Fiat Chrysler CEO Sergio Marchionne hasn't discouraged speculation in industry trade publications that FCA is for sale, possibly to a Chinese partner. By joining the BMW alliance, the company is demonstrating that it's not falling behind in the global race to create highly autonomous cars (and eventually, self-driving ones).
FCA, which has a weaker balance sheet than rivals like General Motors Co. (GM) and Toyota Motor Corp. (TM) , has so far been slow to invest in leading-edge automotive technologies such battery-powered-vehicles and self-driving cars. While the company did agree in 2015 to build minivans for Alphabet Inc.'s (GOOG) Waymo self-driving project, that pact fell short of a broad alliance.
- Facebook, Google and Others Face Dilemma Policing Hate Speech
- Trump Seeks to Turn Bombast into Action as NAFTA Negotiations Start
Nonetheless, Automotive News reported over the weekend that more than one Chinese automaker is considering bidding for Fiat Chrysler, which makes the Jeep, Ram, Chrysler and Dodge brands. Chinese automakers are looking for ways to penetrate United States, which is the world's most profitable market car market and second only to China in size.
"Marchionne continues to position FCA as a compelling player in a competitive industry," said Karl Brauer, executive publisher of Kelley Blue Book, AutoTrader.com and Dealer.com. "In the past 48 hours, we're heard rumors of Chinese interest in buying the automaker, and now we know FCA is actively working with major tech players like Intel and Mobileye to develop self-driving capabilities."
Intel last month closed a $15 billion purchase of Mobileye, an Israeli self-driving venture, and INTC is moving its advanced-driving research center to Israel.
Brauer said that Fiat Chrysler "may not be as big or well-funded as GM, Toyota or Volkswagen (VLKAY) , but Marchionne is giving the company a viable stake in the autonomous-vehicle race, which further elevates FCA's desirability among potential partners or suitors."
Fiat Chrysler will provide the BMW/Intel alliance (which also includes global suppliers Delphi Automotive PLC (DLPH) and Continental AG (CTTAY) ) with a greater scale, and could help defray some of the massive development costs involving in building self-driving cars' artificial-intelligence and sensing software.
"Joining this cooperation will enable FCA to directly benefit from the synergies and economies of scale that are possible when companies come together with a common vision and objective," Marchionne said Wednesday.
Fiat Chrysler shares were up some 0.5% at $12.74 in late-morning New York Stock Exchange trading after rising some 4% earlier in Europe.
More of What's Trending on TheStreet:
- 10 Mind-Blowing Things That Amazon Might Do to Whole Foods
- The 30 Nastiest Storms in Recent U.S. History Have Caused Mind-Blowing Damage
- Jim Cramer -- Why Are You Shocked That Amazon Is Lowering Prices at Whole Foods?
- Here's the Dreaded Black Swan That Might Come Out of Nowhere and Roil Stocks
Editors' pick: Originally published Aug. 16.