Euro car firms cooperate to cut costs and crack the US

Posted on 9 Jul 2008 by The Manufacturer

Fiat and BMW are reportedly set to enter into a cooperative partnership to benefit from economies of scale in production and research and development. The move will concern Fiat’s Alfa Romeo lines and the BMW-owned Mini.

In the proposal, the type of which is becoming increasingly common in the automotive sector as firms look to overcome various industry challenges, the two European producers, Italian and German respectively, will explore the possibility of a shared engine and common platforms for models.

Minis are currently made in the UK, at BMW’s Cowley plant in Oxfordshire.

The move aims to capitalise on a world consumer market trend towards smaller, economic models as fuel and oil prices continue to rise and environmental ideals are increasingly adopted. There are also plans for BMW to aid Fiat’s route into the US market where it does not currently operate, and where BMW will attempt to “replicate the Mini phenomenon” in Europe. Both Alfa Romeo and Mini are considered subsidiary lines for their parent companies but efforts to increase their prevalence through this proposal are expected.

“The proposed co-operation with BMW is a significant cornerstone of our strategy of alliances,” said Fiat’s chief executive, Sergio Marchionne.

“We are delighted to work with such as esteemed and respected partner in the automotive industry,” he added.