09.02.2009 REPORTS SUGGEST FIAT-BMW ALLIANCE TALKS MOVING FORWARD
ALFA MITO
MINI COOPER S

Original parameters for the talks between Fiat and BMW focused on the German carmaker gaining access to the Italian firm's technology and components for its niche MINI brand (above, the MINI Cooper); meanwhile Fiat was keen to gain access to the MINI dealership network in North America to sell the MiTo model (top) as a key part of its stateside relaunch of the Alfa Romeo brand.

While recent media attention has been focused on Fiat's proposed alliance with struggling American carmaker Chrysler LLC, and persistent rumours of a tie up with French firm PSA Peugeot-Citroën, reports today suggest that talks with Germany's BMW over wide-ranging small platform technology sharing are still on-going.

The latest media reports, which follow months of silence on the subject, come from Il Messaggero which confirmed that the proposed alliance would be only in the area of small cars. The Italian newspaper quoted BMW sales and marketing chief Ian Robertson as making the comments during a company presentation in Austria.

Rumours that Fiat and BMW were talking about a strategic alliance were confirmed last July when the two companies issued statements that discussions were going on. BMW, without the small, economical models that are currently in favour with consumers in its portfolio, were expected to look to gain access to the smaller platforms that underpin Fiat's Panda and Grande Punto, as well as cutting-edge technology such as the award-winning 1.3 Multijet 16v turbodiesel and the brand new 900cc SGE (Small Gasoline Engine) unit.

"We are currently examining with the Fiat Group possibilities for the joint use of components and systems in MINI and Alfa Romeo vehicles in order to achieve economies of scale," Friedrich Eichiner, BMW management board member said in an official statement last summer.

Making it a two-way deal, Fiat was keen to gain access to BMW's MINI distribution network in North America to aid its stateside relaunch of the Alfa Romeo brand. As such the proposed plan was that the new B-segment Alfa MiTo coupé would be retailed through selected MINI showrooms. "As part of possible cooperation, BMW Group will provide [Fiat] with support in launching the Alfa Romeo brand in the North American market," Fiat said in its version of the official statement last summer. However since then the Alfa Romeo relaunch has been postponed for a couple of years due to crumbling economic conditions in the US and if the recently proposed deal with Chrysler comes off then Fiat will have a ready made route to distribute the cars from its brand portfolio.

Meanwhile, Fiat's shareprice rallied in trading this morning: it was up 1.36 percent at 4.67 euros by 12:30 PM. The share price has slumped as low as 3.35 euros this year as investors shun the car manufacturing sector in general, and they were also spooked by a higher than expected rise in Fiat Group debt that was revealed in last month's full year financial figures.
 

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