Chrysler, VW Getting Closer?

The ink is hardly dry on the Chrysler-Daimler divorce papers, but already, another German carmaker could be waiting in the wings for the American carmaker.
David Cole, chairman of the Center For Automotive Research, said competition is forcing automakers to consider options they might not have contemplated only 12 months ago.

"There is going to be another round of mergers in the auto industry and the one company that matches up well with Volkswagen is Chrysler," he noted.

Volkswagen already has a joint project with Chrysler to develop a new minivan, which will be assembled by Chrysler in the next couple of years and will be sold in the U.S.

"VW needs a strong presence in North America. In a complimentary and synergistic relationship, Chrysler has got a lot to offer. The scale that General Motors and Toyota have are absolute killers. The only thing you can do is match up to them. GM will have taken $5,000 out of the cost of a car soon," Cole noted.

Carlos Ghosn, the chairman of Renault/Nissan, has expressed an interest in Chrysler, Cole said. Ghosn said he had not spoken with anybody at Chrysler about an alliance. However, he noted, for strategic reasons, the Renault-Nissan alliance needed to bolster its relatively small presence in North America.

Cole, however, said there is little doubt VW is going to have to move quickly to develop a new North American strategy. A new study by CAR indicated autoworkers in western Europe are making almost $10 more per hour than their counterparts in the U.S. The study was finished even before the U.S. dollar began its most recent slide. The Car Connection