Who'd have thunk it. Russia has become one of the hottest and fastest growing auto markets in the world. Now Chrysler wants a piece of the action and it may wind teaming up with a Russian automaker GAZ.
Today in Michigan, Chrysler executives and Michigan's governor are reportedly set to meet the president of GAZ to discuss the Russian automaker investing in the U.S. My view: It's a smart move and one Chrysler needs to make.
This is a company that is too dependant on North America. When I tell people Chrysler is a regional automaker playing in a global auto business, their response is often, "So what?" Well, it matters because Chrysler's future goes well beyond fixing its business in the U.S. And it's also a big reason Chrysler owner Cerberus Capital, bought the struggling automaker from Daimler earlier this year.
Only a fraction of Chrysler's business comes from overseas. The potential is enormous, especially in Russia, where auto sales are growing at 25 percent annually. How important has Eastern Europe become to the automakers? In GM's last quarterly earnings report, CEO Rick Wagoner told me that eastern Europe is "growing like China." It's one reason GM is making money in Europe and plans to aggressively push the Chevy brand to further grow that business. Ford is also profiting from the Russia boom.
Chrysler needs to tap that market as well, and to do so as quickly as possible. Thus, the meeting with GAZ. It will take Chrysler some time to get into Russia, but at least the company is moving fast to make it happen.
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