Afterthoughts: The Possible Suitors For An FCA Vehicle Partner

A couple of weeks ago, Fiat Chrysler Automobiles CEO Sergio Marchionne made headlines when he announced that the Chrysler 200 and Dodge Dart would run their course - i.e. no second generation. Instead, the company would focus on building utility vehicles. This threw everyone in the automotive press into a frenzy with equal groups calling Marchionne a genius or a lunatic. But Marchionne also mentioned that the 200 and Dart could continue on if a partner could be found and build vehicles under a contract, a.k.a. badge engineering.

This move presents a lot of risk for FCA. Badge engineered vehicles have never been a true success for anyone. There is also an added risk of trying to find the right partner to build these new vehicles.

I have decided to figure out a possible list of suitors that FCA could go for. Some of these suitors have a history with the brand while others don’t have any history at all.

Mitsubishi - Chances of happening: 1 to 10%
The Japanese automaker has a long history with Chrysler. During the late 70’s to mid-nineties, Chrysler imported a number of Mitsubishi vehicles to rebadge and sell (Colt, Colt Vista, Conquest, and Sapporo to name a few). Then there was Diamond Star Motors - a joint venture between the two of developing and building a group of coupes - Eagle Talon, Mitsubishi Eclipse, and Plymouth Laser. Even now, Mitsubishi allows Chrysler to sell a rebadged version of the Mirage G4 sedan - the Dodge Attitude in Mexico.

But Mitsubishi doesn’t have a midsize sedan. A few years back, the company announced a joint partnership with Nissan/Renault to develop a new midsize sedan. However the partnership was dissolved and Mitsubishi was back to square one. Then there is the case of the Lancer compact sedan. While most automakers have introduced new or refreshed versions, the Lancer has stayed the same. More concerning is Mitsubishi not having a real plan for the next one or a timeframe.

To put it bluntly, Mitsubishi is currently marooned at sea with no sign of help coming for their car lineup.

But Hyundai is very constrained on production. All of Hyundai’s factories are working overtime on getting vehicles onto dealer lots. Hyundai is also beginning to change some of their production capacity to focus on building crossovers to meet the growing demand for utility vehicles. The possibility of FCA getting any vehicles are very slim.

But this partnership could bring some problems. If Mazda was to give the 3 and 6 to FCA, they would be essentially competing with itself. Also, would FCA want to make any changes to the 3 and 6? They already did this with the 124 Spider and there are concerns about reliability due to the changes made.

But Volkswagen is currently dealing with the fallout of the diesel emission scandal and doing a partnership with an another automaker isn’t at the top of their priority list. Also, would you really want to drive a Chrysler Passat? How about a Dodge Jetta?

But there are a number of problems with this solution. If a deal was reached, getting the vehicles into the U.S. Market would take a fair amount of time and money - getting it certified, making changes, performing emission and crash tests. Also, PSA Peugeot Citroen is still in a recovery process after being very close to bankruptcy two years back. They announced a profit in the first half of 2015 and sales are starting to climb back. Considering something like this would be considered too risky for French automaker.

Chinese Automaker: Chances of happening: 1 to 10%
The last possibility for a possible partnership is going with one of the Chinese automakers. A number have expressed interest in selling vehicles in the U.S., and a few have come to the various auto shows to gauge interest. But no one has made the full commitment. If FCA was to somehow to make a partnership with a Chinese automaker, it could give them an idea of how their models could fare.

But there is a glaring issue with this - aside from the concerns about safety and quality. There is already a sentiment of people who don’t like the idea of automakers of importing vehicles built in China - the Volvo S60 Inscription and soon the Buick Envision. If FCA was to import Chinese vehicles wearing Chrysler and Dodge badges, this could end up a disaster in the court of public opinion.

So there is the list of possible contenders that FCA could partner with. We’ll have to sit and wait to see if FCA makes any decision on a possible partnership. But one thing is clear, there is a small group of automakers that would even entertain this.