge becomes the exclusive “American Muscle” brand for VW.

    Where does this leave Marchionne? Winterkorn’s replacement once big Martin retires, or is Sergio off to land elsewhere?

  • avatar
    juicy sushi

    Just asking a question, as I don’t know the answer. I get that Ferrari isn’t included as it is a license to print cash, while FIAT is not. But how much of the R&D cost for Ferrari is amortized or spread across FIAT? Would Ferrari on its own have the budget to continue to do the R&D necessary to do competitive products going forward?

    • 0 avatar

      Hardly, look at Lamborghini, Zonda, McLaren. New models are always few and far between because they lack a Sugar Daddy. Ferrari is being held separate for two reasons: one get even more money for it if it were sold and as a token for Italian political sensibilities. Ferrari nowadays is actually profitable, but that profitability comes from selling t-shirt, caps and sunglasses, not cars.

      • 0 avatar
        juicy sushi

        Marcelo,

        Lambo has VAG’s money, and it would have been very funny to see how things would have played out if Ferrari were included in the purchase. But yes, McLaren and Zonda are quite small. I do know that McLaren relies heavily on the contributions of outside firms like Ricardo.

        And my condolences on the World Cup, although I have to say, I’m glad it happened as it might get Brazil back to Jogo Bonito instead of what you currently have to put up with.

        • 0 avatar

          Oh, I know. I was thinking of Lamborghini before VW, when they pretty much lived in a state of permanent crisis.

          As to the World Cup, I totally agree. The score glared, hot like the sun, on our game’s deficiencies. Like I said above, it was an unquestionable sign that we have to change. I also think it was good Germany one because they won as a team. The Brazilian model of a couple of stars deciding everything only works when you actually have a couple of stars. Germany reminded us this is a team sport.

  • avatar
    morbo

    Can someone explain to me this love of Alfa Romeo? I get they’re beautiful cars and handle well, but it seems they can’t sell them selves. If they were the only halo brand I could understand keeping it around, but FCA has Ferrari and Maserati for that, and V-dub has Porsche and Audi. Why would Alfa Romeo be the alive in this unholy conglomerate.

    If this happens and regulators don’t flinch (would Europe allow two direct competitors to merge?), does this Frankenstein monster become to big to manage?

    RAM and Jeep print money, so you’re not touching them (unless to fold RAM back into Dodge where it belongs).

    You can’t kill Fiat because they own Brasil, and it’s a booming market.

    V-Dub is Europe’s champion.

    Audi and Porsche print money, and are the Asian bulwarks.

    Ferrari prints money.

    So what happens to Dodge, Maserati, Alfa Romeo, Skoda, Seat, Bentley, Bugatti, and Lamborghini. At what point does having all these ‘marque’ brands become too much. You might be able to offload one or two to dumb over-rich folks like Ford did with Aston Martin, but that’s a lot of rich peoples cars to get manage.

    • 0 avatar
      hreardon

      I don’t think they become “too much” so long as they retain strong identities and character.

      Case in point: Lambo versus Ferrari. They are supercars, but with very unique personas. Bugatti is for bonkers hypercars, etc.

      Skoda seems to have developed a strong brand identity, but Alfa and Seat seem to overlap somewhat and have weak brands today.

      It’s a fine line to walk and VW has done it better than most, but I agree: it’s important to keep a very keen eye on this.

    • 0 avatar
      romismak

      Alfa Romeo could be cash cow for FIAT, but their management is probably joke, if Alfa would have been good managed in 90s, right now they would be bigger in Europe and exporting cars to NA, Asia and to GCC where, even JV production in China – they could be italian sporty brand with that image selling at higher price than volume brands but not going to Ferrari, Lamborghini, Maseratti levels – they could be something between maybe selling 300-400k cars annualy and be profitable and that´s why all this talk about Alfa, potential is there – but not sure if right now is still as big potential as it was maybe decade, 2 decades ago

  • avatar
    319583076

    If any automaker became as big as their CEO would like, it would end in catastrophe for all of us although I’ll allow that the CEO may make out with a double-platinum parachute.

    In terms of enthusiasts, bigger automakers are poison. I want smaller, independent manufacturers that produce differentiated product with interesting features – not more homogenized blandmobiles which are what the big guys churn out to maximize profit. Any of the big guys getting bigger is bad business for all.

    Caterham makes 7s because they can, Toyota makes Camrys because they have to.

  • avatar
    340-4

    If this happened, I would never buy another product from Chrysler/Dodge/Ram/Jeep again.

    On top of the fact that having owned two VW’s, I’ll never own one of those again.

    Sickening and sad, this prospect is.

    • 0 avatar
      highdesertcat

      But a distinct possibility IF VW gets its way. VW has plans for global industry domination. But the problem is that VW is nowhere near as good as Toyota products.

      • 0 avatar
        billfrombuckhead

        VW builds some great cars, JapanInc builds appliances. The Google autonomous car will defeat Toyota.

