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| Clermont Meridian Trading Reviews Chrysler IPO |
After months of negotiating for a means to acquire the 41% of Chrysler that Fiat does not already own, CEO Sergio Marchionne is hopeful that an IPO could speed up the process. According to Clermont Meridian Trading research, Chrysler and the UAW VEBA Trust filed papers late Monday for an initial public offering to sell a tiny share of the company to the public.
The public's attention will be drawn to how far Chrysler has progressed since its bankruptcy four years ago. This is unquestionably a different firm, and it's thriving, growing, and has a clear idea of what it wants to accomplish in the following years.
Clermont Meridian Trading’s Head of Corporate Derivatives, Andrew Wakefield, declared, "Sergio Marchionne has stated multiple times that Chrysler is no longer a place where employees are afraid of losing their jobs. Today, Chrysler is on the move. This IPO illustrates some of Chrysler's shortcomings and strengths, which investors should bear in mind if they plan to acquire Chrysler shares in the future."
Chrysler has long been the only one of the Big Three automakers that have failed to invest and grow sales globally. While Sergio Marchionne and his team are aiming for more international expansion, particularly in China, this corporation depends on the United States and Canada for 86% of its overall revenues. Fortunately, the U.S. market has been scorching hot for the past three years, with the strongest demand for new vehicles coming from trucks and SUVs, two sorts of vehicles that Chrysler excels at.
Meanwhile, in both Europe and China, Chrysler is severely lacking in both products and production. China is a particularly vulnerable country. Marchionne intends to extend the Jeep brand in China, but progress has been gradual. In reality, it will take three to four years for China to become a viable growth market for Chrysler. Jeep will be in a great position to take off in that market when that happens.
When you ask executives at GM, Ford, or any other carmaker which part of Chrysler they want, almost everyone will say the Jeep brand. It is a sleeping giant, according to Clermont Meridian Trading analysts. “Jeep's global sales more than doubled last year, with North America accounting for the majority of the increase. Jeep has a small presence in the rest of the world, but its brand is well-known,” added Andrew Wakefield of Clermont Meridian Trading.
Fiat wants to buy Chrysler in order to benefit from the American automaker's free cash flow. Fiat requires cash from Chrysler in order to expand further. The European manufacturer is still battling a sluggish European market and excess capacity on the continent. In 2013, the global auto game was all about being balanced all around the globe. Fiat's current market share is highly skewed toward Europe, with a substantial presence in Latin America and little in Asia. Fiat wants and needs to shore up its weak position in Asia at some point. If it owned all of Chrysler, it would be a lot easier.