DETROIT — Fiat boosted its ownership stake in Chrysler Group LLC yesterday as the Italian automaker met several benchmarks set by the US government.
Fiat’s stake in Chrysler rose from 25 percent to 30 percent, and it can rise to 35 percent when Chrysler begins making a 40 mile per gallon car in the United States.
Fiat got a 20 percent stake in Chrysler when it took over management of the company after a government-funded bankruptcy in 2009, and the government set several benchmarks for Fiat to increase its stake. In exchange for the ownership stake, Chrysler got small-car and clean-engine technology and Fiat’s management know-how.
Fiat’s share of the company rose to 25 percent in January when it met the first government benchmark by making a fuel-efficient four-cylinder engine at a factory in Dundee, Mich.
The stake granted yesterday came because Fiat boosted Chrysler’s sales outside North America, compensated Chrysler for Fiat’s use of its technology and recruited dealers in Europe and Brazil to sell Chrysler cars and trucks.
Plans for the 40 mile per gallon car already are in the works, and Sergio Marchionne, chief executive of both Fiat and Chrysler, hopes to increase Fiat’s stake to 35 percent by the end of this year. Marchionne said he eventually wants to raise Fiat’s ownership to 51 percent. It can buy another 16 percent once it has repaid loans from the US and Canadian governments. Marchionne has in the past said he expected that to happen in 2011, but on Monday said that could slip into next year depending on when Chrysler is able to repay the loans.
In addition to Fiat, Chrysler’s other owners include a United Auto Workers retiree health care trust fund at 59.2 percent, the US government at 8.6 percent, and the Canadian and Ontario governments at 2.2 percent.
Marchionne has said that Fiat wants to refinance its government loans before returning Chrysler to the public stock market.