Fiat is setting ambitious cost-cutting targets and seeking to speed up operational co-operation between the ailing Fiat Auto arm and General Motors, the Financial Times (FT) said, citing observers of the Italian industrial group.
Go deeper with GlobalData
According to the FT, Fiat Auto and GM are outlining plans for shared inventories, car delivery and other logistical areas, while exploring increased use of common parts and platforms. Fiat is also eager to discuss greater co-operation for their large operations in Brazil and smaller ones in Asian countries.
Fiat Auto and GM, which owns 20% of the Italian car maker, last year each saved more than 350 million euros, mostly from joint purchasing, the Financial Times said, adding that, even before current talks, that figure was expected to rise to 1 billion euros in 2005, when several new models from both companies will share engines, gearboxes and platforms.
The FT said that increasing GM and Fiat Auto’s savings through greater logistical co-ordination could help induce GM to participate in a 2 billion euros capital increase that Fiat Auto plans to undertake in coming months, Fiat’s executives and bankers hope.
That in turn would ease tension over Fiat’s put option that allows it to sell the remaining 80% of Fiat Auto to GM between January 2004 and mid-2009, the FT said. Delaying the need to exercise or renegotiate the put would in turn relieve pressure from the Italian government on the Agnelli family, which controls 34% of Fiat, to keep the nation’s only car maker in Italian hands, the newspaper added.
How well do you really know your competitors?
Access the most comprehensive Company Profiles on the market, powered by GlobalData. Save hours of research. Gain competitive edge.
Thank you!
Your download email will arrive shortly
Not ready to buy yet? Download a free sample
We are confident about the unique quality of our Company Profiles. However, we want you to make the most beneficial decision for your business, so we offer a free sample that you can download by submitting the below form
By GlobalDataSee Also:
Fiat executives are hoping that improved industrial co-operation will lead in coming years to a natural “fusion” of many of Fiat Auto’s operations with GM Europe, the Financial Times said.
