Dallas, Texas 06/25/2015 (Financialstrend) – Fiat Chrysler Automobiles NV (NYSE:FCAU) may be far away from a potential merger with General Motors Company (NYSE:GM), but its CEO is remaining confident that such a merger could happen. General Motors has already refuted suggestions that it is considering tabling a bid.
Need For Consolidation
CEO, Sergio Marchionne, has from time to time reiterated that the only way automakers can generate a sizeable amount of profit going forward is by consolidating their efforts by merging. Marchionne fears that the wave of spending in the industry that nears $2.2 billion a week on developing new cars could weigh in on profit margins going forward.
The executive sees consolidation as one of the most effective ways of sharing the burden of spending on research and development. As more automakers try to develop autonomous cars, Marchionne believes this could be the perfect time to merge in a bid of enhancing the technology while spending less on research and development.
However, the Fiat Chrysler Automobiles NV (NYSE:FCAU) chief calls continue to fall on deaf ears as most of the players in the industry continue to register impressive sales. Plunging oil prices has allowed many customers to spend a great deal on fuel guzzlers much to the benefit of the likes of General Motors Company (NYSE:GM).
FIAT Looking Beyond GM
People familiar with the matter say that Fiat Chrysler Automobiles NV (NYSE:FCAU) is looking beyond GM for potential merger partners. GM has remained reluctant on showing interest in the London-based company as it continues to register impressive cars sales in the European and North American markets.
Marchionne has reportedly been working with an advisory firm as he tries to gauge investor interest in pushing for a merger with GM. FIAT sees GM as perfect merger partner as they both have the similar product range and remain focused on providing opportunities for cost saving.
However, chances of Fiat Chrysler Automobiles NV (NYSE:FCAU) luring a friendly deal from GM are fading away as the latter’s board remains firm on going all the way alone.