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Volkswagen, Fiat Chrysler May Reach an Agreement on Mergers Soon

By Charles Omedo , Mar 15, 2017 05:27 AM EDT
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Indications emerged last week at the 2017 Geneva Motor Show that Volkswagen and Fiat Chrysler may consider a merger soon. This became evident as Volkswagen CEO, Matthias Mueller, stated that he looks forward to having merger talks with Fiat Chrysler CEO Sergio Marchionne whenever the latter is ready. Both Volkswagen and Fiat Chrysler are auto rivals, but developments in the industry are forcing great auto companies to partner for consolidation purposes.

Self-driving cars, electric cars, ride-hailing services threatening the industry

Volkswagen is a German automaker and Fiat Chrysler is an Italian-American auto company. Marchionne of Chrysler had always advocated for the auto industry to merge together with the aim of producing greener cars with better technologies. He had often voiced his concerns to the media but many other auto competitors have not taken him seriously, key among these was General Motors which rejected a proposed deal a few months back, USA TODAY reports.

Autonomous self-driving cars, electric vehicles, and ride-hailing service apps are now constituting a kind of threat to the auto industry. Not to mention the fact that several automakers wage a battle of their own; for instance, Fiat Chrysler is not as financially buoyant as the other automakers, and Volkswagen is still staggered by a fraudulent emission war. These among other considerations are making weaker and threatened automakers to consider mergers as the only way out, Fox Business wrote.

Mueller is reconsidering merger talks in a turnaround requirement

Although Mueller had said at the Geneva Motor Show that he is "pretty confident about the future of Volkswagen, with or without Marchionne," he still went ahead to say he would be open to talking mergers with the Chrysler boss if the need ever arose. Mueller had earlier dismissed any prospects for merger talks with Marchionne, but he has since turned around to desire a talk on the matter. According to him, he would be glad to chat with Marchionne, but then "it would be very helpful if Mr. Marchionne were to communicate his considerations to me too, and not just to you [the media]".

Volkswagen is a popular automaker with several brands, and Fiat Chrysler produces Jeep and Ram car brands in the US as well as Dodge, Chrysler, and Fiat. It is debatable that Marchionne may take up the challenge and contact Mueller for merger talks, given that he is saddled with leaving Fiat Chrysler in a better shape before his retirement early 2019. Spokespersons of both companies have not really said much about the proposed merger talks.

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