DETROIT -- Chrysler LLC and Fiat S.p.A. have little in the way of engine and transmission technology that can be transplanted into each others vehicles, analysts say -- at least not right away.
Still, the two companies, which announced an alliance today, are seen as destined to share components and technologies someday. But right now, the automakers powertrains and technologies reflect where most of their volume comes from.
Under the proposed alliance, Fiat would have a 35 percent stake in its U.S. partner this year and could eventually control a 55 percent stake.
Because of the Dodge Ram pickup and Jeep SUVs, Chrysler relies mostly on beefy Hemi V-8 engines and large-displacement V-6s to power its high-volume vehicles. That dependence cost Chrysler in 2008 as U.S. gasoline prices soared to record highs, triggering a 30 percent sales decline for the year -- the industrys steepest.
In Europe, where gasoline is about $7 a gallon, Fiat uses powertrains such as small turbocharged gasoline and diesel engines that are more suited to that continents driving conditions.
Fiat also has invested in technologies that save fuel and reduce emissions. One such technology is the dual-clutch transmission, which retains the fuel economy of a manual transmission while providing the convenience of an automatic.
Another is the stop-start system, which automatically turns off the engine when the vehicle stops and quickly restarts it when the driver is ready to accelerate.
Because of those investments, Fiat likely would not use Chryslers front-wheel-drive, Two Mode hybrid technology.
For now, Fiat probably would shun Chryslers pushrod Hemi V-8s, said Andrew Close, senior technical research analyst at Global Insight in London. Fiat likely would turn to its Maserati unit for a lightweight, more technologically sophisticated overhead-cam V-8 for Alfa Romeo sports cars and sedans, Close said.
Chrysler couldnt profitably transplant Fiats new generation of four-cylinder diesel engines into its small vehicles because of high European production costs and the expense of getting the engines to meet stricter U.S. emissions standards, said Jim Hall, an analyst with 2953 Analytics in suburban Detroit.
Chrysler also couldnt profitably import two small four-cylinder gasoline engines -- a 1.4-liter and a 1.8-liter -- because of the high production costs stemming from building the engines in Europe.
But Hall said Chrysler could use its excess manufacturing capacity in the United States and Mexico to build those Fiat-designed engines for Chrysler vehicles and for Fiat and Alfa models, reducing costs for both automakers.
The price is beneficial, and it would be a good deal for Fiat, Hall said. He estimated that Chrysler could be building Fiat engines by mid-2011.
Hall said Chrysler also could use Fiat platforms as a base for new vehicles.
Chrysler could get new V-6
Close of Global Insight said he sees some eventual technology-sharing between the two companies. And a new V-6 being developed by Fiat could find its way into Chrysler vehicles, giving Fiat lower costs from greater volume.
Close said Fiat is working on a new diesel emissions system that could comply with regulations in 50 states and eliminate expensive filters and traps in the exhaust system. That technology, along with the stop-start system and dual-clutch transmission, someday might end up in Chryslers vehicles.
Close said the main benefit of the alliance is that it gives Fiat a quick entry back into the United States.
Said Close: They could send Alfa Romeos to the U.S. quite soon; 2010 or 2011 is realistic now that they have a place to sell them.
Hall sees the Fiat-Chrysler deal as a way for the Italian company to compete with Volkswagen, BMW, Mercedes and the other European automakers that build vehicles in the United States.
Said Hall: This is about building cars that Fiat can build and sell on this continent.