FIAT CHRYSLER AUTOMOBILES

New Products May Bolster Ram Brand

November 5, 2015 by admin Leave a Comment

Where is Fiat Chrysler Automobile taking the Ram brand? A large SUV is under consideration, what could bring sales and big profits to this truck-based marque.

Ever since Fiat Chrysler Automobiles separated Ram from Dodge to form a distinct brand, enthusiasts have wondered if additional products might eventually join the model line. Well, those products have come in the form of two Fiat-supplied products — the ProMaster Van and the Promaster City — a pair of commercial vehicles accounting for fewer than 1 in 10 Ram models.

The 1500 as well as the 2500/3500 series pickup trucks has essentially been the Ram brand, but other models are under consideration. This past August Auto Trends explored the possibility of a midsize Jeep pickup, one that might also yield a Ram variant, to replace the previous Dodge/Ram Dakota.

Jeep hasn’t committed to re-entering the expanding segment, but as Ford seriously considers returning with an all-new Ranger, the possibility of new models from Fiat Chrysler shouldn’t be quickly dismissed.

A Big Ram SUV?

Last week, Automotive News shared the news that a large SUV based on the Ram 1500 line is a possibility. That model, if built, would compete against the Chevrolet Suburban and Ford Expedition, SUVs derived from each manufacturer’s pickup truck line.

Fiat Chrysler President and CEO Sergio Marchionne sees a segment ripe for the participation and believes that his company has “…a reasonable chance of getting at least part of that market.”

He also believes fuel prices will remain low for the foreseeable future, although it would take several years to ready such a model for the market. Anything can happen in the interim.

Readying a New Ram 1500

The current generation Ram 1500 arrived on the market in 2010 and received an update in 2013. It will receive yet another refresh before the next generation model arrives in 2019. The delay comes as Fiat Chrysler pours money into resurrecting Alfa Romeo. It will also permit time for an expected aluminum-bodied truck to make its debut.

Likely, the big Ram SUV would follow the new pickup trucks by a year, a customary delay that Ford and Chevrolet usually follow with their own models. That means the new model is still four years away and a lot can happen between now and then.

Making Money With Big SUVs

Larger vehicles, including SUVs have some of the highest profit lines in the business. The last time Chrysler fielded such a model was in the two-door Dodge Ramcharger, a full-size SUV built from 1974 to 1994. The Ramcharger was based on Dodge’s earlier D Series line. But, when the all-new Dodge Ram rolled out, it was retired.

Also, instead of continuing with the Ramcharger, Chrysler concentrated on building the Jeep Grand Cherokee and the Dodge Durango, two distinctly different midsize SUVs. Continuing with the Ramcharger would have also adversely affected the manufacturer’s corporate average fuel economy (CAFE) ratings — the company has long been top heavy with less fuel efficient models.

A Three-Row Jeep Grand Wagoneer

Bringing a new SUV to the Ram line would come just as the automaker readies another product, the three-row Jeep Grand Wagoneer. Unlike a potential body-on-frame Ram SUV, the Grand Wagoneer will be of unibody construction. FCA intends to have it compete with the likes of Land Rover, by taking a more upscale approach to the market.

Likely, FCA is looking at other products to expand the Ram line. Beyond a large or midsize SUV, the lower end of the market might also yield a product. However, fuel prices, FCA profitability and market factors can impact these plans, pushing some products back while perhaps bringing a few others to the forefront.

Fiat Chrysler Eases up on the Alfa Romeo Pedal

November 3, 2015 by admin Leave a Comment

Sergio Marchionne rethinks FCA’s Alfa Romeo strategy as China’s new car sales cool.

Alfa Romeo Giulia.

Up next: Alfa Romeo Giulia.

When announced, it was immediately recognized as a tremendously ambitious plan for the Alfa Romeo brand when Fiat Chrysler boss Sergio Marchionne stated last year that global sales for the Italian marque were projected to reach 400,000 units worldwide in 2018. Representing nearly a six-fold sales increase over 2014, that figure was based on a $5.5 billion product investment, yielding as many as eight new models.

Much has changed since Marchionne made his eyebrow-raising prediction. The most significant change has to do with China, a market that has cooled and one FCA had expected would represent a significant part of Alfa’s growth. With China no longer the dependable market for new products it once was, the automaker will concentrate on strengthening the brand’s appeal in two other key markets — the United States and in Europe reports the Detroit Free Press.

