Chrysler's 177-page viability report outlines the benefits of an alliance with Fiat that would immediately create the world's sixth largest automaker with a complimentary geographical presence and provide a springboard for expansion.

An alliance with Fiat would help Chrysler address some of its most pressing strategic challenges.

• Fiat would provide a strong partner to build the presence of the Chrysler, Dodge and Jeep brands in important international growth markets, where Chrysler currently has a minimal footprint.
• Access to Fiat Group platforms would complement Chrysler’s current product portfolio and would allow the Company to rapidly bring to market fuel-efficient, environmentally friendly small cars.
• Chrysler would obtain access to world-class small engines and powertrain technology without the need to spend significantly on capital investments and R&D.
• In return, Fiat would gain a 35% equity position in Chrysler.

Benefits from global scale

While Chrysler’s current scale makes it difficult to compete versus global competitors, the Alliance would immediately create the sixth largest global automaker by volume, with combined vehicle sales in excess of 4 million units.
• Larger scale would make the Alliance more competitive with top tier auto manufacturers, since new platform and technological development costs could be amortized over higher volumes.
• The Alliance also would increase R&D and design capabilities by combining two leading technology players.
• Joint development of future global platforms and powertrain solutions, combined with the use of common components, would provide the potential for significant reductions in combined development costs.
• The complementary geographic strengths would provide synergies in sales and service.
• The larger scale would provide savings in procurement as a result of common suppliers on existing platforms and even greater opportunity on future shared platforms.
• The combined direct materials spend would be more than $45 billion annually.

Expansion through geographical presence

• Geographic balance is another mutual benefit, as the Alliance would take advantage of Fiat’s presence in Europe and Latin America and Chrysler’s position in North America. Here is how regional market shares currently break down: Europe: Chrysler 0.5 percent share; Fiat 7.5 percent share; South America: Chrysler 0.7 percent share; Fiat 18.2 percent share; and North America: Chrysler 11.0 percent share; Fiat less than 0.1 percent share.
• By leveraging Chrysler’s and Fiat’s complementary strengths in distribution, the Alliance would dramatically enhance the geographic footprint for each company, providing the opportunity to grow combined share.
• An improved geographic balance also would lessen the dependency on any single market for the Alliance.
• In addition, scale in the Americas and in Europe would put the Alliance in better position to penetrate Asian markets from a position of strength.