Will Fiat Chrysler Rescue Mitsubishi?

Mitsubishi will supply pickup trucks to Fiat.

Mitsubishi I200 Pickup Truck
The next generation of this Mitsubishi L200 will also be sold by Fiat.

Fiat and Mitsubishi signed a “memorandum of understanding” or MOU last week, whereby the Japanese automotive manufacturer will supply 170,000 small pickup trucks to Fiat for six years reports Bloomberg. The Mitsubishi L200 is a midsize truck, one that will be sold by Fiat through its commercial vehicle arm in the Americas as well as in Europe. The US, however, is not expected to see the truck — at least not through this deal.

Mitsubishi: Back to the 1970s

The Fiat-Mitsubishi MOU once again involves Chrysler — although indirectly — a company that collaborated with Mitsubishi for decades, starting in the early 1970s when Chrysler purchased a 15 percent stake in the Japanese company. The Mitsubishi Galant got the alliance going when it was sold in America as the Dodge Colt, a full decade before Mitsubishi began selling vehicles stateside under its own banner. The two automakers continued with their relationship, later launching a joint venture in Illinois called Diamond-Star Motors.

Chrysler eventually sold its share of Diamond-Star to Mitsubishi and decreased its stake in the company, but continued to supply engines, transmissions and other parts well into the new century. After Daimler merged with Chrysler to form DaimlerChrysler (DCX), the new company took a 34 percent stake in Mitsubishi in a bid to establish a truly global presence.


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Mergers, Acquisitions and Divestures

DCX gradually sold off its share in Mitsubishi, ending the relationship two years before Daimler and Chrysler split. During that time Mitsubishi forged other alliances, including with PSA Peugeot Citroen, something it maintains to this day. Mitsubishi is also in collaboration with Renault and has worked with Volkswagen and Proton.

Fiat and Chrysler are expected to complete their merger by the end of the year with the newly-minted Fiat Chrysler Automobiles, N.V. (FCA) establishing its global headquarters in London. Feeling the financial pinch from the pending merger, FCA will not have to devote its scant resources to develop a new truck, relying on Mitsubishi to supply fresh product instead.

A Ram Dakota Replacement?

The agreement could pave the way for the truck to be sold in North America, filling an important hole in the Ram lineup, one that opened when the Dakota was discontinued following the 2011 model year. With Chevrolet and GMC returning to the segment this year in the Colorado and Canyon respectively, Chrysler could follow suit if Mitsubishi amends its MOU to add more trucks and send an additional supply to America.

An amended agreement might also help Mitsubishi gain new found traction in a market where it is averaging fewer than 6,000 sales per month. Mitsubishi sales had been on a downward spiral until this year and are now up 29 percent through August. Although a direct rescue of Mitsubishi by Fiat Chrysler isn’t likely, supplying much-needed product will aid the fortunes of all concerned.

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Photo courtesy of Mitsubishi.

Author: admin
Matt Keegan has maintained his love for cars ever since his father taught him kicking tires can be one way to uncover a problem with a vehicle’s suspension system. He since moved on to learn a few things about coefficient of drag, G-forces, toe-heel shifting, and how to work the crazy infotainment system in some random weekly driver. Matt is a member of the Washington Automotive Press Association and is a contributor to various print and online media sources.

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