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Old 24th September 2013, 18:03   #1
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Default Fiat to take full control of VM Motori

The Italian carmaker Fiat (FIA.MI) is planning to take full control of the diesel engine manufacturer VM Motori by buying out the half of the company owned by joint venture partner General Motors (GM.N), Fiat said on Saturday.

VM Motori, based in the northern Italian city of Cento, is currently a 50:50 JV between Fiat and GM.

The plant supplies engines for various car models, including the Jeep Wrangler and Jeep Grand Cherokee.

"GM's notification to exercise its put option to sell to Fiat its 50 percent interest in VM Motori SpA is in line with the contracts Fiat entered into when it acquired a 50 percent stake in VM in 2010," Fiat said in an emailed statement.

"The transaction's satisfactory conclusion is expected before year-end and is conditional upon the requisite regulatory approvals."

The company did not give a value for the deal.

Source :http://www.reuters.com/article/2013/...98K0A320130921
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Old 24th September 2013, 21:48   #2
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Default re: Fiat to take full control of VM Motori

It ain't going to happen. And it isn't good for them either.

My reasons being.
- Europe is in crisis. Not the right time to invest more money. It could be taken otherwise. But GM is good when it comes to trade negotiations.
- They earned less than what others earned from that engine. Now they want their cash cow back. And, Boy !! This isn't the way you play a game.
- I see it as a wrong strategy. First priority of theirs should be.

1) Europe is in crisis, so they should be able to generate revenue & profits from other markets. So Expand into New markets.
2) Brand presence should be improved by entering multiple markets.
People see Volkswagen as a great company. They should aspire and work towards such brand image.
3) Last but not the least. They could manufacture any number of cars using that Tech. And that too without paying any one. Why not capitalize it. Why to re buy the sold cow again? What would they do, if honda starts selling its IDTEC ?

They had technology, they had cars, they got seperated from tata around 2 years ago (as far as i remember.) And till date, they have no guts to launch new cars. Where is Panda? Where is Jeep? Where is a mini SUV? where is a ultra low cost car, in Estilo range? Where is Alfa Romeo?

They have launched the atrocious Fiat 500 @ 15 Lakhs just because it was a CKD. And they are one of those who have one of the biggest factories in india.

They are good at burning time pondering on what to be launched and when, and that too to grab significant market share of 5 - 7% which honda doesn't have till date. They never learn. Saying based on my 6+ years of association Owning FIAT.
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