Fiat gets additional five per cent stake in Chrysler
05 January 2012
Italian auto major Fiat SpA on Thursday announced an additional five per cent acquisition in Chrysler Group LLC, taking its share to 58.5 per cent, even as the American automobile sector came out with the best performance in three years, reporting a 10 per cent growth in sales.
Fiat acquired a 20-per cent stake in Chrysler – which saw a hefty 26.2 per cent jump in sales in 2011 - in June 2009 (See: Fiat completes acquisition of Chrysler), rescuing America's third-largest automaker from a government-sponsored bankruptcy deal. In 2010, it hiked its stake to 53.5 per cent after meeting the requirements in its deal with the US Treasury.
Fiat and Chrysler also committed to the Treasury on Thursday that they would produce the 2013 Dodge Dart sedan at a Chrysler plant in Illinois. The commitment to produce Dart – which will have an unadjusted combined fuel economy of 40 miles to the gallon – enabled Fiat to raise its stake by another five per cent.
''The acquisition of a further five per cent of Chrysler is a fundamental step in completion of the integration between our two groups,'' said Sergio Marchionne, chief executive of both Fiat and Chrysler. The Italian major's ownership of Chrysler – the remaining shares in the company are held by a healthcare trust that is affiliated with the United Auto Workers union – has helped it clear away US and Canadian government dues six years in advance.
In 2011, Chrysler sold 1.4 million vehicles, a 26.2 per cent growth over the previous year's sales. Importantly, in December the company saw a 37-per cent growth in US new-vehicle sales. Chrysler's share in the US market was up at 10.7 per cent.
Overall, the US auto industry reported sales of 12.8 million vehicles in 2011, a growth of 10.3 per cent. Most of the gains were reported by the big three American manufacturers: General Motors, Ford and Chrysler.