New Products for Alfa Romeo

Nevertheless, Alfa Romeo will still get its new products. For instance, the Giulia sedan introduced in Italy last summer should reach our shores sometime next year. Specifically, it is an entry-level model with a high-performance variant, designed to take on the BMW 3 Series and the M3.

Additional products expected include a midsize coupe, at least two sports car, a large sedan, and a pair of utility vehicles. As a result, the release of those models over a three- to four-year period will now take five or six years to complete. Although the sequence of product rollouts and the timetable for those releases will be adjusted, we don’t yet know how it will unfold. An announcement will wait until January, according to Automotive News.

China Slowdown and a Market Peak

Certainly, the change in schedule is a disappointment for Marchionne and a bit of an embarrassment. At the same time, those plans followed earlier projections that were equally ambitious, but were established when key consumer markets were red hot. With China’s ascendancy slowing down and as the US market approaches its peak, an honest review of the Alfa Romeo itinerary is warranted.

The Alfa reworking comes as FCA must also manage expectations for its other brands. For example, the Fiat brand hasn’t met sales forecasts, although the 500X crossover has shown promise. Fiat’s gradual product expansion comes as consumers switch to crossovers, essentially leaving the 500 and 500L behind.

Jeep Tops 1 Million Sales Worldwide

The brightest mark in the FCA brand portfolio is Jeep. The 4×4 brand topped one million global sales last year as the automaker continues to bring Jeep goodness to more markets. Notably, October 2015 US sales for FCA rose 15 percent on the strength of a 33 percent increase for Jeep. Indeed, top to bottom every Jeep model is contributing; the all-new Renegade is now outselling the Compass.

As FCA adjusts its Alfa Romeo plans, it may once again look at the time schedule for its other brands. This past June, Reuters reported that FCA was delaying the release of “…at least a dozen current or new vehicles in North America.” Those models include the high volume Ram 1500 and the Jeep Wrangler as well as new models such as the Jeep Grand Wagoneer.

Most of the delays can be measured by the number of months, although a few models are scheduled to arrive a full year later than originally planned. However, pulling forward with the production schedule means leaning on suppliers to step up their game. Such pressure could backfire for a family of brands that are already at or near the bottom for quality.

Fiat Chrysler Product Delays Mount

June 30, 2015 by admin Leave a Comment

Product delays will keep several Jeep, Ram, Dodge and Chrysler products from reaching showrooms when originally planned. FCA is pouring its resources into Alfa Romeo, a gambit that might backfire.

Alfa Romeo Guilia — FCA is pinning its hopes on the Alfa Rome Giulia.

Fiat Chrysler Automobiles (FCA) has been in the news a lot lately, mainly due to chief executive Sergio Marchionne’s efforts to find his company a partner. The company itself is a new union of European and North American enterprises, but Marchionne insists that FCA could cut its costs by partnering with another automaker.

For FCA, the automaker is battling two problems: its debt levels are high and profit margins are low, twin threats to a company’s vitality when the economy is good as well as to its viability when the economy takes a downturn. Perhaps seeing that the next downturn is looming, Marchionne has been redoubling his partnership efforts.

Alfa Romeo Guilia

Marchionne is also gambling that Alfa Romeo will make huge inroads as new products come to the market. Last week, Alfa showed the world its midsize Giulia, a luxury sedan that FCA says will lead an eight-car onslaught in a bid to elevate this once moribund marque.

The new model has the looks to be a winner, but executing a flawless introduction is key. Moreover, competitors such as BMW, Jaguar, Cadillac, Lexus, Mercedes-Benz, Lincoln, Infiniti, Audi, and Acura are not about to cede marketshare to Alfa Romeo without putting up a fight.

Pouring billions into propping up Alfa Romeo means that FCA’s other brands will have to make do with less. Or at least wait a bit longer for new products to arrive.

Jeep and Ram Product Postponements

Just last week Automotive News reported that the planned redesign of the Jeep Grand Cherokee for 2017 will be put off until late 2018 or even later. And it isn’t the first product delay noted.

Because of the Grand Cherokee push back, the upcoming Grand Wagoneer flagship will be delayed as well. The new, full size model would essentially complete the product line, giving the brand strong models from top to bottom.

In early June, Reuters reported that FCA’s big profit model, the Ram 1500, would be delayed by several months, missing its mid-2017 debut. Instead, November 2017 has been targeted as a more likely introduction date.

