AD #1372 – FCA’s Five Year Plan, SRT No Longer Stand Alone Brand, GM’s Tailor Made Covers
May 7th, 2014 at 11:55am
Runtime: 7:28
- Fiat-Chrysler’s Five Year Plan
- Fiat Aims For Big Growth Outside Europe
- Jeep to Drop Compass and Patriot
- Chrysler to Become Main Brand in North America
- SRT No Longer Stand Alone Brand
- GM’s Tailor Made Covers
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Welcome to Autoline Daily where the news today is all about the Fiat-Chrysler 5-year plan.
FIAT-CHRYSLER’S FIVE YEAR PLAN
Yesterday CEO Sergio Marchionne laid out the next steps for the company and they’re pretty ambitious. There are basically five points to the plan.
First, they plan to put a lot more resources behind Maserati and Alfa-Romeo. Those brands will be built in Italy in underused plants to boost the company’s capacity utilization. The goal is to sell 75,000 Maseratis and 400,000 Alfas worldwide by 2018. In North America, Alfa is slated to get 8 models and a sales target of 150,000 cars and crossovers. In the U.S. both Alfa and Maserati will be sold in, and I quote, “the best Fiat dealers.”
Second, in Europe they will move the Fiat brand into more upscale products, namely CUVs and SUVs. But the company will not invest any money to try and grow Fiat’s market share in Europe. Instead, Fiat will concentrate on growing outside of the EU.
Third, and perhaps the most important part of the plan is to grow Jeep sales to 1.9 million vehicles by 2018. They’re going to build three Jeep models in China which is where most of that growth will come from. The Compass and the Patriot will be dropped in 2016 and replaced with a C-class SUV. And in 2018 Jeep will revive the Grand Wagoneer to push the brand further upscale.
Fourth, the goal is to hit 7 million vehicles in sales, including its existing joint venture partners, mainly in China. Sergio Marchionne says they can hit this number without taking on any other partners. Marchionne says, “If I can get to 6 million cars, it’s D-Day,” meaning the company can survive on its own. That would seem to squelch rumors that Fiat was looking to join forces with a Japanese automaker.
And the fifth step in the plan involves how to pay for it. Marchionne says Fiat-Chrysler will be able to generate all the cash it needs and will emerge as a debt free company in the next five years. By 2018 he wants revenue of $175 billion and a net profit of $7 billion.
Those are the five main steps, but there are a tremendous amount of other details. For example, the Chrysler brand will now become the company’s main mass market brand in North America, and will get a full lineup of products to compete effectively with Chevrolet, Ford and Toyota. That will include a plug-in hybrid version of the Town & Country minivan and a plug-in full size crossover. Dodge will focus primarily on muscle and performance. So the Avenger and Grand Caravan get axed. And SRT will no longer be a stand-alone brand. It gets moved back into Dodge. So yes, you can call it a Dodge Viper once again. And no more SRT Jeeps or Chryslers. Ralph Gilles, who had been running the SRT brand, will continue to head up Chrysler design and motor racing activities. The Ram brand, which has been wildly successful, does not change at all.
Once they hit their plan, Marchionne says he would like to spin Ferrari out and issue an IPO. He says Ferrari generates a billion in cash every year and half a billion in profits. And he scolded analysts who value Ferrari at $5 to $7 billion, saying its actually worth twice that. And he says if the company desperately needed money it could always do this sooner.
And finally, Sergio plans to hang around as CEO until the plan is successful. But he hinted that if the company hits the $7 billion profit goal ahead of time, that’s when he’ll step down.
OK, enough of all the Fiat-Chrysler 5-year plan. Let’s take a break and look at how GM is covering up its products.
GM’S TAILOR MADE COVERS
In order to better protect its cars going from the factory to its customers, GM is using custom fit covers instead of plastic wrap that is commonly used. Here’s a video the company put together that explains the process.
(Today’s look at GM’s custom covers is only available in the video version of the show.)
GM is using the tailor made covers to ship Corvettes and Cadillac ELRs in the U.S. But it’s also putting them on vehicles that it exports like its pick-up trucks, the Opel Ampera, the Chevy Volt and Malibu. GM says that about 100,000 vehicles will use the custom-fit covers.
Don’t forget to join us tomorrow night for Autoline After Hours. Our guests will be the Gutierrez brothers of drag racing fame. And they’ll have their car in the studio with us. With that and some of the best insider discussion of what’s going on in the auto industry, you’ll want to make a point of catching this show.
