FCA

Fab Five

1. UAW Strike Labors On – The UAW, itself embroiled in scandal, went ahead and launched a protracted strike against GM. Originally expected to end within a few days, the strike lasted longer than a month, causing the longest shutdown in the past half-century. GM lost billions of dollars during the strike, agreeing to keep one plant open and save some jobs. We think the labor victory will ultimately prove shallow as it’ll force GM to find additional ways to save money long term, with job loss gradually increasing.

2. Carlos Ghosn Debacle – Is he guilty or not? Former Nissan CEO Carlos Ghosn was jailed in November 2018 for a variety of charges, including fraud. What was shocking wasn’t so much the alleged scandal, but how the Japanese justice system treated the former executive. Ghosn was isolated, often without legal representation, and the charges against him seemed stacked. On the next to the last day of the year, Ghosn flew to Lebanon where he most likely will stay and avoid a return to Japan. The story isn’t over yet nor are the many twists and turns that defined this relationship.

3. FCA-PSA Merger – One year after its Sergio Marchionne died, Fiat Chrysler Automobiles has fulfilled one of the CEO’s important goals: a full merger with another automaker. FCA, the product of a big merger earlier this decade, is set to join forces with France’s PSA Groupe to form the world’s fourth-largest automaker. The deal should conclude by late 2020, but we may not know for a few more years the status of various brands (including the eponymous Chrysler) and certain models (the Dodge Challenger and Charger, for example).

4. Introducing An All-New Corvette – We won’t see a new Corvette for a few months, as production was delayed due to the strike as mentioned in our first story. What’s significant about the Corvette is that GM will finally transition its sports car to a mid-engine layout. As a result, even the base Stringray will immediately become the fastest Corvette ever. Also of note is the base price, as that will come in at under $60,000. Soon after the new model arrives, we should hear about follow-up versions with more powerful engines and the lofty price tags to go with it.

5. Ford Adds an Electric Mustang – Ford’s Mustang is America’s pony car, but it will soon be joined by an all-electric SUV. The Ford Mustang Mach-E is its name, an all-new model built on a separate platform, but sporting the iconic model’s name. With many Mustang styling cues, the EV gives a connection to the coupe, but the resemblance ends there. We dislike Ford’s decision and have followed the anger of Mustang faithful, including some who feel deeply betrayed. There’s still time for Ford to change the name, but we doubt it will.

Honorable Mention

Among the other stories of note for 2019 include Nissan’s drop in market share, the Tesla Cybertruck debut, the expanding financial backing for upstart Rivian Automotive, the electric truck/utility vehicle maker, and the ongoing shift away from cars to crossovers and trucks.

Stories about driverless cars and full electrification dominated; we’re also on the cusp of seeing the first Chinese automotive brand arrive stateside.

Possible Scenarios

Looking ahead, we expect many of the current stories to play out, with perhaps a few twists along the way. Auto Trends expects another blockbuster merger announcement in 2020 with perhaps Volkswagen and Ford tying the knot. A suitor for GM seems possible, but will Hyundai/Kia make the bold move to acquire or will it allow a Chinese company to jump in first? Finally, we’ll continue to see more car models die, but a few will hang on and likely thrive in a smaller market.

Image by Gerd Altmann from Pixabay

Fiat Chrysler Peugeot: Now What?

December 19, 2019 by admin Leave a Comment

Chairman of the Managing Board of Groupe PSA Carlos Tavares and FCA CEO Mike Manley share a congratulatory handshake after concluding the merger agreement between their two companies.

Save for regulatory scrutiny, antitrust review, and shareholder approval, Fiat Chrysler and the PSA Groupe are set to merge. The two automakers agreed on a framework for merging the two companies, which will create the world’s fourth-largest automaker after the Volkswagen Group, Toyota Motors, and the Renault-Nissan-Mitsubishi Alliance.
We’re still about a year away from the merger’s completion. In the meantime, we’ll be waiting for word on the new name for the entity. I like “Global Motors” but I think GM would object.

Capacity, Electrification, & Autonomous Vehicles

No matter what happens over the coming months, a lot of what you’ll be hearing will be speculative especially as the companies have been relatively mum on where things are going. We do know no plants will be closed or jobs lost, but with a build capacity of 14 million units and current annual sales of 8.7 million units, there is ample room for consolidation. And it is doubtful we’ll see a significant increase in sales to narrow that gap, although Jeep and Ram may fuel much of the growth moving forward.

But there are certain trends such as electrification and autonomy that will impact the newly minted automaker. Like it or not, the industry is going through an upheaval, but I will say that full electrification isn’t likely to happen in the short term, if ever. Instead, we’re likely to see some sort of “hybrid” system based largely on hybrid electric vehicles. As for autonomy, large cities are the likely place to roll out the technology, but getting it to the masses will take many years and require an enormous amount of capital.

