Chrysler, Fiat to share spotlight Joint exhibit is set for Frankfurt

Chrysler and Fiat will make their first high-profile joint appearance next week at the Frankfurt Motor Show, but the real collaboration on new vehicles is still 18 months to two years away, according to analysts familiar with the companies' product strategies.
While many industry observers have been anticipating the new Chrysler-Fiat product plan, that lineup is still under review by Chrysler's board of directors, including Chrysler and Fiat CEO Sergio Marchionne. Details are expected later this year.

Last week, Chrysler said it would show in Frankfurt a new 2010 version of its Dodge Caliber hatchback that will be powered by a 2.2-liter diesel engine supplied by Mercedes-Benz and a freshly designed interior.

While the Caliber diesel is targeted at European consumers, the car and engine were in the works well before Fiat proposed a partnership with Chrysler, which was completed in June after Chrysler's 41-day journey through bankruptcy.

"Fiat hasn't been involved long enough to impact the 2010 model year," said Stephanie Brinley, an industry analyst at AutoPacific in Troy. "But it is significant that Chrysler's exhibit will share the same space as Fiat, Alfa Romeo and Lancia."

While Chrysler won't transform itself into a major European player overnight, Frankfurt marks an important first step.

Fiat has a direct incentive to help Chrysler grow outside North America. The fine print in the partners' operating agreement specifies that Fiat can expand its stake in Chrysler by another 5% by meeting several conditions.

That includes expanding Chrysler's presence in retail stores in Latin America and selling $1.5 billion worth of Chrysler, Jeep and Dodge vehicles outside of North America. Chrysler sales have a way to go to get to that level.

Between the global economic slowdown and the bankruptcy restructuring, Chrysler's overseas sales for February through August (January sales were not reported) fell 41% from a year ago to 80,687.