The Jeep Wrangler, initially planned for an early 2017 release, isn’t expected to arrive until July 2017. Two issues may factor in the Wrangler’s delay:

1), a decision to reverse course and stay with a body-on-frame model instead of the earlier proposed unibody design and,

2), FCA hasn’t announced where it will be built. The Wrangler has long been produced in Toledo, Ohio, but production can be moved elsewhere. Likely, it will be part of the UAW’s negotiating strategy when contract talks are held this September.

Additional product delays will likely involve the Chrysler 300.

Additional Product Delays

Delays for higher profit line models follows the postponement of production revamps for several lower cost models, including the compact Dodge Dart sedan and the Dodge Journey crossover. Instead of new models arriving in mid-2016, both vehicles will likely get refreshed and wait an additional three years for revised models.

Other vehicles that may see delays include the Chrysler 300 and Dodge Charger sedans as well as the Dodge Challenger coupe. And the singular replacement model for the Jeep Compass and Patriot due out early next year will be delayed by at least six months.

Saving Money: At What Risk?

The product delays will allow FCA to put off some of its expenditures to later dates, possibly in a bid to see if Alfa Romeo takes off. A promising Alfa Romeo brand could make FCA a more desirable partner, but it comes as a huge gamble, especially if the product delays send customers shopping for newer designs elsewhere.

Meanwhile, FCA’s bid for GM remains in play. Earlier this month the two companies hired financial advisers to assist them. Furthermore, hedge fund Greenlight Capital snapped up more than 9 million shares of GM stock in the first quarter of 2015.

Lastly, John Elkann is chairman of FCA and oversees the Exor fund in Italy. He is the grandson of Gianni Agnelli and has been advising the family on how best to take on GM. His skill as an investment banker included a hostile takeover of a reinsurance company, PartnerRe. USA Today says that Elkhann “has no qualms about becoming an activist investor.”

See Also — Fiat Chrysler Automobiles: No Takers

Fiat Chrysler Automobiles: No Takers

June 10, 2015 by admin 3 Comments

The Fiat Chrysler merger drama continues. The current narrative has boss Sergio Marchionne asking activists to pressure GM to buy FCA.

Fiat Chrysler chief executive Sergio Marchionne has been pressing hard to find a partner for his company. Trouble is, there are no takers and not a whiff of interest has been expressed by a single manufacturer within and without the industry.

That hasn’t stopped Marchionne (pictured, right) from employing tactics that are raising eyebrows everywhere, including at the General Motors Company. Indeed, GM has confirmed that Marchionne reached out to CEO Mary Barra earlier this year in a bid to arrange a meeting to discuss a possible alliance. However, that overture was rebuffed.

Now, Marchionne is appealing to investors in a bid to force GM’s hand. Its part of his personal quest to push for industry consolation, a move that he claims would save manufacturers billions of dollars in start up costs.

Sources, including the Wall Street Journal, claim that Marchionne has been energized by activists at GM who have successfully pushed for the company to raise its stock dividend and buy back billions of dollars in stock. To that end, Marchionne is appealing to these same activists to help move the needle.

But Mary Barra insists that her company won’t and cannot be distracted as GM continues with an internal consolidation that has saved the company billions of dollars and should continue to reap benefits as it seeks to gain a leading position on return of capital. Moreover, the company is eager to bring the ignition switch matter to an end, a debacle that has claimed the lives of at least 111 people to date.

With each pronouncement that Marchionne makes at a press conference, an industry event or elsewhere, reactions are coming from other quarters, including the rank and file that stands to lose the most, if FCA were acquired, as well as from dealers who wonder if the delay in important new product, including the next generation Ram pickup truck will have on its sales.

2016 Alfa Romeo 4C

And then there is the curious stance Marchionne is taking with advancing Alfa Romeo, an upscale vehicle line that has just begun to sell cars in the US after a two decade hiatus.

Alfa Romeo returns to the US market this year and will offer 400 copies of its 4C Spider. But that’s just a tiny slice of the 150,000 Alfa units per year FCA says that the market will sustain by 2018. Its part of a $7 billion investment FCA is making that is supposed to yield 8 new Alfa Romeo models and raise global sales from 74,000 annual units to 400,000 vehicle sales within the space of four years.

That ambitious goal has its share of naysayers who doubt that Alfa can muscle into a market dominated by such luxury makes as Mercedes-Benz, BMW and Lexus. In essence, Marchionne is attempting to elevate Alfa within years for what has taken decades for brands such as Acura and Infiniti to find favor amongst discriminating consumers.

Ram ProMaster City

Ram and Jeep are the two most valuable FCA brands.