From the left side of the Atlantic, there are a few things we’re all wondering about and are certain to become the topic discussed at your favorite cars and coffee or other automotive meetups in the coming months. Here’s a sample of key questions we believe are foremost on Mopar fan minds.

Which brands will die?

The current FCA stable includes Fiat, Chrysler, Alfa Romeo, Dodge, Lancia, Jeep, Maserati, Abarth, and Ram. That’s nine brands to manage and will soon climb to 14 with the Peugeot, Citroën, DS, Opel, and Vauxhall brands. It isn’t inconceivable that an automaker would manage so many brands – the Volkswagen Group is comprised of 12 brands. Even so, we could see a few brands dismissed. Dodge and Chrysler are most vulnerable and Vauxhall could simply be folded into Opel.

End of muscle cars?

FCA has done quite well with its muscle car lineup, with the Dodge Challenger firmly in second place behind the Ford Mustang and ahead of the Chevrolet Camaro. Having the four-door Dodge Charger to complement the sport coupe has always been a plus. Yet, these two models are aged and may not have enough life in them to continue for many more years. One way the models survive is if PSA has a platform to support them. That’s not known, although the new company could tap the Alfa Romeo Giulia/Stelvio’s platform for them.

When will Peugeot begin selling its cars here?

Long absent from the US market, Peugeot has fixed its eyes on returning by 2026. These plans were put in place in 2018, with the company establishing new US headquarters in Atlanta. That timeline was moved up by a few years earlier this year, even before the announced merger. No matter what happens going forward (merger or no merger), Peugeot plans to make its return, according to Car and Driver. Likely, they’ll import models built in Europe, foregoing US manufacturing, at least initially. That’s a sensible approach as FCA capacity is nearly full stateside, while European plants for both FCA and PSA are underutilized.

What’s the role of Opel going forward?

GM owned Opel (and Vauxhall) from 1929 to 2017, before selling the brands to PSA. Since then, Buick has continued selling several Opel products under its name including the now-discontinued Cascada convertible and the Regal sedan/hatchback/wagon. That agreement is coming to an end and soon Buick will sell crossovers only. That could leave the door open for Opel to arrive stateside on its own, but we doubt that’ll happen, at least not before Peugeot.

Getting it Done

No doubt, the FCA-PSA deal will get done. There are some issues to settle, including GM’s suit against FCA alleging racketeering over labor negotiations (which allegedly favored FCA at the expense of GM). Some are arguing the suit is GM’s attempt to thwart the merger and nothing else. Regardless, the matter should be settled before the merger is finalized.

With FCA and PSA united, expect other automakers to explore ways to combine synergies through alliances, acquisitions, and mergers. My personal “favorite” alliance is VW-Ford, as the two automakers are currently collaborating on self-driving cars and electric vehicles. That may leave GM as the last “American” automaker standing, besides Tesla, Rivian, Bollinger, and a few other upstarts.

Photo copyright Fiat Chrysler Automobiles.

Up Next: Ford-Volkswagen Tie-up?

October 31, 2019 by admin 4 Comments

What a week it has been. More like a half-week, actually.

For it was within that abbreviated timeframe we officially heard that Fiat Chrysler and the PSA Groupe (Peugeot and Citroën) were talking merger. The news spilled out late Monday and by Wednesday the two automakers came to terms. Today, news of the planned merger was announced, setting in place what will become a near $50 billion entity, which currently produces 8.7 passenger vehicles annually.

Merger talk doesn’t take place in a vacuum. Indeed, soon after the FCA broke off talks with Renault to merge in June, rumors of PSA’s interest in FCA came out. All we’ve heard is what was reported this week. But talks have been going on for some time, carried under the cloak of secrecy.

We shouldn’t be surprised that the two automakers are connecting as the entire industry is ripe of consolidation. With the deal nearly certain to pass, it likely will trigger further consolidation with perhaps Ford and Volkswagen following. Yes, these two automakers seem like prime candidates for an alliance or outright merger. There are several reasons why, which we’ll explore here.

Volkswagen and Ford: The Next Tie-up?

1. The two companies forged a global alliance.

In January 2019, Ford and Volkswagen announced that the two companies were forging a global alliance, but without cross-ownership. Pickup trucks and commercial vans were the first vehicles mentioned where collaboration will take place.

2. An EV/AV alliance follows.

In July, Ford and Volkswagen announced that the two automakers would begin sharing electric vehicle (EV) and autonomous vehicle (AV) technology. VW is investing in Argo AI, which is Ford’s self-driving technology, while Ford will build at least one vehicle based on Volkswagen’s Modular Electric Toolkit (MEB) architecture for sale in Europe.

3. Ford cuts back on cars.

The Ford Motor Company still produces cars, but the U.S. market will soon offer only the Mustang, pickup trucks, and lots of utility vehicles. With a VW tie-up, Ford might find it affordable and sensible to sell small cars again in the U.S., especially as the merged entity shaves costs. In any case, if the market suddenly shifts to cars again, Ford will have the platforms in place to build what’s needed.

