Fiat Chrysler Outlines Five-Year Strategy

Sweeping revamp and expansion of several product lines announced.

Nearly five years have passed since Chrysler went bankrupt, restructured, and was thrust into the arms of waiting Fiat. Essentially, Chrysler was given up for dead with Fiat afforded the opportunity to revive the automaker and rebuild it.

That rebuilding process was centered on an ambitious five-year plan that transformed each American brand, introduced Fiat and Alfa Romeo, and created Fiat Chrysler Automobiles, N.V. (FAC), the parent of this now global automaker.

The Measure of Success

By every measure the Fiat Chrysler merger has worked out quite well with most new and updated products executed as planned. One glaring exception, the Dodge Dart, should be noted. However, it is clear that the company’s strengths are with its traditional American brands while its classical Italian brands are in need of more work.

The reworking of every FAC brand will continue as the company announced today its next five-year master plan, what may make this automaker a truly global powerhouse. Certainly, not on the scale of Toyota, General Motors and Volkswagen, but better able to compete with Hyundai-Kia, Ford, and Renault-Nissan. And it plans to do so by building sales well beyond Europe, its official home base as well as its weakest market.

Growth Projections by Brand

The centerpiece of FAC’s expansion quest will be its Jeep brand, with 1.9 million annual sales forecast by the end of 2018, more than doubling its current sales. FAC will market Jeep globally and expand its line up. A new compact model will arrive in 2016, replacing the current Patriot and Compass, and a three-row Grand Wagoneer is to be added in 2018 reports Carscoops. Its smallest model, the Renegade; arrives stateside in 2015; updates to the Grand Cherokee and Wrangler are also scheduled.

The Chrysler brand has suffered tremendously even as FAC’s other brands were improved and thrive. FAC says that Chrysler will be the lone seller of its all-new minivan and will include a hybrid variant that will achieve 75 mpg on the highway. A larger crossover and a compact “100” model will also be added. FAC’s intent is push the Chrysler brand more mainstream. These changes would raise brand sales from 350,000 units in 2013 to 800,000 units in 2018. Reaching that goal would help Chrysler attain the sales level it last enjoyed as recently as 2005.

Fiat Chrysler Automobiles
A new FCA sign is in place at Chryslers headquarters in Michigan.

FAC intends to use Alfa Romeo to compete against Mercedes-Benz, Audi, BMW and other luxury brands. CEO Sergio Marchionne plans to double the brand’s four vehicle line up to eight models by 2018, adding midsize, utility and full-size models to the mix. With these changes FAC expects A-R to grow five-fold within five years.

The one brand that has long represented mainstream Americana is Dodge. However, with Chrysler now assuming that position to compete with Toyota, Ford and Chevrolet, the Dodge brand will now represent American muscle. The refreshed for 2015 Dodge Challenger and Charger models will lead in that department, but will also be rejoined by a former halo product, the SRT Viper. SRT will now be folded into Dodge with Viper assuming its previous relationship. Dodge will also say good-bye to the Avenger and so long to the Grand Caravan, updating the Dart by adding all-wheel drive and SRT variants. New Journey and Durango models will also roll out and a B-segment (subcompact) sedan and hatchback will be introduced by 2018.

With only the 500 and 500L to show for it, the North American Fiat offerings have been weak. Although Fiat brand plans show much stronger growth abroad, particularly in Europe, we’ll see the 500X crossover here next year. That model will share its underpinnings with the Jeep Renegade, itself an all-new model. Likely, Fiat will also get a speciality vehicle, a sports car, co-developed with Mazda. That will still make for a limited US line up, but it could raise customer interest in Fiat further with new products following.

The rest of FAC’s lineup includes Ram, its truck line. Marchionne announced that a ProMaster City van will arrive early next year, based on the current Fiat Diablo. The only other change has its big pickup trucks overhauled in 2017, a year later than originally scheduled.

Both Maserati and Ferrari will continue as FAC properties with only Maserati slated for expansion. New crossover, coupe and convertible models are planned with an all-new Grand Turismo model arriving by 2018. Maserati’s current sales are 15,000 per year and should rise to 75,000 under the FAC formula. Ferrari, on the other hand, will be restricted to just 7,000 units annually reports Automotive News.

Fiat Chrysler Strategy

Clearly, Marchionne has an aggressive growth strategy in place, one that relies on continued growth in the US, stability in Europe and the expansion of its global reach with Jeep leading the way. That makes for an ambitious plan, but so was the original five-year strategy, one that revived two weak automakers, transforming both into a much stronger singularity.

Rear-Wheel Drive Architecture For Future Chrysler Products

Chrysler’s rear-wheel drive architecture has set it apart from its domestic competitors with its large Dodge and Chrysler sedans underpinned by this platform layout. Chevrolet’s lone entry is its Australian-supplied SS while Ford relies on front-wheel drive and optional all-wheel drive for its Taurus sedan.

Dodge rear-wheel drive models.

A pair of current rear-wheel drive Dodge beauties.

 

Rear-Wheel Drive Architecture

Future Chrysler products will continue to offer rear-wheel drive, something that sources had told Auto Trends recently and what Automotive News [subscription req’d] confirmed on Monday. Fiat and Chrysler are currently working on a next generation platform that will underpin select Alfa Romeo, Chrysler and Dodge products beginning with 2016 model year vehicles, with optional all-wheel drive expected.

The joint effort comes as Fiat desires to take on the German luxury triumvirate — Audi, BMW and Mercedes-Benz — with higher volume models. The platform being developed may target two distinct segments, notably with BMW’s 5- and 7-Series in the crosshairs. The Alfa Romeo products would eventually find their way to the US and would also be marketed in China and other markets.

