To gain another five percent share of the Chrysler Corporation, all Fiat needs to do is give the government a 40-mpg car.
As the Italian automaker consolidates its control over Chrysler, it will introduce a new Dodge compact car based on the European market Alfa Romeo Giulietta. Part of the agreement made by Fiat with the federal government called for five percent of Chrysler’s ownership transferring to Fiat in exchange for producing a 40-mpg highway compact car. Currently, the only compact car Chrysler sells in the U.S. is the lampooned Dodge Caliber that achieves 27 mpg highway in most configurations.
Rumors about a new compact Chrysler vehicle have swirled for some time. At the 2010 Detroit auto show, Chrysler showed a rebadged Lancia Delta compact hatchback as a concept for the brand, but chose not to sell it in the U.S. More recently, heavily camouflaged, lengthened and widened Giuliettas have been spotted testing in Michigan.
Now, we have official word by way of Bloomberg News that Chrysler will install new tooling in its Belvidere, Illinois plant for the Dodge compact in August. Pre-production factory testing will begin in the fall, and the car is expected to go into full production sometime in early 2012. In putting the car into production, Fiat will meet the last quota the U.S. government has for selling Fiat its Chrysler shares and gain another five percent stake.
As it is, Fiat took control of much of the U.S. and Canada’s stock in the Auburn Hills, Michigan-based carmaker following its 2009 bankruptcy reorganization without even having to open a checkbook. Fiat gained as much as 35 percent of its ownership of Chrysler simply through meeting performance milestones. The Italian automaker has also exercised a 16 percent stock option to purchase Chrysler shares.
With Chrysler’s gloomy not-too-distant past still in memory, all of this comes as good news that the Pentastar is here to stay with a strong commitment from Fiat to keep new and exciting cars coming. If any of Chrysler’s other recent efforts are any indication of what this car will be like, chances are it’ll be worth the wait.
Source: Bloomberg News