4. The Rivian factor.

We already know that Ford owns a slice of Rivian, the upstart electric vehicle maker. Rivian will begin producing an SUV and pickup truck by the end of 2020. Ford will have access to Rivian’s skateboard electric vehicle architecture, which is certain to produce at least one model for the Ford brand. Volkswagen wants a pickup too and might utilize Rivian besides tapping the Ford Ranger for its own purpose.

5. Big is better.

When it comes to building passenger vehicles, the bigger you are, the better. Or at least that is the thinking in this industry. Yes, “economies of scale” and “synergies” are realized through smart collaboration. But there is another factor, bragging rights, which the new company led by Volkswagen would claim as sales would top an estimated 14 million units annually, putting the new automaker well in front of the pack.

What About GM?

With FCA and PSA hooking up and Ford and Volkswagen presenting a strong argument for consolidation, what about GM? At one time we might have seen GM go it alone or acquire another automaker, but that’s not going to happen.

Fresh on the heels of a costly labor agreement with the UAW, GM is ripe for the picking. We don’t see Toyota or Hyundai/Kia interested nor is it likely Honda with its independent streak planning to do likewise. There’s a chance GM might find a place in the Renault-Nissan alliance, but we think a Chinese suitor is just as likely.

In any case, the industry is changing and most likely will see additional mergers, acquisitions, and alliances in the months ahead. FCA and PSA triggered the tsunami. Now we’ll witness how other automakers avoid getting consumed by the waves of change.

Deal Undone:
Fiat Chrysler Renault Merger

June 7, 2019 by admin 2 Comments

It was a merger of equals, bringing together automakers with a strong presence in Europe and the Americas. The deal seemed to emerge from nowhere and just as quickly it died. Whatever thoughts you had about a Fiat Chrysler Renault tie-up, it isn’t going to happen. At least not in the near future.

Fiat suddenly pulled out of the deal on Wednesday, reportedly weary of the delays it ultimately pinned on the French government. Renault itself was onboard — but the company is also partially owned by the French, thus government involvement was and is an important consideration in the manner the automaker is operated.

Ghosn is Gone

Apparently, the French were waiting on Nissan’s feedback, a company allied with Renault. Although not directly involved in the merger, Nissan would have a significant say in how the alliance would continue after the merger. At first, the Japanese automaker seemed indifferent to the merger, but the French were concerned that the alliance might unravel later. Further, where Carlos Ghosn once held Renault, Nissan, and Mitsubishi together, his leadership is no longer a factor. In fact, Ghosn is in legal trouble with Nissan and that dilemma extends to the Japanese government itself.

Oh, what a tangled web we weave! (When first we practise to deceive!)

Although deception isn’t listed as one of the reasons for the failed merger (with apologies to Sir Walter Scott), a lack of trust certainly was. Indeed, the post-mortem showed much weariness on Fiat’s part in getting the French government’s approval, which again, was based on Nissan’s backing. An initial delay turned into a second delay, which soon morphed into a postponement of at least five days. That last setback was too much, so FCA officially canceled the deal.

Bigland Whistleblower Lawsuit

While all this was happening, another story emerged that might have helped scuttle the deal. On Wednesday, FCA’s head of Ram truck sales, Reid Bigland, filed a whistleblower lawsuit against his employer. This stunning development comes as the federal government continues to review the automaker’s sales figures.

In particular, the SEC noted that the company reported inflated sales, which could have an impact on investors. In his lawsuit, Bigland charged that FCA pinned the blame on him and withheld most of his compensation in 2018, in part to cover fines it attributes to the executive. The executive is seeking to clear his name and regain lost compensation, reportedly in the millions of dollars.

Bigland is also the only FCA executive to sell all his shares in the automaker. That said, CEO Mike Manley sold $3.5 million in company shares immediately after the FCA-Renault merger was announced. Exactly what the sales figures and share selling have to do with the aborted merger isn’t known, although it adds an interesting wrinkle to the story.

FCA: Moving Forward

With the failed merger now in its rearview mirror, FCA will have to address the Bigland suit and settle with the federal government. It is never a good thing when a top executive files suit, especially one from one someone so influential. Bigland is also the CEO of FCA Canada.

Besides the Bigland suit, the company must continue its focus on two core brands: Jeep and Ram. Jeep has become the company’s star player, driving sales and profits to bolster the company. The automaker plans to build a new manufacturing plant in Detroit, where it will produce a pair of full-size and upscale Jeep models.

The Ram brand is also thriving and delivers its own share of the profits. The redesigned Ram 1500 recently nudged the Chevrolet Silverado out of second place among full-size pickup trucks and continues to garner a larger slice of the sales pie.

Finally, FCA will have to plan a future without another automaker, at least not with Renault. Had it merged with Renault, it would have gained access to the French brand’s electric vehicle platform, saving the company billions of dollars. As it now stands, FCA will bear that cost alone along with the added expense of developing autonomous vehicles in-house.

