Hyundai could oust Volkswagen as the world's biggest car maker in one fell swoop.
The South Korean brand is the latest car maker linked to a takeover of Fiat Chrysler Automobiles after failed attempts with VW, General Motors and China's Great Wall Motors.
Now, according to a report from Asia News, Hyundai Motor Group CEO Chung Mong-Koo is watching FCA’s share price ticker with an expected downturn in value to trigger a bid within 12 months. The ageing South Korean CEO is keen to make the move by May 2019, when FCA holds its annual shareholders meeting and current CEO Sergio Marchionne will retire.
Spurring a decline in FCA’s share price is pressure on overcapacity and a big future bill on research and development costs for electric and alternate vehicle energies that the group currently lacks. Marchionne has previously stated he sees the future as merging with other automakers to reduce investment costs.
FCA chairman and major shareholder John Elkann, on the other hand, has not shown much interest in the automaker, instead concentrating on news and media outlets, while Marchionne remains keen to ensure a new partner before his departure next year.
Major Hyundai shareholder Elliot Management also recently promoted FCA Europe CEO Alfredo Altavilla to the board of Telecom Italia, strengthening relationships between key players in the background.
Despite previous talks of a tie-up with Hyundai last year that was dismissed by both parties as being a potential technical partnership, Hyundai said the latest gossip is unfounded.
“That rumour is totally groundless,” senior group manager of Hyundai corporate and marketing PR Michael Stewart told the US’ Cnet.
However, the takeover would benefit both automakers, making the new group the world’s largest automaker producing over 11 million cars per year and provide FCA with a foothold in the growing Asian market, as well as electric vehicle and hydrogen fuel cell technology.
A current free trade agreement between the US and South Korea would also help facilitate the merger and lower import/export costs compared to higher tariffs on European models.