Chrysler Sedans and Coupe

For Chrysler, the new rear-wheel drive platform would underpin the next generation Chrysler 300 and Dodge Charger sedans as well as the Dodge Challenger coupe. All-wheel drive variants of the sedans would also be made available. An AWD Challenger might be intriguing, but it is unlikely.

The Dodge Challenger had been rumored to be on its way out, replaced by the SRT Cuda, something that Car and Driver pointed out in its October 2012 issue. Auto Trends, however, believes that this won’t be the Chrysler Group’s approach. Instead, the Dodge Challenger will survive and if a ‘Cuda model does debut it will be wear Chrysler badging, not SRT. For now, the Viper will remain SRT’s lone model with the street & racing technology brand also tasked with developing SRT sub-models for the other Chrysler brands.

Brand and Product Differentiation

The Chrysler Group is also looking to differentiate its brands further by separating like products such as the Chrysler 200 and the Dodge Avenger. The Chrysler 200 name will survive and that vehicle will most likely debut in early 2014, underpinned by a modified Lancia platform.

The Dodge Avenger may solider on for another model year before it is killed off and replaced by a new model, a crossover, that would also replace the Dodge Journey. Unconfirmed and certainly of speculative nature is that the Avenger’s replacement would be rear-wheel drive, perhaps a chopped version of the new rear-wheel drive platform. That would give Dodge three rear-wheel drive models, delighting enthusiasts, but we believe that costs and the model’s now unusual layout (i.e., RWD non-luxury midsize sedan) would preclude that from happening. Then again, it might be the approach for Alfa Romeo to take.

Tougher Federal Fuel Requirements

Looming large for Chrysler and other manufacturers are the increasingly stringent federal fuel economy averages that will require automakers to offer fleets averaging 54.5 miles per gallon by 2025. Chrysler’s fleet is one of the heaviest in the industry and scaling down won’t come easy with RWD vehicles in the line up. What Chrysler will do is make greater use of Fiat-supplied TigerShark four cylinder engines in some models, perhaps a turbo version of the same in its large sedans. Those models would also get the 3.2-liter Pentastar V-6 with a supercharged version of the same arriving a few years later and possibly replacing any remaining V-8 engines.

Auto Trends seems further industry consolidation over the next few years with alliances, not outright mergers, driving the industry. With Mazda supplying a Miata-derived sports car for Fiat, we’re fairly confident that this relationship will expand despite Mazda’s working relationships with Toyota and Nissan. Mazda is simply too small to continue on its on and might prove a nice addition to Sergio Marchionne’s portfolio.


See Also — Head over to Central Contracts to explore your Chrysler leasing options.

Photo courtesy of the Chrysler Group, LLC.

Sergio Marchionne Updates Chrysler-FIAT Progress

The Chrysler-Fiat union continues to progress with CEO Sergio Marchionne making an unlikely union of North Americans and Europeans work. The unlikely part must be said as Chrysler was just two years removed from its bitter Daimler divorce when Fiat came courting. The DaimlerChrysler relationship was a tale of clashing cultures, one that seemed doomed from the outset.

Chrysler’s Recovery

In Chrysler, Marchionne found an opportunity too good to pass up and with the Obama administration’s backing Fiat soon found itself the owner of the Jeep, Chrysler and Dodge brands. Marchionne made quick work of the relationship by separating Ram from Dodge, rolling out 16 new or updated products for the 2011 model year, and reintroducing its Fiat line to the North American market.

Sergio MarchionneThrough the intervening years, Chrysler went from a money loser to a profit maker. Indeed, in 2011 Chrysler netted $183 million. In 2012, that profit mushroomed to $1.7 billion. Across the board sales increases have certainly helped, with the profitable Jeep brand and Ram 1500 lines contributing the lions share of the automakers new-found wealth.

Webcast Conference Call

Marchionne is dead set against maintaining the status quo and is working feverishly to ensure that the Chrysler-Fiat hook up thrives. As January came to a close, the executive held a webcast conference call to outline the company’s strategy for the remainder of 2013 with some hints of what else is to come.

Notably, Marchionne insists that the various Chrysler and Fiat brands will avoid competing with each other, with unique products sold by each. On the corporate level, the Chrysler and Fiat entities will continue to work together with a formal merger expected down the line. Already the company has a single leadership team in place tasked with managing both companies.


See AlsoFiat Chrysler Renault Merger Talk Heightens


New Models Planned

New to the market this year is a significantly refreshed Jeep Grand Cherokee, a model that offers an optional 3.0-liter diesel engine. Its Compass and Patriot lines are now outfitted with a six-speed automatic transmission and the replacement for the Jeep Liberty debuts this year as well. For Ram, its heavy-duty pickup trucks have been refreshed and a new commercial van comes to the market this year. Fiat, short on models but not on size is getting the Fiat 500L, a four-door model that should extend this brand’s reach in North America.

But, the biggest changes we will see in coming years won’t be with the Ram, Dodge, Jeep and Chrysler brands although these makes won’t be hurting for new products and updates. What we will see is a greater expansion of Fiat and the introduction of Alfa Romeo, the latter’s products reappearing this year. Both Italian brands will maintain matters for 2014, but come 2015 an onslaught of new Fiat and Alfa Romeo models will hit the market. Every new model will be Fiat-produced and will not overlap other Chrysler products.

Down the Line

All told, the Chrysler report shows as many as 12 new Fiat and Alfa Romeo vehicles on sale in North America by the end of 2015. By then, the two companies may be fully merged, with the location of its global headquarters and its official name still to be determined.


See AlsoFiat Chrysler Automobiles: No Takers

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