        VW is interested in FCA because they build great cars as well but then it could just be another little get together of the illuminati dividing up the world before they retire to Elysium.

        BTW, look for another great Jeep month with TTAC favorite Cherokee leading the way.

        Sequoia? they still build that ugly gas pig?

        • 0 avatar
          VoGo

          Bill,
          Have you ever driven an NSX, LFA, FR-S, S2000, MR2, Miata or GT-R? How about an STI, GT2000, 240Z or Evo? RX-7? Supra? 370Z?

          I am just wondering how you rate them vs. Frigidaire or Maytag.

          We get that you like FCA product, and that’s fine, but can you lead the cheers without being offensive?

        • 0 avatar
          Lie2me

          “but then it could just be another little get together of the illuminati dividing up the world before they retire to Elysium.”

          Face-palm

          *sigh*

        • 0 avatar
          highdesertcat

          @billfrombuckhead, yeah, I sure hope they still build them, the Sequoia, for 2015, and with the 5.7L. I’ve got my order in at the Toyota dealer where we bought both the 2008 Highlander and my 2011 Tundra 5.7.

          And I also hope they will still build the Tundra 5.7 4-dr 4X4 Limited for 2016.

          These will most likely be the last purchases on my driving life.

          But in today’s auto world, you can’t be sure of anything anymore.

  • avatar
    Tstag

    I could imagine Tata making a bid for Fiat if it’s now on the market. Tata could make something out of Fiat in India. Land Rover and Jeep could dominate the SUV market between them. Jaguar and Alfa would achieve the volumes they need from one parts bin.

  • avatar
    Lou_BC

    VW wants to buy FCA.

    Where do I line up to buy a product from those companies since their quality and durability is legendary. Talk about synergy.

    • 0 avatar
      nrd515

      That would probably finally put me off Chrysler branded vehicles.
      My last three Chrysler products were very good, and I plan on buying another one in 2016, if it all works out ok. I can’t say that any of the VW group products I’ve seen personally over the last 11 years have been even nearly as reliable as any Chrysler product I’ve had, with the exception of my ’77 W150 Power Wagon, that thing was almost as bad as the A4. It had a huge advantage over anything made today, as no matter how bad it was, how often it broke, I could fix almost anything on it. It was simple, and crude. In the 4 years I had it, it was only undriveable one day. Every other time, it was back out on the street the same day it broke, sucking down gas at 10MPG around town, and maybe 12 on the highway. One good thing about it, it had the best seats of anything I have ever had. Recaros suck compared to the seats it had. I could drive from Vegas to LA with a couple of 5 minute stops for gas, etc, and not have any discomfort at all.
      The Audi A4 my friend’s wife leased was an even bigger turd than the Passat she had before that, and it was very bad. At least it was a lease and when it turned three, it was gone. How it wasn’t lemoned is a total mystery to me. An even bigger mystery is why they never pushed for it. After the second time I had to wait for a tow truck for the same problems (Almost always an engine sensor or a module that “failed for unknown reasons”), I would have started squawking about replacing the car, but they didn’t really start complaining until the 2nd year was almost done. It had been in the shop countless times by then. I know because I picked them up a lot of those times it had to stay.

  • avatar
    sportyaccordy

    Lol. I thought VW wanted to grow. Why would they buy a company with so many facets positioned for shrinkage and failure?

  • avatar
    el scotto

    What does John Elkann have to say about all this?

  • avatar
    05lgt

    Another reason to hold Ferrari out of this deal: Ferrari and Lamborghini CAN’T be the same company. I’m pretty sure that’s one of the signs of end times.

  • avatar
    Eyeflyistheeye

    My initial question was how is this going to pass EU regulatory approval? Not to mention VW running Chrysler, when they have had a reverse Midas touch on anything to do with the North American market.

    Also, I can’t wait for Ferrari, Bugatti, Lamborghini and Porsche to all rebadge a Touareg or Grand Cherokee. /sarcasm.

    The one thing that FIAT and VW have in common is that they’re both reaching Roger Smith-era General Motors levels of overexpansion and hubris.

    • 0 avatar
      highdesertcat

      If you have been following the status of the EU, the EU is looking for anything that will infuse money into its financial system — money derived from the sale of goods or services.

      A win for VW could mean big bucks for the EU in the form of an increase in sales to Asia with a wider range of products supplied under the umbrella of VW.

      My question is more about the domestic implication. What pressure will the UAW exert on the current administration or on the new Hillary Clinton administration to keep this from happening?

      Because if VW wins this deal, many jobs could go to the homeland (Germany) instead of staying in the US.

      • 0 avatar
        VoGo

        Why would jobs migrate out of the US if ownership passes from an Italian company based in London to a German company? If anything, VW has been moving jobs TO the US over the past several years.

        Given that it’s a lot cheaper to engineer and build vehicles in the US vs. Germany, VW would be foolish to add cost, especially after having just announced a major cost reduction program.

