Strategic Alliances, Collaboration and Joint Ventures Case Study

Strategic Alliance with Fiat: A Lifeline for Chrysler?

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Abstract:
On 20 January 2009, the Italian Fiat and US automaker Chrysler LLC announced that they have a non-binding term sheet to form a global alliance. According to the deal, the Italian automobile empire would get a 35% stake in the US car maker. The alliance would help Fiat to gain access to US markets and also to more competitive products in the automotive industry. For Chrysler the deal would mean breaking out of the US market where its independent survival is at stake. From this strategic deal Chrysler hopes to bounce back from deteriorating losses subject to slow selling trucks and sport utility vehicles. The case focuses on the journey of Chrysler and also brings forth the contribution this alliance would bring about.

Pedagogical Objectives:

This case study aims at achieving the following pedagogical objectives:
• To understand the dynamics of the US automotive industry.
• To examine the factors responsible for the downfall of automobile giant Chrysler.
• To analyse the rationale behind the Fiat and Chrysler alliance.

Keywords :  Automobile industry, US, Chrysler, Fiat, Mass production, Depression, Unibody construction, Gas crisis, Bankruptcy, DaimlerChrysler, Alliance, Cerberus capital management

Contents : 
US Automobile Industry: Rough Ride
Chrysler’s Journey: Rise and Fall
Chrysler’s Market Share in the US
Fiat-Chrysler Alliance
Percentage Growth of US Major Automakers
Acquisitions and Joint Ventures by Chrysler in 1980s