It is widely acknowledged that, under CEO Sergio Marchionne, Fiat Group‘s reputation has been transformed. The runaway success of the new-generation Fiat 500 car has been a major factor. So too has the key stake in Chrysler, acquired in the face of Daimler‘s earlier failure to make the smallest of the US ‘Big Three’ vehicle manufacturers profitable.
For Fiat to take on the Chrysler challenge which had signally beaten Daimler shows a level of bravery which in Stuttgart might be interpreted rather as foolhardiness. It is clear that Marchionne’s ambitions for Fiat are not confined to the passenger car and light truck segment. Following the recently confirmed division of the group into two commercially separate car and industrial product businesses, he has indicated that its Iveco truck-building operations, far from becoming a takeover target, would be more likely to seek acquisitions.
Marchionne has said Fiat Industrial would be interested in acquiring from Volkswagen the stakes it holds in MAN and Scania, to complement Iveco.
As reported by AutomotiveWorld.com on 11 January 2011, Marchionne has said Fiat Industrial would be interested in acquiring from Volkswagen the stakes it holds in MAN and Scania, to complement Iveco. Were it not for his hitherto glittering track record on the 500 and Chrysler, most commercial vehicle industry observers would question the sanity of those recently-expressed aspirations.
Volkswagen has battled hard, via numerous financial twists and turns, to gain a major foothold in the truck market, through the acquisition of effectively controlling shares in both Scania and MAN. Ferdinand Piech has set his sights on global truck as well as car domination. When VW’s long-established heavy truck business in Brazil – since last year operating under the MAN banner – is taken into account, Piech’s ambitions are well advanced, at least in the heavy, over-16 tonne, segment. If lighter chassis, down to say 7.5 tonnes GVW, are taken into account however, the global market shares of VW’s two main rivals Daimler and Volvo cannot be challenged.
If Iveco were, hypothetically, to be added to the Scania-MAN mix, under the Fiat or, for that matter, the VW umbrella, the combine would be unassailable, as the world’s largest full-range truck producer. But it all remains a big ‘if’. The three heavy truck ranges, from Sweden, Germany and Italy, have little in common, certainly in customer perception terms, with Scania at the top and MAN close behind, but with Iveco at the bottom, those positions being indicated by the respective levels of discount ‘extracted’ by hard-bargaining fleet customers through the recent downturn.
VW is financially so strong that the likelihood of it needing or wanting to divest itself of its truck assets is extremely remote.
Any attempt by Fiat to rationalise specifications between the three marques, should they fall under its control, would risk devaluing Scania’s image and reputation – a risk that also looms, to a lesser degree, should VW try to merge the Swedish and German truck engineering teams.
To accuse someone of Marchionne’s reputation of megalomania in his Detroit Motor Show comments would be going too far. But he must have realised he was on fairly safe ground, because VW is financially so strong that the likelihood of it needing or wanting to divest itself of its truck assets is extremely remote.
The opinions expressed here are those of the author and do not necessarily reflect the positions of Automotive World Ltd.
