Fiat and Chrysler in partnership talks

Chrysler, the poster child for the automotive apocalypse, has decided to keep the rumor mill working overtime as Automotive News Europe is reporting that the company is currently in negotiations with Fiat. Unlike previous reports it appears the two are working on creating a platform sharing agreement instead of a merger or acquisition of Chrysler or one of its brands.

Chrysler appears to be interested in gaining from Fiat's vast experience with small and midsize vehicle production and design, something that Chrysler has continually faulted at. If such an agreement were to be reached, it could provide Chrysler with a variety of small fuel efficient vehicles that could go into production relatively fast.

Domestic rivals, GM and Ford, have tapped into their European vehicle portfolio in order to bring efficient models such as the Fiesta and Astra to the US quickly, with more expected in the near future. This should help them meet the new fuel economy requirements that are expected to be packaged into any future government loan package as well as providing them with insurance against a sudden spike in gasoline prices which would result in a run on smaller more fuel efficient models. Chrysler lacks a specific European model lineup, so a partnership with Fiat has the potential to make a lot of sense, especially considering the subpar Dodge Caliber and Chrysler Sebring.

While it is unclear what specifics are being discussed, Fiat would most likely be interested in gaining access to Chrysler's dealer network and production capacity, something Chrysler currently has too much. Fiat's CEO Sergio Marchionne had previously stated that he wanted to bring the Fiat 500 to the United States but would only consider doing so if it could be produced locally.

Chrysler currently has an agreement with Nissan to introduce a version of the Nissan Versa to the United States in 2010, just two years after it went on sale as the Dodge Trazo in South America. Meanwhile Chrysler recently announced that it had ended negotiations with Chery to build a Dodge mini-car in China for global consumption.