Fiat Chrysler Renault Merger Talk Heightens

May 28, 2019 by admin 5 Comments

A blockbuster merger of automotive manufacturers may produce the world’s largest automaker, especially if two outside automakers are also brought in. Fiat Chrysler, itself the result of a 2014 merger between European and North American manufacturers may soon tie in with Renault, the French automaker.

Renault is currently reviewing an offer from Fiat Chrysler to merge the two companies with each taking a 50 percent stake in the other. FCA produced 4.8 million vehicles last year to Renault’s 3.9 million, for a combined 8.7 million units. However, Renault is worth 10 percent more than FCA, which means the latter will supply more cash to even the transaction. Renault is worth more in part because of its investment in an alliance with Nissan and Mitsubishi.

Marchionne, the Capital Junkie

A Fiat Chrysler merger with another automaker is something the late Sergio Marchionne insisted must happen to ensure FCA’s long-term survival. The former CEO and Chairman of FCA died unexpectedly last year, never seeing his dream fulfilled. However, it was Marchionne who outlined in his seminal 2015 report, “Confessions of a Capital Junkie,” industry consolidation.

Specifically, Marchionne explained that consolidation is the key to remedying the destruction of capital. In particular, he noted that both regulatory- and consumer-driven improvements such as tighter emissions controls, new powertrains, safety upgrades, infotainment services, and the push to autonomous drive, are expenses difficult for manufacturers to bear, especially those with a lower sales threshold. Further, Marchionne indicated manufacturers would need to sell at least 6 million vehicles annually to remain profitable, something they could accomplish through either a merger, acquisition or by means of a partnership, such as an alliance.

With a combined 8.7 million annual units (assuming the combined entity could maintain its momentum), Fiat Chrysler Renault would easily pass Marchionne’s threshold. However, it’ll take years for real cost savings to kick in as the new entity gradually merges platforms, shares powertrains, and utilizes technologies across the affected brands.

Jeep is the big prize FCA brings to a Renault merger.

FCA and Renault Brands

For FCA, the automaker brings with it several brands, including Jeep, Ram, Chrysler, and Dodge, serving North America primarily. Fiat, Alfa Romeo, and Maserati are especially strong in Europe. As for Ferrari, the Italian sports car brand is now a separate entity and would not be included in the deal.

As for the French automaker, it brings the Renault, Dacia, and Lada brands to the merger. It also owns the Alpine sports car marque and has an 80-percent stake in Renault Samsung Motors, a Korean manufacturer.

By default, Nissan and Mitsubishi are also included as Renault has a stake in Nissan, which has a stake in Mitsubishi. However, much friction exists between Renault and Nissan over the firing and legal detention of Carlos Ghosn, who was the CEO of all three firms. Renault had been pushing for a full-blown merger with Nissan, but the Japanese automaker has fiercely resisted that move. With FCA onboard, Nissan’s stake in the new entity will be diluted, which might impact the alliance.

So Much Potential

An FCA-Renault merger brings with it much promise, but also many risks. Although FCA is successful, the previous DaimlerChrysler model was not. The new entity faces challenges, including bringing different cultures together. Further, France and Italy have vested interests in the industry, with France holding a stake in Renault. In any case, it appears the French government favors the merger.

FCA’s strongest brand is Jeep, which it is quickly transforming from a regional player to an international powerhouse. Indeed, the automaker will likely press forward with a plan to build a new manufacturing plant in Detroit to produce the Jeep Wagoneer and Grand Wagoneer, upscale models designed to take on Land Rover (Discovery and Range Rover series). Jeep’s growth is phenomenal and doesn’t appear ready to slow any time soon.

The Ram brand brings big profits to FCA with the large pickup truck adding a half-million sales annually. The new entity may find fresh markets for Ram, including perhaps Russia where Lada rules.

As for the Dodge and Chrysler brands, the survival of these two marques may depend largely on just how far the merged company plans to extend its reach. Both have had a place in the American automotive landscape, with a limited reach beyond. And both have lost several models over the past few years as FCA emphasizes utility vehicles and trucks over cars.

See Also — Fiat Chrysler Automobiles: No Takers

Emerging Alliances Point to Further Auto Industry Consolidation

March 28, 2019 by admin

What a month! March 2019 may go down as a pivotal time in automotive history as auto industry consolidation talk strengthens anew.

The news is coming from all corners of the globe as multiple players talk, while others forge alliances. Consolidation certainly isn’t anything new, but the future absolutely points to a host of mergers and alliances taking shape.

2019 Ford Ranger — Volkswagen and Ford are forging a pact that might lead to a Ranger-based pickup truck for VW.

Ford, Volkswagen Tie One On

Heading the alliance news this month is a not-yet-signed agreement between Ford and Volkswagen. According to Reuters, the two automotive giants have been in talks for months and appear ready to sign a pact.

