Fiat’s Four-Door Crossover - Fiat 500L

Mercedes-Benz USA's smart car may not have been the booming success many had hoped for, the Fiat 500 may just be? Manufactured by the Fiat Group/Chrysler, is on a mini-roll. In less time than it takes to find a smart car center, they've opened over 125 dealerships and continue to think smarter. Realizing a one trick pony may have a long history within a circus is something to avoid. Subsequently, to ensure the Fiat 500 isn't one, they've announced plans to sell what they say will be a well-designed "B-segment" city-friendly four-door Crossover. Called the Fiat 500L, yes the L stands for large. Similar to their Fiat 500, its platform is original and expressly for the United States market. Production is scheduled to begin this summer at the same plant used in the 80's to manufacture the much maligned Yugo. You remember the Yugo? Its owner manual came with a bus schedule!

Fiat urged to buy rest of Chrysler quickly, and sell Alfa or Ferrari to do it

The Fiat 500L will be launched at the Geneva Motor Show next month and go on sale in Europe later this year. No word yet on whether it will be available in the U.S.

Chrysler made Fiat look good again in the fourth quarter, and some analysts believe the Italians should move quickly to buy all of the American operation, even if it means selling Ferrari, the jewel in the crown, or Alfa Romeo.

Selling the Ferrari supercar subsidiary would generate a scramble of potential buyers, although getting rid of storied loss-maker Alfa Romeo might be more difficult.

Bernstein Research analyst Max Warburton, commenting on Fiat-Chrysler's results, said the outlook for Fiat Auto looks poor in 2012 and it would make sense to buy the 41.5 per cent stake in Chrysler owned by the United Auto Workers health care trust. CEO Sergio Marchionne has already said he planned to do this by 2013.

"The pressure is surely on to do a deal with the UAW and buy the rest of Chrysler – either with gross cash on hand or via selling a strategic asset – Alfa or Ferrari," Warburton said.

Warburton said this would allow Chrysler's cash flow to be pooled with Fiat, and help the Italian company fight off coming hard times in Europe. Buying 75 per cent would be the minimum figure to allow Fiat to control cash flow.

Fiat's trading profit increased in the fourth quarter to $1 billion from $420 million in the same period last year, largely due to Chrysler's performance. Fiat Auto lost about $20 million compared with market expectations of a $130 million profit. Europe lost about $660 million and Brazil earned around $525 million.

Credit Suisse analyst Erich Hauser said in a report that company expectations that Chrysler will be able to come to Fiat's aid again in 2012 look difficult.

"Given that Chrysler has no major launches in '12 while the competition is near the peak of its model cadence, we struggle with such growth (18 per cent) assumptions," Hauser said.

Deutsche Bank analyst Jochen Gehrke also believed too much was being expected of Chrysler, while Fiat would struggle in loss-making Europe. Recent solid profits from Brazil would be difficult to maintain.

"We believe that Chrysler's revenue guidance of plus 20 per cent is very ambitious and also believe that rising Latin America profits are too optimistic given rising price competition. Moreover, European price competition is likely to intensify further in key markets," Gehrke said.

Source: detroitnews.com

By Neil Winton