Chrysler And Fiat Case Study
3.4. (-- removed HTML --) Chrysler & Fiat
General Background
Chrysler and Fiat are auto mobile companies like Volkswagen and Skoda. However, unlike Volkswagen and Skoda, two companies are from far region. While Chrysler is a traditional large American automaker such as Jeep, Fiat is Italian company known for small car and delicate engine. In 2009, Chrysler and Fiat decided to merge together to synergize their respective field of expertise (Marrs, 2009). (Nilofur Abbasi, Iqra Wajid Zahra, and Iqbal Fareeha Zafar, 2014, p. )
Cultural Difference & Problem Graph 3 Source: Hofstede Insight, 2017
United States and Italy have substantial gap between each index. First difference in uncertainty avoidance. Italians detest unambiguity. So, they plan for everything. For
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As a result, there are no expected synergies. Company still prolong, but it is underperformance. In market, Fiat Chrysler is known as making worse and more expensive car than firm’s competitors,
Especially for Fiat, they are losing their markets in Europe. In 2nd quarter of 2013, they profited 224 million euros in Latin America whereas in Europe, there was no profit but only a loss of 98 million euros (Economist, 2013). Therefore, the M&A has lost its purposes
3.5. (-- removed HTML --) Renault & Nissan
General Background
10 years before Chrysler and Fiat, there was similar M&A Cases where two auto mobile companies from different nationalities joined together; Renault, and Nissan. Renault was small passenger cars in France while Nissan was the light commercial vehicles and large passenger cars maker in Japan. Unlike Chrysler case, Nissan and Renault had no choices but to merge because both companies were financially in deficit. Especially for Nissan, their market share shrank in half from 1974 to 1999. As a result, Renault-Nissan Alliance was formed.
Cultural Difference & Problem
Graph 4 Source: Hofstede Insight,
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