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FCA already buys components from Hyundai; denies any chance of merger between two companies

Fiat Chrysler Automobiles (FCA) is mulling the possibility of a technical partnership with South Korean auto giant Hyundai. While FCA has been at the centre of merger speculation in recent past, this partnership is very unlikely to turn into the merger of these two auto giants, as FCA chief executive Sergio Marchionne has said.

Currently, FCA purchases components from Hyundai and under their possible technical partnership, the two auto manufacturers can work for the development of transmissions and hydrogen fuel cell technology. This way, both the brands will be able to cut down production cost and they will significantly advance towards greener powertrain solution. FCA is currently working on its next six year plan and tying up with Hyundai could be a part of that.

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As part of its business strategy to 2022, FCA is trying to simplify its portfolio and it is working on separating two of its three component businesses. As FCA boss has said, spinning-off of component maker Magneti Marelli and robotics developer Comau are going to be separate operations.

As we have reported earlier, FCA has been trying to streamline its operations by spinning off the Magneti Marelli that manufactures lighting, engines, electronics, suspension and exhausts. However, the decision is yet to be finalised by the board of directors of FCA. Meanwhile, the possibility of technical partnership with Hyundai will surely boost FCA’s business, as in recent past FCA shares saw high price after it received offer of stake purchase from Chinese companies and Hyundai.

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FCA chief also said that spin off of the iconic cars brands like Alfa Romeo and Maserati are not going to happen for many years. As you remember, earlier this year rumors suggested the auto giant is trying to sell these two car brands in order to boost its finance and streamline its business.

We also reported that, Jaguar Land Rover showed interest in purchasing one of the two brands and the move was backed by JLR’s Indian parent group Tata Motors. However, now, with Marchionne’s announcement it is clear that FCA is not going to sell the brands.