Tuesday, May 5, 2009

Chrysler deal: bankruptcy, bailout, merger with Fiat - but will anyone buy their cars?

Fiat Multipla: Americans can't wait to get behind the wheel of one of these cool babies

Mickey Kaus is on the Chrysler case. He points out that Feds have put $10 billion (and counting) into propping up Chrysler, which is merging with Fiat, and now "projects" (a bit too conveniently) that it will turn a profit in 2012 after losing more than $25 billion in two years and seeing its sales collapse to nothing. Mickey asks the obvious question: "Who is going to buy the New Chrysler's cars?"

Not me, that's for sure, and not many other Americans either. Mickey spotlights the fact that of 15 auto makers rated for reliability and performance in 2009 by Consumer Reports, Chrysler came in 15th!

Ah, you say, but what about those nifty little Fiats? Chrysler can add them to the inventory throughout its dealer network, and presto, sales and profits. Michigan Governor Jennifer Granholm is so smitten with the Italian buggies that she's wooing the company into building them in her state (she is probably right to figure there will be plenty of manufacturing capacity there).
The last time Fiat tried to sell cars in the U.S. -- in the 1970s -- it flopped, mainly on poor reliability compared to the equally small Japanese and German imports. A reputation for producing essentially crap cars has dogged the company in the European market, too. Lately, however, it has supposedly made great strides at improvement, a story line that has appeared in many American news accounts of the prospects for new Chrysler-Fiat alliance.

Alas, Fiats are still not getting the love they think they deserve. A writer for Consumer Reports took the trouble to publish this account of the 2008 Brand Reliability Index produced by Which? Car, an independent British outfit similar to Consumer Reports. The money paragraph:
Among the 38 brands featured in Which? Car, Fiat ranked 35th, followed by Renault, Land Rover, and Chrysler/Dodge. Jeep is the highest-rated brand from Chrysler, with its 29th place just barely keeping it in the “Poor” category. Fiat, Chrysler, and Dodge are categorized as “Very poor.” In total, Fiat, Chrysler, and Dodge provide similar reliability, and it isn’t good.
The writer concludes that since both Chrysler and Fiat make crap cars, their combination will truly be a "merger of equals."
What do you think? Would you buy a Fiat? Post a comment.

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