That agreement may involve Volkswagen purchasing a stake in Argo AI, which is Ford’s artificial intelligence company. Argo AI represents the blue oval’s autonomous vehicle and artificial intelligence aspirations, a company launched in 2016. Volkswagen doesn’t have an equivalent business, thus investing in Ford’s venture would give it instant access to AI.

At the same time, Ford appears ready to supply Volkswagen with a pickup truck. The German automaker doesn’t have a model for the American market, though its car-based Amarok is sold in multiple markets. Although the type of truck has not yet been identified, we believe a model closely based on the midsize Ford Ranger pickup truck seems likely.

Daimler, Geely Go Beyond Ride-Hailing

Daimler and Geely are expected to soon sign an agreement which would allow the Chinese automaker to purchase a 50-percent stake in Daimler’s Smart small-car brand. Smart has been languishing for years and talk of the brand’s demise emerged just this week.

But Smart may find new life yet as an electric car manufacturer with the Chinese market its main source. The Financial Times reports that an announcement will be confirmed at the Shanghai Auto Show in April.

The two manufacturers are no strangers, although Daimler’s Mercedes-Benz and Geely’s Volvo brands are direct competitors. In 2018, the two companies joined forces to form a China-based ride-hailing company reports CNN.

A Suitor for FCA

The late Fiat Chrysler executive Sergio Marchionne fashioned one of the most unlikely alliances earlier this decade as he married a pair of Italian and American automakers, but he was never satisfied that it would last apart from further consolidation.

Indeed, Marchionne was one of the earlier proponents of global consolidation, noting as far back as in 2009 that there would be “six survivors in the global volume sector.” Marchionne stated his viewpoint during the midst of a worldwide downturn in auto sales that nearly sunk Chrysler and GM and put other manufacturers in jeopardy.

See Also — Auto Industry Buzzword: Collaboration

Marchionne passed away in 2018, but the spirit of FCA consolidation lives on. Notably, in the past few weeks, we have heard that both France’s PSA Groupe (Peugeot, Citroën, Opel, et al) and the Renault-Nissan-Mitsubishi alliance seems interested in acquiring FCA. Jeep and Ram are FCA’s two strongest and most profitable brands and are the top prizes here. At the same time, a merger or an alliance might help FCA improve its performance in Asia, especially in China where it is particularly weak.

But these two possible companies/alliances aren’t the only ones interested in FCA. Several years back the Volkswagen Group targeted Fiat Chrysler, but its overtures were rebuffed. More recently, Hyundai expressed its own interest in the company, but it wasn’t planning to make a move until after FCA’s share values fell.

Limited Agreement Auto Trends

While further consolidation seems likely, more limited agreements between competing manufacturers will continue to emerge.

One of the results of this kind of agreement brought the Toyota Supra back to the market. The Supra’s return comes thanks to an agreement between Toyota and BMW, as the former used the latter’s Z4 platform to build its sports car. Toyota has also worked with Subaru to produce its 86 sports car, and may continue that pact for a new generation model.

Toyota, thanks to its size and deep pockets, may yet avoid the entire alliance and consolidation trend. With stakes in Daihatsu, Suzuki, Subaru, and Mazda, the company can turn to its partners to supply vehicles it doesn’t have. Further, it may work with its associated companies to spread development costs as needed without ceding control.

Waymo Expands Commitment to Chrysler Pacifica Hybrid

January 30, 2018 by admin 1 Comment

Waymo nears deployment of its self-driving vehicle fleet.

Waymo Chrysler Pacifica Hybrid — A Chrysler Pacifica Hybrid minivan outfitted with Waymo
autonomous hardware and driverless software.

The minivan segment continues to contract with Nissan the latest manufacturer to make an exit. Only one manufacturer, Fiat Chrysler (FCA), has managed to avoid the double-digit losses experienced by its competitors, thanks in large part to demand for its newest model, the Chrysler Pacifica and Pacifica Hybrid.

FCA may have found a minivan ally in Waymo, an autonomous car development company owned by Alphabet Inc., the parent company of Internet-giant Google. In 2016, FCA delivered 100 Pacifica Hybrid models to Waymo for driverless car development and testing. In 2017, Waymo placed a second order, this one for 500 units.

Thousands of Chryslers headed to Waymo

Today, FCA announced that Waymo placed another order, this one for “thousands of vehicles,” in an expanded effort to apply its self-driving technology to a mass production platform.

“In order to move quickly and efficiently in autonomy, it is essential to partner with like-minded technology leaders,” said Sergio Marchionne, Chief Executive Officer, Fiat Chrysler Automobiles N.V. “Our partnership with Waymo continues to grow and strengthen; this represents the latest sign of our commitment to this technology.”