        This was just another illogical post meant to attack Obama and Clinton. Fail.

      • 0 avatar
        FreedMike

        “Because if VW wins this deal, many jobs could go to the homeland (Germany) instead of staying in the US.”

        Seems to me, then, that maybe “the incoming Hillary Clinton administration” and the UAW might be RIGHT to oppose the deal. And given that Germany has used Chrysler like a street walker in the past, why shouldn’t anyone be anything but concerned now? We spent money to get Chrysler back on its feet; why should anyone support another German invasion now?

        • 0 avatar
          highdesertcat

          If VW does manage to get this deal through, then more than likely Germany will use the Chrysler portion of FCA as a street walker again.

          What does Fiat have in its arsenal that VW doesn’t already do better? Chrysler and Jeep.

  • avatar
    Victor

    LOL@ how everybody here went bananas with this non-news from an obscure magazine nobody had heard of before. This has Piech fingerprints all over it – and it’s not even the first time such nonsense has surfaced.

    Seems like the Führer wants Jeep, Ram and Alfa Romeo while at it. It only makes sense if he gets all the press regurgitating this lie all over the place, so that pressure builds up from the stock market. The Agnelis might be tempted by the momentum gained from the rumours, but they’d have to be pretty stupid.

    Piech knows VW dreams of world domination are long gone and now he is just trying to mix things up a bit. The Agnelis are crazy rich, beyond their dreams with brazilian domination and they know in the long haul the US market will make them even richer. Ferrari alone won’t feed all those mouths.

    Not gonna happen. Not now, not ever. FCA is not for sale, and I wouldn’t be surprised if they start buying one or two Japanese OEM next year.

    • 0 avatar

      well yeah, Victor, but the gringos just don’t get it, do they? LOL!

      Sigh, even they even knew the scope of the Agnelli empire and all the other little businesses they have on the side…

      • 0 avatar
        Victor

        Right you are, fellow patriot of mine.

        There is a pattern of disdain and lack of knowledge about the Agnellis – which I seem to have misspelled, my bad – and about the Fiat Group as a whole.

        Fiat was the best thing that has ever happened to Chrysler. It is exhaustive to read about how Ram and Jeep are saving the day. I don’t have all the data but I bet Fiat makes more money selling Unos and Palios in South America than selling Jeeps in the US.

        And also how VW desperately needs Chrysler to dominate the US market. It puzzles me that, with all the greatness, Chrysler had to be saved from that big crusher of history so many times.

  • avatar
    insalted42

    I don’t like this considering VW’s very German tendency to consolidate EVERYTHING in their brand portfolio. If this happens, in 5 years the Dart/200 would be a Jetta/Octavia/ Toledo, the Charger/300 would be a Passat, the Challenger would be neglected until it fades into obscurity, and the next gen Jeep Renegade will be a Tiguan. Only Alfa Romeo stands to improve, and even that could go horribly wrong with the wrong branding.

  • avatar
    Lorenzo

    I believe there was a rumor that Exor, the Agnelli family holding company that owns 30% of Fiat, was looking to INCREASE its ownership of the combined FCA. Somehow, I think Ferdinand Piech is playing games with Sergio Marchionne. The FCA merger isn’t complete yet, and would be a crowning glory for Sergio. Is Piech offering to buy the combined company, or just Fiat, to destroy the merger by buying out Sergio’s bosses? Many of the latest generation of Agnellis have not only left Italy, but left Europe – the chairman of Exor and Fiat, John Elkann, was born, raised and lives in New York.

  • avatar
    jpolicke

    Aw, hell no. I bought Mopar because I was done with VW’s love of complexity and contempt for reliability. When Fiat took over they upgraded all the atrocious cheap interiors that the previous German owner forced Chrysler to make. Given the way they de-contented and cheapened the MK6 Jetta over the MK5, I shudder to think what VW would return them to.

  • avatar
    FreedMike

    VW needs to build its business from within if it wants to grow here. It certainly has the resources. What it lacks is any kind of feel for the American market. Ford has been successful selling strongly European flavored product here – why can’t VW?

  • avatar
    jpolicke

    VW is already “strongly European flavored”. That’s not the problem. VW needs to build a product that can generate brand loyalty; you can’t grow in a market without repeat business and strong word-of-mouth positive buzz. For too many of their customers it’s one and done. They also need to get over the mindset that Americans won’t pay a dime extra for quality or content; there are too many alternatives that provide the quality feel without charging a premium. If VW can’t produce a car that doesn’t feel like a plastic tub inside profitably, then they’d be better off spending their money figuring out how other brands can.

    • 0 avatar
      highdesertcat

      We used to have a VW dealership in my area, near where I live. But they went out of business for exactly the reason you mentioned, no repeat business.

      Now the nearest dealership is in El Paso, TX, some 100 miles away. Who wants to drive that far in case of warranty service, if the car can be driven at all?


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