Update: Chrysler has apparently moved its IPO to 2014, its largest shareholder Fiat said:

“The Board of Directors of Chrysler Group LLC…has determined that it will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013…………

According to The Wall Street Journal, a Chrysler IPO might have happened in just a few weeks. The car company could raise $2 billion, which would set a total value of about $10 billion. At issue–whether Chrysler really has a value that high? Almost certainly not

A voluntary employee beneficiary association–an offshoot of the UAW–wants to have some of its shares become liquid.  And IPO would give it the chance to get that liquidity. The majority of the company–at 58.5% is Fiat. Outside experts believe that the value of the shares bought to market will not match the value the voluntary employee beneficiary association expects.

No matter who or what entity ends up with publicly traded shares in Chrysler, a market cap–anticipated at $10 billion–cannot be justified. Chrysler has almost no business in the two large geographic markets outside the U.S.–the EU and China. Chrysler may count itself lucky to have nearly no part of the European market as its crumbles. As the EU eventually recovers, that status could lose its attraction. While Ford (NYSE: F) and GM (NYSE: F) bleed red in Europe, each has stayed for a reason. The EU market cannot fall forever. If the two U.S. firms cut costs enough, Europe will become like the U.S. after the recession–a market which had tremendous promise.

Chrysler had the hot hand based on U.S. sales for two years. However that status changed this year. Its sales improvement rate currently only matches the overall industry’s–up 8.7% against the total for all car manufacturers which have risen by 8.4%. Through October, Chrysler’s market share remains the same as last year–11.5%.

Chrysler’s market share could remain trapped below those of Ford and Toyota (NYSE: TM), at 16.6% and 14.4% respectively.  Ford’s sales have grown faster than Chrysler’s have this year. Chrysler’s model line at its flagship brand has only three offerings–the 200, 300, and Town & Country. The line-up cannot challenge rivals which have much bigger lists of models.

Chrysler majority owner–Fiat– remains ambivalent about an IPO. The primary reason–Chrysler cannot compete for long in the U.S. and not at all overseas.

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