There have been some new stories surfacing lately of Fiat showing interest in partnering with Mazda or Suzuki.
Although Mazda’s U.S. sales are surging this year, up 48% through February, the company has forecast a 1.2 billion dollar loss after the appreciation of the yen and the losses it faced due to last year’s tragic Tsunami.
Mazda President Takashi Yamanouchi said last month that the company was “aggressively “looking for a partner and at the Geneva International Motor Show early this month, Fiat Chief Executive Officer, Sergio Marchionne, said he’s searching for a third partner after merging with Chrysler Group LLC to help reduce development costs and boost sales in fast-growing countries, and said teaming with either Suzuki Motor Corp. or Mazda Motor Corp makes sense.
I can see the benefit of partnering with another manufacturer to increase the production base outside of Japan. The exchange rate has been hard on Mazdas profits despite setting sales records in several markets around the planet and increased sales in North America. Mazda is currently building a plant in Mexico to service the Americas. It is a completely owned Mazda production facility and it should benefit Mazda greatly over the next few decades but the outlay of initial cash is pretty heavy at 500 million USD.
With the extra capacity at the plants in Europe that Fiat offers Mazda could leverage a better position and reduce costs and prices of vehicles sold there. If it was just a deal worked out with Mazda have vehicle produced in Fiats plants it would be a good match. Fiat would have the extra capacity used up and Mazda would not have the investment of a new production plant. Cars built in Europe would also avoid the import duties thus making Mazdas more attractive with lower prices.
Recently Fiat partnered with the cripple Chrysler group and they appear to have the ship turned around now and headed in the right direction.
If this partnership comes to be, only time will tell if it will benefit both Fiat and Mazda in the end.
-Derrick