Fiat Buys the Rest of Chrysler: What It Means to You

By Kelsey Mays

January 3, 2014

In a $4.35 billion deal announced Wednesday, Italian automaker Fiat reached an agreement to purchase the remaining 41.5 percent of Chrysler from a United Auto Workers health care trust. It’s a deal five years in the making, and one that Fiat CEO Sergio Marchionne has long wanted. The deal reportedly closes on Jan. 20.

What does it mean for car shoppers? Not much right now. Chrysler’s five brands — Chrysler, Dodge, Jeep, Ram and Fiat — have dozens of upcoming cars on the horizon, and we doubt the acquisition changes that. The automaker reintroduced Fiat to U.S. shoppers with the 500 hatchback in March 2011. The 500C convertible arrived two months later, and the four-door 500L hit dealers in June 2013.

Does the merger mean U.S. shoppers will see a flood of Fiats in the near term? Not necessarily. In fact, it could be the other way around. Fiat badly needs Chrysler; without profits from the Auburn Hills, Mich., automaker, Fiat would have lost $1.35 billion in 2012 with exchange rates at the time. A large chunk of resources from Fiat-Chrysler — if that’s the eventual name — will go to shore up Europe, where auto sales will likely end 2013 in their sixth straight annual decline. Already, Chrysler ships certain cars across the pond, some of them rebadged under Fiat’s Lancia brand.

For now, the product pipeline should stay intact. The merger should help Fiat’s finances — investors drove the Italian automaker’s stock higher after the news — and that lowers the risk of canceled products. It’s hard to say where Fiat-Chrysler’s eventual focus will go, but Chrysler has established roots in the U.S., and it’s hard to conceive that Fiat would weigh anchor on the world’s second-largest auto market.

Stay tuned; we’ll report any changes as we hear of them.

Senior Consumer Affairs Editor Kelsey Mays likes quality, reliability, safety and practicality. But he also likes a fair price. Email Kelsey