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Student name: ________________________________ Student ID _______________________ York University Faculty of Liberal Arts and Professional Studies School of Administrative Studies AP/ADMS 4250 Marketing Strategy, Fall 2013 Instructor: A. Rusetski, Ph.D.

EXAM 1: Case

AP/ADMS 4250 Marketing Strategy

Exam 1

Page 1 of 7

FIAT RETURNS TO CANADA1
A.RUSETSKI, PH.D

F IGURE 1: A 2011 FIAT 500

On March 18, 2011 two hundred strange looking tiny cars lined up on the streets around the Quebec Business Centre. FIAT, a major European car manufacturer, was celebrating its return to Canada after 28 years of absence. This comeback became possible thanks to a partnership with one of the Detroit Big Three car manufacturers – Chrysler. From Montreal, columns of FIAT 500 cars paraded to designated Chrysler dealerships where FIAT opened its “FIAT Studios”. A number of important and at times sad developments led to this celebratory moment. Once a powerful player in the North American market, in early 2000s Chrysler Corporation was struggling with declining demand and decreasing market share. In 1998 the company “merged” with German Daimler Benz to form DaimlerChrysler AG. In fact, the German automotive giant took ownership of Chrysler, but after nine years the new owner acknowledged that the “marriage” was not successful and it could not improve Chrysler’s financial performance. In 2007 Daimler sold the Chrysler for $7.4 billion to the investment group Cerberus Capital Management. If the inflow of German technology and management could not improve the situation at Chrysler, a group of investment bankers had even less chances to rescue the company, especially when global

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