Are investors with Indian aspirations circling Chrysler?

Speculation is mounting over a potential Asian partner for the Chrysler Group.

The Group has already reportedly been looking to take advantage of the cost-effective manufacturing of automotive parts in India and China. It has been indicated that the moving of some of Chrysler Groups manufacturing operations to Asia could be the trump card the private equity firms looking to invest could play at any point.

The American automotive market has been having a comparatively tough time of it lately. First Ford was forced to sell off Aston Martin, and now Chrysler is struggling to recover from a $1.5-billion loss in 2006. A strategic outsourcing plan to Asia could provide a lifeline for America’s ailing automotive sector, and some low-cost cars are already finding their way in to the US from India. Driven by outside investment, and not from within Chrysler itself, also makes it an easier decision for a fiercely patriotic brand.

As IndusView reported in September 2006, India is on track to become the world’s third biggest car manufacturer by 2030. So it’s unsurprising that a group like Chrysler might want to improve its revenues by harnessing Asian manufacturing power.

A partnership between American business and Indian manufacture would, of course, be mutually beneficial. For American automotives, Indian manufacturing would be cost-effective, enhancing competitiveness in a market that’s going through changes. From India’s perspective, the more high-profile Western companies invest in Indian manufacture and technology, the more the country’s economy will benefit.

Perhaps the much-hyped article from The Globalist on Tata’s $1 acquisition of Chrysler might not be closer to the mark all…