Industry scuttlebutt has Marchionne talking up a merger with GM to perhaps force another manufacturer’s hand, namely the Volkswagen Group. Volkswagen has expressed interest in buying one or more Fiat brands in the past and could leverage FCA to dramatically heighten the company’s ascendancy in the United States.

Certainly, acquiring FCA would push Volkswagen Group US sales into second place behind GM and ahead of Ford and Toyota, an especially enticing move that would give this German manufacturer an edge it hasn’t been able to realize on its own. Consequently, it would also push VW’s annual sales to about 15 million units or well ahead of Toyota and GM.

Marchionne’s motives regarding securing a suitor may not be clear, but some analysts are sensing his desperation. Whether that worry is authentic or contrived, the best approach here might be for executives to simply wait and see.

Pentastar Engine Family Passes 5 Million Milestone

May 28, 2015 by admin Leave a Comment

Pentastar is the name of Fiat Chrsyler’s modern V-6 engine family. The engines are found in more than a dozen models, and power a variety of vehicles. To date, more than 5 million of these engines have been deployed worldwide.

The Jeep Grand Cherokee was the first FCA model with a Pentastar engine.

Fiat Chrysler Automobiles announced on Wednesday that its family of V-6 Pentastar engines just surpassed a significant milestone. Notably, five million of its popular V-6 engines have been placed under the hood of an assortment of Chrysler, Dodge, Ram and Jeep vehicles, and demand for these modern power plants continues to grow.

Three Engine Displacements

First introduced in 2011 to power the Jeep Grand Cherokee, FCA has since expanded the engine line to include power plants displacing at 3.2- and 3.0-liters each. The smallest of this intrepid trio is produced for the Chinese market only.

FCA says that its Pentastar engine family represents its most advanced six-cylinder engines yet. Pentastar incorporates a number of technologies, which enable the engine to squeeze out more power from each footprint and do so efficiently and in an environmentally responsible way. Some 14 vehicles across four FCA brands offer Pentastar engines.

“The success of the Pentastar V-6 engine family continues to be a testament to our powertrain engineering prowess,” said Bob Lee, Vice President – Engine, Powertrain and Electrified Propulsion, and Systems Engineering, FCA – North America. “This engine delivers world-class performance in multiple displacements and vehicle applications around the globe. We’re extremely proud of how this engine family has evolved to provide our customers with a wide range of performance capabilities.”

The base engine for the Dodge Charger is a Pentastar engine.

Three Engine Plants

It takes three engine plants to handle Pentastar demand. All three plants — Trenton Engine Complex, Saltillo South Engine Plant (Mexico) and Mack Avenue Engine Plant — produce the original and the largest of the three engines. The Trenton facility also produces the smallest engine, while the Mack Avenue plant builds the middle engine.

Pentastar has enabled FCA to claim horsepower leadership in a number of categories. For instance, the 283-horsepower achieved by the full-size Ram ProMaster van is the best in its class. Further, the 295-horsepower output of the Chrysler 200 is tops amongst midsize sedans. Moreover, the Dodge Grand Caravan and Chrysler Town & Country minivans also achieve 283-horsepower, besting competing vehicles such as the Honda Odyssey, Toyota Sienna and the Kia Sedona.

Old Engines Expunged

When Chrysler began development of its Pentastar family, it sought to replace as many as seven V-6 engines of varying ages and sophistication found across its product lines. That meant accommodating a variety of drive systems — front- rear-, all- and four-wheel drive as well as both manual and automatic applications. Notably, the Pentastar family is paired with 6-speed manual as well as 6-, 8- and 9-speed automatic transmissions.

Regardless of displacement, there are commonalities across the Pentastar family line. For instance, the engine family features a 60-degree, deep-skirt, die-cast-aluminum cylinder block with six-bolt main caps designed to offer matchless rigidity for noise, vibration and harshness mitigation.

A Pentastar V-6 engine in the Chrysler 300.

Other features include: variable valve timing, contoured composite cylinder-head covers, select-fit pistons with polymer-graphite-coated piston skirts, and a special “silent time” drive chain with inverted teeth in a bid to minimize sprocket noise, vibration and harshness.

FCA also likes to point out the engine family’s specially designed exhaust manifold. This unit is integrated with the cylinder head for outstanding effectualness. And not to be left out is the intake manifold, what benefits from low-rumble tuning.

Pentastar Family Usage

Can you name the 14 vehicles that offer Pentastar engine? Hint: it is found in midsize and larger models.

