Fiat path of No1 Company Strewn With Hurdles

Fiat's move to acquire auto majors like the Chrysler and GM Europe operations will have a significant effect on Indian car market. Fiat is in partnership with Tata Motors for several of its operations. If the Italian company takes over these brands, it will become one the largest car manufacturer of the world. This will the current market equations in India where General Motors and Tata Motors, apart from its own have significant market share.

Fiat is bidding to take over GM Europe operation after the successful bid on the complete Chrysler operations. It is on the verge of taking over GM's Opel brand of cars, sold in Europe. But the major hurdle seems to be the German government which is handling Opel's crisis after the parent company went into a tizzy after the recession. Fiat is yet to receive a green signal from the German government.

Fiat is being asked to provide assurances and guarantees on several Opel related topics. One of the main conditions is that Fiat should retain the entire workforce and not go for layoffs. While, Fiat has agreed to keep all Opel facilities functioning, it has not promised on the jobs cuts. The combined employee strength of all Opel facilities is that it is 25,000.

Fiat was suffering loses till 2003, but posted high profits after Mr. Sergio Machionne took over as the CEO. He is also known in the auto industry for its hire and fire policy. He told the media persons that staff levels will have to be decreased. Job cuts will be inevitable and the plants will have to be mad efficient to generate profits.

If the Opel brand is taken over by Fiat, It will add to 10 percent market share that it already commands in the European Market. General Motors also has other brands like the Saab from Sweden and Vauxhall from Britain. Talks with the Swedish government are already on for the acquisition. If Fiat acquires the entire GM Europe brand, its will become of the largest car manufacturer of the world.
Fiat has an ambitious plan to combine three big brands- Fiat, GM and Chrysler- The total production would be nearly 7 million vehicles per year. This will take Fiat near to the largest car manufacturer of the world Toyota.

Fiat is on the verge of getting the tag of the biggest brand in the world. It will command a major share of the markets world wide. It is rumoured that after Europe, Fiat may also bid for GM's Asia operations that includes some of the biggest economies like India and China. If that happens there is no stopping Fiat from realizing its dream of becoming the No1 brand of the world. In the Supercar segment, it has Ferrari and Maserati. But to become a complete auto manufacturer, fiat will have to look beyond acquisitions and provide effective solution for mobility in the world. Vehicles running on alternative fuel and electric cars are the future of world transportation. Fiat will have to provide path breaking solutions like GM did with Volt and Toyota has done with Pirus sedan.