By Gilles Castonguay
MILAN--Fiat SpA's (F.MI) chief executive Sunday said he expects
to complete the acquisition of Chrysler Group LLC sometime in 2014
once an agreement is reached over the price for the remaining stake
in the U.S. unit that the Italian automaker doesn't already
own.
"We will resolve it in 2014," Sergio Marchionne told a forum in
the Italian city of Turin where he was being interviewed by an
editor of la Repubblica, the newspaper hosting the event.
Fiat and the Voluntary Employee Beneficiary Association, or
VEBA, which owns 41.5% of Chrysler, disagree over the valuation of
a call option that Fiat exercised last July to buy a 3.3% stake.
They have gone to court to sort out the valuation.
The Italian automaker offered the trust, $139.7 million to buy
the stake and has since proposed paying $198 million for another
3.3% stake. But VEBA wants about $343 million for the first
stake.
Mr. Marchionne has previously set 2015 as the deadline for
completing the acquisition, and Fiat's gradual takeover of Chrysler
is helping it augment its economies of scale to better compete
against its rivals in the global market.
It's developing new models with Chrysler for a number of brands,
as well as sharing parts, platforms and plants to become a more
efficient manufacturer.
It is also taking advantage of Chrysler's dealership network in
the U.S. to sell its own cars and reduce its exposure to Europe,
where its mass-market brands like Fiat lost more than 700 million
euros ($954.75 billion) at the operating level last year because of
the market's dismal performance with no sign of recovery.
Mr. Marchionne is overseeing a new plan to revive Fiat's
underused manufacturing base in Italy by exporting cars from its
premium brands Maserati and Alfa Romeo to the U.S. where demand has
returned with strength.
His plan is also focused on the utilitarian side of the
automaker's namesake Fiat brand, represented by the Panda
hatchback, which is sold in Europe.
"We'll probably do another Panda--a Panda X--one that would be a
little longer (in body)," he said.
Mr. Marchionne said Fiat was considering making a car to respond
to the growing market for low-cost models, as exemplified by the
success of Renault SA's (RNO.FR) Dacia brand in Europe. But he said
such a car would not be made in Italy.
He said the premium end of the U.S. market, which is being
coveted by the likes of Volkswagen AG's (VOW.XE) Audi and BMW AG
(BMW.XE), had yet to become saturated.
Last Wednesday, he attended the inauguration of a plant near
Turin where Maserati will make two new models for the U.S., its
biggest market.
"If we're intelligent we will do something very, very different
than the Germans in America," he told the forum, broadcast on the
Internet.
Mr. Marchionne said Fiat's historic Mirafiori plant in its home
town of Turin was the next one to dedicate itself to making premium
cars. He declined to elaborate, but union officials have said one
of the models would be a new sport utility vehicle for
Maserati.
Mr. Marchionne confirmed the arrival of the Alfa Romeo
two-seater 4C to mark the other premium brand's return to the U.S.
in late 2013, adding that it would be followed by a second model in
2014. "They're arriving--one at a time," he said, before
reiterating his refusal to sell the brand to VW despite the German
automakers interest.
Mr. Marchionne acknowledged the disadvantage of exporting cars
to the U.S., saying it added about EUR2,000 per unit in additional
costs.
Fiat hopes to mitigate that cost by exporting only premium cars,
which generate more of a profit than those from its mass-market
brands.
Write to Gilles Castonguay at gilles.castonguay@dowjones.com;
Twitter: @GRCastonguay
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