The head of Fiat Chrysler is now appealing to activist investors and hedge funds to put pressure on General Motors to discuss a merger, according to the Wall St. Journal. Sergio Marchionne has been pushing for an industry consolidation to help develop new models but thus far has had no takers. An earlier appeal to GM CEO Mary Barra went nowhere.
Candidly, looking from the outside in, there is little that Fiat Chrysler can offer to a potential suitor beyond the Jeep brand. Ford and GM already offer a wide variety of cars and trucks, as do many potential partners in Europe. What they don’t offer, in many cases, is an off road Jeep.
An earlier report citing suppliers said Fiat Chrysler is delaying the introduction of about a dozen future models, but the reason for that move is unclear. An Initial Public Offering of shares in Ferrari has also been delayed.
European stock analysts say Fiat Chrysler suffered during the European financial crisis and carries a large debt load.
It is worth noting that company sales here in the U.S. rose well above expectations last month, up four percent, thanks to Jeep, Ram Trucks, and increased demand for the Chrysler 200.
The company announced its upcoming Ram Rebel pickup will carry a starting price of $42,790 and its luxury Ram Laramie Limited will base at $50,675. Both will carry distinctive grilles with the Limited aimed at the growing number of customers who demand luxury items in their new pick’m up.
Citing higher costs for raw materials and the growing strength of the South Korean currency, Hyundai and Kia are in a cost cutting mode. Reports say the two companies have asked suppliers to lower their prices but they insist R&D will not be trimmed. In May, Hyundai sales fell 10 percent here in the U.S. as consumers looked elsewhere for big trucks and SUV’s while Kia reported its best month ever with demand strong for the Sorento and Sportage.