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DATE News (chronologically)
10/22/10
automotive
Fiat poised to raise stake in Chrysler to 35 percent
Fiat SpA will have completed the measures required to increase its stake in Chrysler Group LLC next year to 35 percent, up from the current 20 percent, Sergio Marchionne, CEO of both automakers, said Thursday.

The actions required to increase Fiat's stake in Chrysler were established when the two companies formed a partnership in 2009. They include launching the tiny Fiat 500 in the United States later this year with a fuel-efficient four-cylinder engine and the possibility of a new 85-horsepower two-cylinder engine.

The second step is a new Dodge compact car, based on the Alfa Romeo Giulietta that is being engineered to meet the specifications of the North American market. The new Dodge, which will replace the Caliber hatchback, will hit the market late next year and achieve 40 mpg.

The third requirement is international distribution of Chrysler products, which Marchionne said has suffered a setback in Latin America. Still, he remains hopeful issues involving regulations of the dealer network in Brazil will be resolved by year's end. Fiat has assumed responsibility for distribution of Chrysler vehicles in Europe.

Marchionne said there is no immediate need to exercise the right to raise Fiat's stake above 51 percent, nor is it legally feasible until Chrysler has repaid the loans it received in 2009 from the U.S. and Canadian governments.

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