Fiat Auto spinoff plan on the table
Marchionne says 'hypothesis' addressed in April 21 business plan
03 March, 15:56
(ANSA) - Geneva, March 3 - The possibility of Fiat spinning
off its automobile division will be addressed when the group
presents its new business plan on April 21, CEO Sergio
Marchionne said on Wednesday.Speaking on the sidelines of the Geneva automobile show, Marchionne said "the option of spinning off the auto division is a very complex one. It is part of a framework of hypotheses which we are analysing very carefully. We'll see on April 21".
Two years ago, Marchionne told Fiat shareholders that spinning off Fiat Group Automobiles (FGA) - which includes the Fiat, Lancia and Alfa Romeo marques - was a "hypothetical possibility" but that 'we have not taken any steps in that direction".
Speculation that a spinoff may be on the horizon mounted after Fiat last year acquired control of US automaker Chrysler and hit a peak when it was in the running to take over General Motors' European division, which produces Opel in Germany and Vauxhall in Britain.
The spinoff plan, however, was put on hold last July when Fiat appeared to lose out to Canadian-Austrian autoparts-maker Magna International in its bid for Opel.
The GM-Magna deal later ran aground and the US automaker has now decided to hold on to its European division.
Spinning off FGA and merging it with Chrysler, which includes Jeep, and possibly other marques in the future is in line with Marchionne's view that "in the not-too-distant future our industry will have five or six producers each with a minimum market of five million cars''.
Fiat acquired 20% and management control of Chrysler last year in a non-cash deal in exchange for its cutting-edge green and small car technology.
Aside from trying to revive the American marque, Fiat plans to use its American production facilities, sales and service network to reintroduce Fiat and Alfa Romeo to the lucrative US market.
Marchionne said on Wednesday that a plan to return Alfa romeo to the US would also be illustrated on April 21.
Once Fiat begins producing its own cars in the US it will be able to increase its stake in Chrysler to 35%.
Fiat has an option to take a majority interest in Chrysler once federal bailout loans have been repaid.
