Marchionne Straddles the World, Shouting 'Jeeps for Everyone!'
The Jeep brand is Fiat-Chrysler’s biggest money maker, so it’s no wonder that CEO Sergio Marchionne is scattering factories around the world like a sailor’s offspring.
The company’s head honcho outlined his business plan for the brand in an interview published by Automotive News, and it involves no longer having to make a “Sophie’s Choice” decision with Jeep output.
Explosive Jeep sales, coupled with that of Ram, make up for the faltering Dodge and Chrysler brands and allow FCA to post a profit, despite trouble in its small vehicle lineup. However, global demand outstrips existing production capacity, meaning the Jeep-hungry American market gets its fill, while overseas markets get an empty plate.
Building Jeep factories in growing markets gives Marchionne a hedge against domestic uncertainty, and he’s just gotten started laying the bricks.
“One of the things that we’ve always faced in the United States in the production of Jeeps is to make this unfortunate Sophie’s Choice about whether we sell in the U.S. or sell overseas,” Marchionne said, adding. “Even if there were a contraction of the U.S. market, there is in our view unexplored potential in terms of [overseas] markets, especially where we have not established local production.”
The target markets for the Jeep brand are Europe, the Asia-Pacific region and Latin America. Smaller, fuel-efficient models like the Renegade and whatever replaces the Compass/Patriot twins seem tailor-made for those high-growth regions.
Last year, FCA added Jeep Cherokee manufacturing capacity in China and a Renegade production line in Brazil. This year, Renegade production comes to China, with the Compass/Patriot replacement slated for Mexico, China and Brazil.
The three years after that will see Renegade production come to India, and U.S. capacity grown to handle the Wagoneer, Grand Wagoneer, and Wrangler pickup. A sub-Renegade mini-SUV, based on a Fiat platform, might be in the works for the Indian, Indonesian and African markets.
Marchionne wants first-time overseas Jeep buyers to get hooked on the brand, and move up to bigger and more expensive Jeeps as they grow in age and affluence.
If Jeep volume grows the way he hopes, Marchionne won’t have to break a sweat finding someone to make Chrysler 200s and Dodge Darts for him.
[Image: FCA US LLC]
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FCA will not make it past Trump's first term. FCA has had 7 years to develop alternative propulsion (aka hybrid) cars and hasn't done squat. FCA has had 7 years to develop a decent 4 cylinder. FCA has had 7 years to develop a decent transmission. FCA has had 7 years to develop a decent midsizer, a decent compact, a subcompact. FCA's best vehicles are riding on the coat-tails of what is left from Daimler. Everything that turned around chrysler, that was good, came from pre-FCA plans and was developed under Cerberus: Pentastar, 300/Charger/Challenger second gens, viper come-back, new RAM, new JGC, new Durango. Chrysler under Cerberus had the new midsizer in active development, and instead was forced to use CUSW and horrible 9 speed transmissions. Chrysler Corp. could have been a contender. They won't be around in 2020.
I rented a compact car for a weekend trip to San Diego on Friday (I live in Los Angeles). After getting an atrocious Mitsubishi Lancer with all of 5500 miles that managed to couple stiff steering and floaty suspension replete with a seat that hurt my back and Bluetooth that wouldn't pair, I went back to Avis and they put me in a 2015 Cherokee Latitude with the 2.4. I liked the Trailhawk I test drove when the KL came out, but I wasn't expecting much from the Latitude. To make a long story short, while I don't miss the opportunity to poke Sergio and FCA for bad business decisions, the Cherokee had enough get up on the highway with five people inside, averaged 25 mpg, the 9HP was fine seeing how I actually know how to modulate throttle input and I didn't miss the handling of my Focus one bit. I wondered why Sergio couldn't build the rest of his lineup like that, then I realized where FCA plunked their money down. And yes, I am very tempted to pull the trigger on a slightly-used Cherokee ($15-$17k) of course with an extended warranty.