In an case, you can find Pentastar in the Chrysler 200, 300 and Town & Country; the Dodge Durango, Charger, Challenger, Journey and Grand Caravan; the Jeep Wrangler, Cherokee and Grand Cherokee; and in the Ram 1500, C/V Tradesman and ProMaster.

See Also — Premium Value: Chrysler 300 Limited

Fiat Chrysler Automobiles: Done Deal

January 31, 2014 by admin 2 Comments

Chrysler is the automotive manufacturer that refuses to die. Since the late 1970s, the company has experienced several near-death experiences, managing to get back on its feet with a lot of outside help.

Government Loan Guarantees

In 1979, Chrysler received $1.2 billion in loan guarantees, designed to keep the automaker afloat. It also renegotiated hundreds of millions of dollars in debt, forcing its creditors to absorb those losses. Later, the company launched its K-Car line and an untold number of variants including its highly-popular Plymouth Voyager and Dodge Caravan minivans.

Although hardly out of the financial woods by the time it bought out AMC in 1987, the move enabled Chrysler to get what it really wanted: Jeep. It also began one of its most ambitious product undertakings launching an all-new Dodge Ram pickup truck, its Viper sports car, the Jeep Grand Cherokee, and its line of LH front-wheel-drive large sedans. Chryslers resurgence and improved outlook caught the attention of Daimler-Benz, the German automakers and producer of Mercedes-Benz.

Daimler Buys Chrysler

In 1998, an all-new DaimlerChryslers entity was launched, what was supposed to have been a merger of equals, but never was. The two companies never managed to make a go of it, leading to a messy divorce that was finalized in 2007; the Chrysler portion was sold to Cerberus, a private equity firm.

Cerberus wasnt able to reorder Chrysler, watching its losses mount as the economy slid, with the automaker filing for bankruptcy two years later. That led to a historic government intervention that bailed out both GM and Chrysler, and gradually folded the latter into the arms of Fiat, the Italian automotive manufacturer.

Fiat Takes Control

Since 2009, Fiat took control of Chrysler and was awarded increasing shares in the automaker as it met each required threshold. Fiats intent from the start was to acquire Chrysler and snapped up the 41.5 percent stake it did not own earlier this month, paying the UAWs trust $4.35 billion to do so.

On Jan. 29, 2014, Fiat Chrysler Automobiles N.V. (FCA) was formed, a company organized in the Netherlands, but a resident for tax purposes in the United Kingdom. Shares of Fiat stock will be exchanged one-for-one for FCA stock, with common shares listed on the New York Stock Exchange (NYSE) as well as on the Mercato Telematico Azionario (MTA) in Milan, Italy.

Fiat Chrysler Automobiles

Very little in the day to day operation of the combined automaker will likely change. Fiat and Chrysler have been working toward this day for more than five years, with Sergio Marchionne guiding the transition. What is new is the logo, a modern design that will soon be seen everywhere. It is the work of RobilantAssociati, but there is much significance in its design.

In developing the design, the branding project looked to demonstrate a transition from its past without severing its roots while also reflecting the global scope of FCAs work.

There is a geometric configuration at work in the logo too with the F, derived from a square, symbolizing concreteness and solidity. The C, derived from a circle, represents wheels and movement, and also symbolizes harmony and continuity. The A, derived from a triangle, indicates energy and a perennial state of evolution. Both Fiat and Chrysler corporate logos will give way to the new logo although both Fiat and Chrysler car brand logos are expected to remain unchanged.

Sergio Marchionne Comments

Following the vote by Fiat S.p.A.s board to approve the corporate reorganization and formation of the FCA, CEO Sergio Marchionne remarked how the two companies worked tirelessly …to transform differences into strengths and break down barriers of nationalistic or cultural resistance. Marchionne noted that the now global automaker has a mix of experience and know-how on a level with the best of our competitors.

Theyll need that to compete in a market where Toyota, Volkswagen, and General Motors are the top three manufacturers and with Hyundai-Kia, the Ford Motor Company, Renault-Nissan, and Honda competing for the same customers. Moreover, with increased consolidation and cooperation likely in the coming years, FCA will need to continue to form its own framework for success, including crafting it own partnerships.

Long-Term Business Plan

As far as the company’s long-term business strategy, the automaker will submit a business plan to the financial community by early May 2014. Fiat Chrysler Automobiles has reassured supporters that the merged entity will not reduce headcount and that it will continue to maintain operations in Turin, Italy, and in Auburn Hills, Mich., avoiding potential political controversy in both nations.

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Photo courtesy of Fiat Chrysler Automobiles N.V.