Fiat To Own 30% of Chrysler “Within Weeks”

via onlineautobrochure.com

 

Automotive News [sub] reports that Fiat is “weeks” away from concluding an agreement in which 90 percent of its Latin American dealers will sell Chrysler vehicles, triggering a government clause that will increase Fiat’s stake in Chrysler from 25% to 30%. Known as the “Non-Nafta Distribution Event” in the Chrysler operating agreement, it calls specifically for

execution by the Company of one or more franchise agreements covering in the aggregate at least ninety percent (90%) of the total Fiat Group Automobiles S.p.A. dealers in Latin America pursuant to which such dealers will carry Company products.

And that’s it. Why does it matter that this agreement isn’t any more specific? Because Fiat has no plans to sell any Chrysler Group brands anywhere. Products, yes. Brands, no.

According to AN’s report

CEO Sergio Marchionne plans to sell Chrysler models under the Fiat brand in Brazil to reach the first goal that 90 percent of Fiat’s Latin American dealers offer Chrysler vehicles, the people said, declining to be identified because the plans are private.

The plan would allow Marchionne to sidestep negotiations with dealers on Chrysler contracts and avoid the cost of introducing the brand in Brazil, where Fiat has the largest share of the market, one of the people said. Continue reading here.