Waymo Chrysler Pacifica Hybrid

Phoenix Deployment in 2018

Waymo’s autonomous ride-hailing service will launch later this year in Phoenix. The additional order will enable Waymo to expand beyond Phoenix to test its technology in 25 cities scattered across the United States, including Detroit, Atlanta and San Francisco.

“With the world’s first fleet of fully self-driving vehicles on the road, we’ve moved from research and development, to operations and deployment,” said John Krafcik, CEO of Waymo. “The Pacifica Hybrid minivans offer a versatile interior and a comfortable ride experience, and these additional vehicles will help us scale.”

Waymo’s first test of autonomous vehicles, comprised of retrofitted Chrysler Pacifica Hybrids, was held in November 2017. The experiment meant that no driver was behind the wheel, although technicians were present. The effort was a success and marked the first time a vehicle achieved Level 4 autonomy as classified by the Society of Automotive Engineers.

Waymo Chrysler Pacifica Hybrid

Waymo and FCA Collaboration

The modified Chryslers come equipped with Waymo’s suite of autonomous hardware as well as its self-driving software. So far, the ride-hailing company has put more than 4 million real miles on the Chrysler fleet and billions more in simulated testing.

Waymo engineers work closely with FCA engineers to ensure that Waymo technology is successfully integrated into each minivan. Chrysler says the minivan’s electrical, powertrain, chassis and structural systems are what make the Pacifica Hybrid, a plug-in hybrid electric vehicle, ideal for accommodating Waymo’s self-driving technology.

With Waymo increasing its commitment to the Pacifica Hybrid further, can a stake in Fiat Chrysler be far behind? Auto Trends believes this to be so.

2018 Chrysler Pacifica Hybrid

Sticker price from $39,995 (plus $1,095 destination charge)
Seats seven
Engine: 3.6-liter V6 eHybrid gas
260 horsepower @ 6,500 RPM
Two electric motors
Electric variable automatic transmission
Wheelbase: 121.6 inches
Length: 203.8 inches
Width: 79.6 inches
Height: 69.9 inches
Passenger volume: 165 cubic feet
Storage volume: 32.3/87.5/140.5 cubic feet
Towing capacity: Not Recommended
EPA: 32 mpg combined
Regular gasoline
Fuel tank: 16.5 gallons
Curb weight: 4,987 pounds
IIHS safety rating: Top Safety Pick
Limited vehicle warranty: 3 years/36,000 miles
Powertrain warranty: 5 years/60,000 miles
Corrosion warranty: 5 years/unlimited miles
Hybrid electrical components warranty: 10 years/150,000 miles
Vehicle assembly: Windsor, Ontario CANADA

Photos courtesy of Fiat Chrysler Automobiles.

On the Horizon: A Front-Wheel Drive Chrysler 300?

May 9, 2016 by admin 2 Comments

What could this mean for the Dodge Charger and Challenger?

2015 Chrysler 300

The next-generation Chrysler 300 may switch to a FWD platform.

The days for the current Chrysler 300 are numbered.

Introduced in 2005, the second-generation 300 bowed in 2011, offering dimensions only slightly longer and wider than the first-generation model. Now in its sixth model year, the current Chrysler 300 is showing its age — plans for its replacement are underway.

What may follow could stun enthusiasts, especially if parent Fiat Chrysler elects to place the large sedan on the same front-wheel drive platform underpinning the all-new Chrysler Pacifica minivan. If FCA utilizes Pacifica architecture to support the third-generation 300, it’ll offer optional all-wheel drive, just as it does today.

News of the 300’s possible successor was shared by FCA Chief Executive Officer Sergio Marchionne with reporters at the company’s manufacturing plant in Windsor, Ontario, on Friday reports Reuters. Marchionne was on hand to thank workers for launching the Chrysler Pacifica, representing a $2.6 billion investment in its minivan line.

That investment may never be recouped unless other models are derived from the platform. One of the models thought possible was a Dodge SUV variant — either to replace the current Durango or to supplement it.

2016 Dodge Dart

A replacement for the current Dodge Dart is still open.

Front-Wheel Drive Architecture

Moving to front-wheel drive architecture aligns with the approach Chrysler’s competitors have long taken, including the Ford Taurus, Chevrolet’s Impala, and the Toyota Avalon. Of the three, only the Taurus offers available all-wheel drive — the possible Chrysler approach is also one Audi takes, but the latter’s market is the luxury segment.

Mention “Chrysler 300” and two other models come to mind: Dodge Charger and Dodge Challenger. The current Dodge sedan and coupe share nearly everything with the Chrysler, including the platform and most major components. One difference is found in the Hellcat lines as these are unique to Dodge and have effectively placed a lucrative halo over each one.

Marchionne’s pronouncements typically provide reporters with enough fodder to keep FCA in the news, while omitting some information about related products, brands, and production facilities.

Chrysler and Dodge Separation?

Although long tied at the hip, there is nothing written in the FCA playbook that the Chrysler 300 and its Dodge cohorts must continue on the same path. Indeed, Chrysler is now a mainstream brand, while Dodge represents its performance brand.

