Automotive paradigm shift? The partnership completes a mission to Europe.

The September European Mission focused on the Frankfurt Auto Show and developments in Turin, Italy, with FIAT and its suppliers. Both venues sent noticeable signals that there is a paradigm shift occurring in the auto industry with important implications for the American auto industry.

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FIAT is clearly taking aggressive steps to firmly establish a footprint in the North American auto market. Unlike previous new entrants to this market, FIAT will be assembling its brand vehicles in North America within the first year of entering the market. Its first market entrant, the Cinque Cento, or 500, which has been well-received in Europe, will most likely receive a minor facelift for the North American market. It is expected to be assembled in Mexico. However, Fiat's real impact will come from working with Chrysler LLC to jointly develop new vehicles that will be ready Reproduction in about 12-14 months, a potentially game-changing process. This process will require an unprecedented OEM-supplier working relationship, from design and development to production. Industry representatives, including suppliers, believe that, although it will be difficult, it can be done.

The Partnership met with several Fiat suppliers and Italian auto industry groups to present its North American Navigation System (NAVS) as an important solution for their North American market entry. The NAVS is a holistic and highly integrated service, delivered with our partners, to help companies make informed market entry and expansion decisions on the North American market. The service goes further and helps these companies implement these decisions in the shortest time and with the lowest investment.

The mission then visited the IAA Frankfurt Auto Show, where 82 new world premieres were launched in front of over 850,000 visitors over a two-week period. Green vehicles were the major theme at this year's auto show, presenting new technologies largely developed by smaller new entrants.

These small new auto companies are presenting a paradigm shift in developing and producing electric and hybrid vehicles faster than the traditional OEMs. Fisker Automotive, Inc., a green premium sports car company headquartered in Irvine, California, featured the Karma plug-in hybrid vehicle for the first time in Europe. Fisker received a loan from the U.S. Department of Energy to develop the next generation affordable plug-in hybrid vehicles, which it expects to export globally. Another new entrant, Tesla Motors, an electric vehicle manufacturer based in San Carlos, California, featured two electric vehicles: the Roadster Sport and the Model S. Tesla is forming a partnership with Daimler AG, the German luxury car company. Other small new entrants included Roding Automobile GmbH, an auto company based in Roding, Germany. Roding introduced its soon to be launched roadster. The unique features of this vehicle include its carbon fiber light body that is currently applied in the aerospace industry. Given that the motor is located at the rear of the vehicle, giving it 60-40 back-to-front weight distribution, the company had to develop a new chassis for vehicle support and handling.

Comments from auto suppliers in Italy and Germany

European auto suppliers were cautiously optimistic about the industry's short-term global outlook, following recent new orders from their customers. Their main question is whether these orders are the result of successful "cash-for-clunkers" programs that European countries launched, prior to a similar program in the U.S., and are mainly to resupply lost inventory, or whether they are part of a longer-term trend toward increased production. They expect to know more in the first quarter of 2010.

Dean R. Johnson is senior director of global business development for the Detroit: Regional Chamber.