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May 21, 2008

ITALY: Fiat needs partner for US entry – Marchionne

Fiat Group boss Sergio Marchionne believes that the Fiat brand has an opportunity to enter the US market but that it needs a partner on the distribution side.

Fiat Group boss Sergio Marchionne believes that the Fiat brand has an opportunity to enter the US market but that it needs a partner on the distribution side.

The group is already plotting a return to the US for its Alfa. Romeo brand via a manufacturing base in Mexico, but Marchionne would also like to see the Fiat brand back on sale there.

After several decades, Fiat pulled out in the early 1980s and Alfa. in the 1990s – both brands were doomed in the ultra-competitive US by quality issues and a spartan, poorly-performing dealer network.

Speaking at Automotive News Europe’s Congress in Turin last night, Marchionne maintained that, despite explosive growth in emerging markets, the US is a market that Fiat cannot afford to ignore.

He told delegates that distribution rather than manufacturing is a key challenge for Fiat in setting a strategy for the US.

“The real issue for us in the US is distribution. If we could find an arrangement with an automotive manufacturer in the US that would allow for both manufacturing and distribution that could be wrapped up in one package I think we would do it.”

Daimler’s Smart took the ‘partner’ route into the US last year, agreeing a distribution and retailing deal with Penske , a major nationwide dealer group, with the cars imported from France.

Marchionne also sees an opportunity for the new Fiat 500 model range in the US.

“I am convinced that the full range of the Cinquecento would be a huge smash in the US if we do it right,” he said.

“I think the full Cinquecento product range is a brand within a brand and can probably carry the market – we’re looking real hard at this now.”

Dave Leggett

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