Thus, the next-generation Dodge Charger and Challenger might continue as is or adopt an Alfa-based rear-wheel drive platform as reported by Automotive News last August. The new platform should yield a third Dodge model, Barracuda (‘Cuda), a sport coupe convertible.

Rumors that FCA might eventually kill off Dodge seem like just that — although the Dart in its current form is doomed (as is the slightly large Chrysler 200), other models such as Viper, Charger, Challenger, ‘Cuda, Durango, and the eventual replacement for the Journey should keep this brand relevant.

2015 Chrysler 200

Chrysler 200 production is winding down.

Other FCA Products and News

The 300’s future isn’t the only FCA news of late.

The next-generation Jeep Wrangler may get a twin-turbocharged, four-cylinder engine making 300 horsepower, supplementing the standard 3.6-liter, V-6. Further, production of the all-new Ram 1500 pickup truck will begin by Jan. 2018.

Production of the Dodge Dart will cease by year’s end as the Belvidere, Illinois plant where it is produced is converted to build the Jeep Grand Cherokee, now built in Toledo, Ohio. Ohio production will focus primarily on the next Wrangler as well as a Jeep-based pickup truck. Also, just as the company’s Sterling Heights, Mich., plant loses the Chrysler 200 by early next year, it will be retooled to supplement future Ram 1500 capacity.

As for the Dart and 200, Marchionne is still holding out hope that a partnership with another manufacturer to build replacement models will happen. Those models would be based entirely on a competitor’s technology. For example, Volkswagen Jetta and Passat models might be tapped and rebadged as the Dart and 200 respectively, although there has been no mention VW is even considering such a relationship.

Dealers: Use Open Recalls to Drive Sales

October 19, 2015 by admin 3 Comments

With tens of millions of passenger vehicles recalled over the past year, there is a good chance that your customers own cars with at least one or two open recalls. An open recall means that the recall is incomplete either because the customer has not responded to the notice or the manufacturer has yet to provide guidance for when the work can be accomplished.

Open recalls present an opportunity for dealers to turn owners of recalled cars into buyers of new or certified pre-owned (CPO) vehicles. Specifically, you can leverage consumer concern about a recall by selling them a different vehicle and accepting that open recall vehicle as a trade in.

Dealers and Manufacturer Buyback

This past July, Fiat Chrysler (FCA) was ordered by the federal government to recall and buy back approximately 200,000 affected vehicles. It is the first time such an order was made and the details of that program have not yet been finalized.

dealers

Dealers: Don’t allow open recalls to sink your sales.

Although the buyback will be a costly one for FCA, it may prove to be a boon as well. Indeed, when the affected customers receive their buyback notices, they will be instructed on how to turn in their Ram or Dodge vehicles. Likely, most customers will be shopping for another vehicle to replace the one turned in, giving dealers a strong opportunity to combine those checks with their own incentives.

Likely, not just FCA dealers will be taking advantage of the buyback program either. Competing brand dealers can join in by wooing shoppers desiring to switch brands. Certainly, you will need to develop your own incentive program — perhaps with manufacturer backing — in a bid to win conquest sales.

Dealer Incentive Program

Your dealership already has an incentive program in place as you work with and independently of the manufacturer to increase your sales. To win owners of open recall vehicles, you need to think outside of the box. The following are some points to keep in mind for your dealer incentive program.

1. Train your repair shop team. If customers are coming in or calling your repair shop and are expressing frustration over an incomplete open recall, a sales opportunity may be possible. Specifically, by training your shop team to ask them if they would be interested in trading in their vehicle for another one, that effort could very well lead to a sale. If the customer expresses interest in making a trade, then the repair shop should refer the customer to the sales team.

2. Reach out to your customers directly. You already know which customers have vehicles with outstanding recalls. This is where you can task your marketing team to reach out to them through a direct mail or email campaign. The campaign might address their recall concerns and explain to them that you will buy back their vehicle or give them a competitive trade toward a new or CPO vehicle. If your advertising budget is especially large, then consider running a television or radio ad to reach out to owners of all open recall vehicles in your media market.

3. Address their concerns. An open recall can be a big concern for some, especially if a safety issue remains unaddressed. For instance, a parent with small children may not want to keep their crossover utility vehicle as long as the recall remains open. Here, you could explain that you will accept the vehicle as a trade in and will also cover the necessary repairs.

4. Offer something extra. Customers with an open recall may not have a new car on their minds, but that can change if you sweeten the deal and put a time limit on it. For instance, with gas prices trending downward, you might offer customers free gas for six months, but only if they make their purchase by the end of the month. Add in all available incentives, including the conquest discount for owners of all competing brands. Leverage every angle possible to turn a dissatisfied or concerned owner into the happy owner of a new or CPO Vehicle.

