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by Brett Davis

Recent international reports have revealed that Fiat is planning to raise its stake in Chrysler from 25 to 30 percent as the company plans to pass two sets of performance criteria set by the US government. According to a Bloomberg News report, two sources have revealed the plans made by Fiat boss, Sergio Marchionne.

The first performance criteria involves releasing Chrysler-badged Fiat models in Latin America. The US government wants Fiat to introduce Chrysler models into 90 percent of Latin American Fiat showrooms. Mr Marchionne will apparently open up availability of Chrysler-badged Fiat models in Brazil in particular as Fiat is the number one auto brand in the country.

Chrysler only has around 35 dealerships in Latin America compared with Fiat which has around 700 dealerships – 550 of which are in Brazil. By releasing Chrysler models in Latin America, Fiat, and more importantly, Chrysler, will not have to spend money on creating new dealerships. With Fiat being the number one auto brand in Brazil though, Chrysler will be able to capitalise on publicity created by Fiat by joining many of its showrooms.

The second performance criteria set by the US government includes having $1.5 billion in revenue outside North America. Since Fiat has already managed this the company hopes to obtain the additional five percent ownership within weeks.

Mr Machionne isn’t planning on stopping there though. He is aiming for Fiat to hold a 51 percent stake in Chrysler by the end of 2011. To do this Fiat must pass one more set of criteria which involves Chrysler releasing a Fiat-based car in America that consumes around 5.9L/100km.

After it does that Fiat will be able to own 35 percent stake. The remaining 16 percent will then have to be bought outright.




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