Late last week, a rumor broke out that Hyundai is considering a massive buyout of FCA.
Asia Times recently reported that Hyundai Motor Group CEO Chung Mong-koo was eyeing a possible takeover of Fiat-Chrysler Automobiles. On the heels of some of FCA’s high-profile launches, such as the new Wrangler JL and Ram 1500, the company’s stock has been falling in recent weeks. The report suggested Hyundai’s CEO anticipated a decline and could pull the trigger on a takeover bid, should share prices slip low enough. He allegedly planned to take action before FCA’s annual shareholder’s meeting next April. That’s when FCA’s current CEO Sergio Marchionne plans to retire, and the company will name his successor.
Not happening, says Hyundai rep
However, according to a recent CNET article, Hyundai Corporate and Marketing Public Relations senior group manager Michael Stewart said, “that rumor is totally groundless.” At this time, Fiat-Chrysler has not commented on the rumor. If the earlier report did in fact come to pass, Hyundai Motor Group – which also owns Genesis and Kia – would become the largest auto manufacturer in the world. FCA currently owns Fiat, Chrysler, Dodge, Ram, Jeep, Maserati, Alfa Romeo and Lancia, as well as the Mopar parts brand.
The rumor of Hyundai and FCA banding together is not unfounded. Marchionne has aggressively pursued the possibility of mergers over the years – most notably in his approach to joining forces with General Motors and its CEO, Mary Barra. Volkswagen was also floated as another potential option. Although a tie-up with Volkswagen certainly won’t happen in the wake of the internal trauma of the Dieselgate scandal. Hyundai could also provide FCA with a more cohesive electric vehicle strategy, which FCA has yet to realize.
For now, however, it doesn’t seem like a merger is in the cards. However, as the dynamics shift in future car production and trade between the U.S. and its partners, the subject may come up again. Stay tuned to TFLcar.com for more updates! Subscribe to The Fast Lane Car and TFLnow for more news, views and real-world reviews.