Should Fiat Chrysler Automobiles CEO Sergio Marchionne stop pursuing a merger with rival General Motors, make no mistake; it’s not because Mr. Marchionne has given up. More rather, it will probably be due to FCA’s efforts toward merging with a different global automotive giant.
That’s not necessarily to say that the Fiat Chrysler Chief is giving up on a GM merger, nor is the effort failing for a lack of resolution; The Wall Street Journal (subscription required) reports that FCA has twice approached the USA’s largest automaker about buddying-up, only to be rejected.
But last week, after the Toronto Global Forum, Mr. Marchionne told members of the press that “there are other, less-optimal combinations,” although he did not specify what those possible merger partners were, nor whether Fiat Chrysler is currently pursuing any of them.
According to the Journal, Mr. Sergio Marchionne’s insistent push toward industry consolidation is rooted in a belief in the necessity of driving production costs down even further. That perceived necessity is not only to overcome new challenges like ever-strengthening safety and emissions requirements, but also to weather the invasion of the automotive industry by habitually-disruptive tech companies such as Google and Apple.
It has already been confirmed that both the aforementioned companies are secretly developing so-called “autonomous” cars.
The Fiat Chrysler Executive said that driverless cars “will be on the road in the next five years,” largely due to their intrinsic promise of improved safety. “The level of sophistication in vehicles will redefine driving,” he added.
But while General Motors already has enough immensity to absorb the increasing costs of legislative restrictions and competition from tech companies, Fiat Chrysler only sells roughly half of what each of the three biggest global automakers deal – GM, Toyota, and Volkswagen AG.
That leaves Fiat Chrysler Automobiles in a more vulnerable position to these increasing costs, and in desperate need of a friend.