5. Offer special financing. The one thing that may hold some customers back is financing. If the vehicle is leased, find out if the leasing company would consider pulling the lease forward as long as the customer agrees to lease or finance a different vehicle. Some customers may be afraid that they’ll be underwater with their new cars (owing more money on the vehicle than it is worth). Have your finance team work on favorable loan terms and leasing options to allay those concerns. Certainly, keep in mind that as recalls mount, your competitors are looking at ways to win new business too.

Open Recall Considerations

Dealers must be careful about buying open recall vehicles. Besides otherwise having an acceptable vehicle history report, you need to complete the recall before selling the car to a new party. This means working closely with the manufacturer to ensure that parts are available and the recall can be accomplished.

If you fail to complete a recall and offer the vehicle as a CPO, you might be held personally liable if a defect leads to an accident. Lastly, consider the cost of keeping a vehicle in your inventory as you await replacement parts. Keep this mind: a vehicle you are not allowed to sell represents unavailable capital.

Flagging Fiat Sales: No Easy Answer

October 14, 2015 by admin Leave a Comment

The Fiat brand has this 500X crossover in its portfolio.

It must be tough sitting in a meeting of Fiat Chrysler brand heads, especially if your brand is underperforming. Sixty-eight straight months of year-over-year sales improvements puts an enormous pressure on executives to succeed. Sure, the streak will someday be broken, but the last thing any brand head wants is to be blamed for ending it.

Fiat Chrysler has enjoyed a tremendous rebound over the past six years as two separate and distinctly different companies were merged, Ram was separated from Dodge, and Chrysler was reassigned as a mainstream brand. In addition, the Fiat brand was brought back to the US in 2012 followed two years later by Alfa Romeo. FCA is on a roll and is continuing to gain market share.

Jeep, Ram, and Chrysler are continuing to grow, but Dodge sales are down with most of that loss attributed to a discontinued product, its midsize Avenger sedan. Dodge is right where it is supposed to be as a newly minted performance brand and sales should bottom out by early 2016. As far as the Italian brands go, Alfa Romeo’s gradual roll out will receive a major boost late next year when the gorgeous Giulia compact luxury sedan debuts.

Fiat 500L

Pictured: Fiat 500L.

That leaves one brand we’ve scarcely mentioned, the eponymous Fiat marque.

Certainly, FCA had high hopes for Fiat when the first of its North American 500 models was officially presented at the 2011 North American International Auto Show in Detroit. Many believed that the diminutive vehicle would pull in customers as high fuel prices coupled with Italian enchantment would drive interest in the brand.

Unfortunately, that hasn’t happened even as new models arrived, including the compact 500L followed by the 500X crossover. Under normal market conditions all three models should provide strong sales, however this market is anything but normal as lower gas prices, excellent financing rates, and intense competition has buyers looking elsewhere. Indeed, Fiat brand sales are down 10 percent year-to-date through September and would be off by more than 20 percent without the new-for-2016 500X n the product portfolio.

The Fiat sales drop may not have a tremendous impact on FCA’s overall sales, but it isn’t something that can easily be dismissed. Perhaps that is why the company’s CEO and President Sergio Marchionne decided earlier this month that Fiat brand head Jason Stoicevich should move on.

Indeed, last week, as part of a larger shuffling of brand managers, Stoicevich was reassigned to head of fleet operations and small business sales in the US. However, by the next day Stoicevich resigned and left the company altogether. Notably, no reason has been given for his abrupt departure.

Chrysler brand chief Alistair Gardner also was reassigned, but his sales numbers were sound. Additional management shuffling was also accomplished as Timothy Kuniskis now oversees three brands: Dodge, Chrysler and Fiat.

Alfa Romeo Giulia

Alfa Romeo sales should see a spark turn into a flame when this Giulia sedan
arrives on the market in late 2016.

We might speculate on the reasons why Stoicevich left, but that theorizing would not necessarily be correct. Stoicevich was in charge of Fiat for two years and seven months and may have been disappointed with the reassignment especially with new product on the way. One of those products is the reborn Fiat 124 Spider, a new model that shares its platform with the Mazda MX-5 Miata.

It has been thought by some that the 124 Spider will be shown at an upcoming auto show, with The Detroit Bureau identifying Los Angeles as that venue. The Los Angeles Auto Show kicks off next month just ahead of Thanksgiving and is the first of four important North American shows where automakers roll out new products. Detroit, Chicago and New York follow.

With the 124 Spider in the fold, the Fiat brand should get a fresh look from customers even if its sales are small in number. As for increasing those sales to reach 50,000 units per year, Fiat may need some help in the form of higher fuel prices. Certainly, the 500X and 124 Spider will contribute, but sales of the other two models may continue to decline or at least stabilize at levels far below what FCA management wants, but probably not to the detriment of Kuniskis’ place at the management table.

Fiat photos copyright Auto Trends Magazine; Alfa Romeo photo copyright Fiat Chrysler.