American
financial analysts see little upside from GM purchasing the remaining 80%
of Fiat SpA. With GM currently embarking on a major restructuring programme
of their loss making European subsidary Adam Opel AG and intergrating the
recently aquired Daewoo Motor Co, simultaniously trying to fix the major
problems within the Fiat Group could see GM becoming bogged down.
Since the deal which saw GM purchase 20% of Fiat with an option to buy the remaining 80% through to July 2009, joint projects to develop engines and gearboxes, along with common parts purchasing schemes and shared vehicle platforms have seen ever closer ties between the companies evolve.
While GM is currently involved in a major cost cutting programme, the Fiat Group's huge recent losses of $395M in the first quarter of this year and $506M in 2001, would in comparison wipe out GM's $601M net profit for last year.
However although GM CEO Rick Waggoner has denied that there are any takeover talks planned, CFO John Devine has stated that GM could easily afford to purchase Fiat without affecting any current operations. The purchase could be made with a combination of stock and cash.
Rick Waggoner, stated however that GM and Fiat were looking at, and had indentified, further areas for co-operation, which could include, Fidis, the Fiat Group's finance arm as well as services and computer systems.
Analysts also point out that the price paid for the remaining 80% would not bear any relationship to the $2.4 billion paid in the initial deal, a figure which included setting up the joint ventures.
Following
on from the ending of car production at the Rivalta plant, Fiat have announced
that the Panda line will close at the end of the year when production of
the 22-year old model ceases.
Adding
to Fiat's troubles, last month Fiat' Auto's share of the domestic Italian
car market slumped to an all time low as foreign rivals made major inroads.
Fiat Group sales of 64,950 units, which include the Alfa Romeo and Lancia
brands was down 16.8% year on year. Figures from the transport ministry
put market share at 33.2%, down from 33.1% a year earlier and almost 1%
down from the previous month.
The
Ferrari Group which includes the Maserati luxury sportscar brand has reveral
record figures sales figures to back up their continuing on track success.
Alongside winning the Formula 1 drivers and manufacturer's titles for a
second year running, a total of 6,158 Ferrari's and Maserati's were sold
in 2001, and the books saw a marked increase in orders.
