Machinations in the Global Automotive Industry: The Fiat and Chrysler Deal Examined

The national auto industries of Italy and the United States have much more in common than meets the eye. Both nations are proud and passionate of their motor vehicle industry. The automotive industry in both countries have until recently prospered from increased consumer demand enjoying an effective monopoly/oligopoly in their home jurisdictions. However, globalization of automotive services, along with the recent global financial crisis has placed increased financial and economic pressure on Fiat and Chrysler. The challenges are not unique to Fiat or Chrysler, nor to Italy or the United States. The motor vehicle industry is a capital intensive business. Falling auto revenues, rising gasoline costs, foreign competitors, frozen capital and debt markets, environmental concerns, changing consumer demand and an international recession have all contributed to significant challenges confronting the automotive industry.