Magneti Marelli eyes big opportunities in the U.S.

Dec. 1, 2010

Magneti Marelli SpA, one of Europe’s largest auto parts suppliers with 4.5 billion euros in annual sales, is poised to grab more business in the United States, says company CEO Dino Maggioni in this exclusive interview with

The Milan, Italy-based company, which has operations in 18 countries, including the U.S., recently became a supplier to Chrysler dealerships, specifically via the auto manufacturer’s Mopar brand.

Magneti is owned by Fiat SpA, which established a strategic alliance with Chrysler in early 2009. (Fiat is bringing its Fiat 500 compact car back to the U.S. next year.)

In this interview, Maggioni discusses what sort of products it will supply to Fiat in the U.S., whether Magneti has plans to pursue the American independent tire dealer market, and more. (In Europe, the company supplies Goodyear Tire & Rubber Co.’s Super Service network.)

MTD: What opportunities do you see for Magneti in the U.S. due to the Chrysler-Fiat alliance?

Maggioni: Magneti is looking at OE opportunities with high priority because of the deal with Chrysler-Mopar and also to deliver to other U.S. carmakers. We are glad the U.S. automotive sector is improving. In the aftermarket, we are already working with the Fiat Group.

MTD: What sort of products will you be supplying to Fiat in the U.S.?

Maggioni: At the OE level, powertrain components, lighting, plastic components, exhaust systems, shock absorbers, suspension systems and electronic systems. We have research and development centers and plants all over the world. In the aftermarket, I want to be clear that Fiat is only one of our customers. Forty-percent to 45% of our turnover is with Fiat, but the remaining portion is made by orders coming from Volkswagen, Japanese companies like Suzuki, and all of the major Chinese carmakers.

In North America, we are working with Chrysler, which has 2,400 dealers. We are developing projects in order to complete the range of products (these) dealers can offer, not just for Chrysler-Mopar vehicles but for vehicles by other carmakers, and also a value line.

Magneti Marelli is a brand that is known to the U.S. market but is not over-exploited. The brand is there, the product range is there, and the distribution channel is now there.

MTD: Will you be providing parts to Chrysler dealers on a fill-in basis or will you offer alternate products for the same applications?

Maggioni: I think it isn’t correct to say we’re filling holes. We are giving more opportunities to dealers. We’re giving them an opportunity to position another product that is still good but at a different price level. The advantage for the dealer would be more flexibility and the ability to attract more customers.

If you want to develop a value line, it also gives you the opportunity to have more pricing flexibility because Mopar cannot be stretched downward in terms of pricing. What’s important is that Magneti Marelli is more than a brand. Behind that brand is a very solid company that was founded in 1919.

MTD: How soon will Chrysler dealerships start offering your products?

Maggioni: Early 2011. We see big opportunities there.

MTD: What are your other plans for the U.S. market?

Maggioni: Our two priorities are to increase our industrial footprint and expand in the aftermarket. We don’t want to over-extend and expend energies in other directions. The fit with (Chrysler) is there, and the contact we’ve already had with dealers gives us a good footing in terms of brand recognition. The dealers we’ve spoken with are very excited to have an additional line.

MTD: Do you have an interest in serving the independent tire dealer market in the U.S.?

Maggioni: In Italy, we have the Super Service agreement with Goodyear. When you change tires, you have the opportunity to place your hands on brake pads, shock absorbers and other things. You also need diagnostic tools to check the basic electronic systems in the car. We provide diagnostic tools to some networks in Europe, and also spare parts… to allow the tire dealer to make some basic maintenance sales, and to do it the right way.

Magneti Marelli also provides training and customer support call centers in Europe. “I think it’s something we might be able to transfer to the U.S., but only as a second step because Chrysler-Mopar is our priority.”