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Strategies & Market Trends : Mish's Global Economic Trend Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Knighty Tin who wrote (36788)	9/9/2005 9:16:41 AM
From: TH	Read Replies (2) \| Respond to of 116555

KT, There was guy at Ford with that exact idea, but they fired him. This is also amusing to me. Ford (found on road dead) and Fiat (fix it again tom) are joining forces to build superlemons, um, I mean uberlemons. GT TH Ford, Fiat to develop car for Europe By Michael Shields, European Auto Correspondent FRANKFURT (Reuters) - Number two U.S. carmaker Ford Motor Co (NYSE:F - news) and Italy's Fiat (FIA.MI) will jointly develop a new platform for small cars in Europe, the partners said on Friday, highlighting the trend toward such automaking alliances. "The two new vehicles that would be involved, with highly differentiated designs, would be a new Fiat 500 and a replacement for the current Ford Ka," a joint statement said. "By working together on this project, both companies would envisage reduced development and material costs, while providing highly competitive products to the marketplace." The accord follows strategic discussions on whether to cooperate on a car in the "sub-B" sub-compact segment that would be the basis for the two models. The talks went so well that the partners signed a memorandum of understanding to proceed with the project. On Thursday, a person familiar with the matter told Reuters that Fiat and Ford were in advanced talks to cooperate on developing a small car. It is widely expected to be built at a Fiat plant in low-cost Poland, although this was not confirmed. Sanford Bernstein car sector analyst Stephen Cheetham said both partners would benefit from the deal, although it seemed Ford stood to gain even more than Fiat given the problems it had faced in replacing the Ka, its oldest and smallest model. "For them it is great because (the Ka successor) is based on a Fiat platform which is going to be low cost and manufactured in Poland and it also shifts their entry-level car to a low-cost location," he said. FIGHT IS ON The head of the Fiat brand, Luca De Meo, said this week the new Cinquecento (500), due out in 2007, would probably be built at a Polish plant that already makes the Panda and 600 models. Labour costs less there than in Italy, providing crucial savings in a tiny-car segment where competition is so tough that carmakers seek every edge to protect tight margins. France's PSA Peugeot Citroen (PEUP.PA) and Japan's Toyota (7203.T) make small cars together in the Czech Republic, Volkswagen (VOWG.DE) imports its Fox model from Brazil and GM sells South Korean-made small Chevrolets in Europe. "This is all the trend that says, actually folks, with a western Europe cost base you can't make money in this segment, so it is entirely logical," Cheetham said of the Ford/Fiat deal. Sub-compacts are still popular in Europe and may benefit from record fuel costs. They have the added advantage of letting automakers bring down average fleet emissions of carbon dioxide. Fiat has long said it wants to work with other carmakers on specific projects to reduce risks and cut costs, part of a plan to return to profit by 2007 from 2002's record loss. The 106-year-old carmaker gained more leeway in February when it divorced from strategic partner General Motors (NYSE:GM - news). Fiat already has a joint venture with PSA to make vans and together the two have a deal to make the vehicles in Turkey with carmaker Tofas (TOASO.IS). Fiat also co-developed an SUV with Suzuki (7269.T), due out late this year or in early 2006. Ford in turn develops engines with PSA. Some analysts had thought DaimlerChrysler's (DCXGn.DE) loss-making Smart unit might be a logical partner for Fiat, but DaimlerChrysler ruled out any industrial alliance on Wednesday. Fiat shares gained 0.3 percent to 7.545 euros by 1057 GMT, lagging a 0.7 percent gain in the European car sector (^SXAP - news). news.yahoo.com