Having declared six months ago that the economic crisis would leave the world with 5-6 global manufacturers, each with sales of at least 5.5 million cars a year, Fiat CEO Sergio Marchionne has taken action. Last week, we saw the first results of this activity: Fiat acquired 20% of the bankrupt American Chrysler (with the possibility of increasing the share to 51%) and entered into negotiations to buy General Motors' European business - Opel/Vauxhall and Saab. It seems that we are witnessing the birth of one of the largest companies in the global auto industry: if Marchionne also manages to agree on the purchase of GM's Latin American business (and the Americans, it seems, will not be able to save it), Fiat could become the second largest manufacturer in the world, overtaking Volkswagen Group.

In theory, the Fiat takeover looks great, the synergy effect should be multi-billion (Marchionne estimated the effect of the merger with Opel alone at 1 billion euros per year). Chrysler, Dodge and Jeep know how to build SUVs and pickups and have a developed dealer network in North America, having sold more than 1 million cars there last year. Fiat, Alfa Romeo and Lancia are not sold in the US at all, and the Italians do not know how to make SUVs. In Latin America, the situation is the exact opposite: in Brazil alone, Fiat sold 666,000 cars last year; all three Chrysler LLC brands did not even reach 10,000. So why not share skills and a dealer network?

Of course, there are more pitfalls in building a new super-alliance than we and even Marchionne himself can imagine. Jeep and Chrysler are generally damned brands for Europeans: neither Renault nor Daimler-Benz could cope with them. (But Renault was a state-owned company at the time, and Daimler-Benz worked in the luxury segment and was unable to integrate the “mass” Chrysler.) Martin Winterkorn, CEO of the Volkswagen Group (which unites eight brands), has already said that he doubts Marchionne’s success, because managing so many brands is a very difficult task.

Complex, but not impossible: Marchionne was able to complete the restructuring, separate his three brands – Fiat, Alfa Romeo, Lancia – and get a net profit of 1.7 billion euros last year. So why not do it with eight brands, especially since the Volkswagen Group can do it.

Company of the week: Fiat