But that wraps up today’s report. Thanks for watching and please join us again tomorrow.
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Comments (31)
May 7th, 2014 at 12:03 pm
I suppose the new Journey will also be built off the same Alfa architecture as the rest of the bunch, Deja vu all over again, folks!
May 7th, 2014 at 12:12 pm
It looks like Jeep is once again,(yet again??) wheeling out the 2005 concept mid size pickup truck…..yawnnn.Their teasing with that chestnut is really boring.Although the article has it wrong in their timeline,it was first rolled out wayy back in 05.The it was repainted in bright yellow and re-rolled back out for the ohhhsss and ahhhsss in 08,with no production date.If by chance they ever do bring it out,everyone that wanted one will already have a diesel midsize truck from GM/Nissan/Toyota.Way to go manley…loser.
http://news.pickuptrucks.com/2014/05/could-fiat-chryslers-new-plan-include-a-jeep-pickup.html
May 7th, 2014 at 12:21 pm
I’d give Sergio a lot better chance of meeting his goals in China, than selling 150,000 Alfas a year in North America.
As far as the Alfa platforms, they seem to be ok, but with both the Dart and Cherokee, it seems that they are having trouble getting the power trains where they should be. I don’t know why they are having trouble getting a 9 speed automatic transmission to shift smoothly, but that’s what we keep hearing about the Cherokee.
May 7th, 2014 at 12:22 pm
Well, the Fiat-Chrysler plan sounds great, and I wish them luck, but I recall back in the early 2000s when Dr. Z pronounced the company’s (Chrysler) plan to get to 4 million. We all know that never happened. I hope that this time around, they stick to the plan…
May 7th, 2014 at 12:27 pm
2, They should just go ahead and build a Wrangler-based pickup. It would be cheap to do, and people would buy it, just because it would look cool, if properly done.
May 7th, 2014 at 12:38 pm
NICE TO SEE THAT ALFA ROMEO HAS (FINALY) HAVE A PLAN FOR THE US MARKET NO JOKES ANYMORE . BUT TO KILL THE DODGE GRAND CARAVAN THAT MAYBE A BIG MISTAKE . I WORKED AT DODGE DEALERSHIP ALMOST 14 YEARS AGO AND I CAN TELL YOU ALL THEY MOSTLY SOLD WERE CARAVANS AND RAM TRUCKS THAT WAS THERE BREAD AND BUTTER OF THE COMPANY AND THAT IS WERE MOSTLY WERE THE MIDDLECLASS CAN AFFORD . NOT ALL US CAN AFFORD A $35,000 AND ABOVE CHRYSLER TOWN AND COUNTRY IN OPINON THEY SHOULD HAVE KILLED OFF THE TOWN AND COUNTRY I SEE ALOT MORE DODGE CARAVANS ON THE ROAD THEN I DO TOWN AND COUNTRYS . THAT TELLS YOU SOMETHING .
May 7th, 2014 at 12:42 pm
Kinda makes you wonder about the future of the Dodge Journey and Durango. It seems like the Journey replacement may better fit in the new Chrysler showroom. And the emphasis to eliminate “sister” vehicles suggests the new 3-row Grand Wagoneer will squeeze out the Durango as Dodge focuses on performance cars.
May 7th, 2014 at 12:46 pm
Segio’s last 5 year plan was a flop. Ferrari, Jeep and RAM Trucks have done well, but the rest of the company is doing poorly. The 300, Charger and Challenger are based on very old designs. The 200 and Dart hasn’t done as well as the 500 and that’s not saying much. Seems like this guy is going totally unchecked.
May 7th, 2014 at 12:50 pm
Nothing for nothing, but hasn’t Audi been doing covering their cars for years now? I see car haulers with covered audis all over the place. I’m pretty sure that their design is also fabric and not a wrap. So i think GM needs to change their statement about being the only manufacturer that does this.
May 7th, 2014 at 12:58 pm
@ Kit:That wrangler pickup concept has been making the rounds since 2005.Demand was immediate.Still no truck.They roll this chestnut out about every 3 years so it isn’t any kind of big deal anymore.BTW,the last rollout they had painted it yellow.
May 7th, 2014 at 1:00 pm
If they are going to call all of the vans Chrysler, they should continue to build “basic” ones, with the Voyager name, and use T and C for the loaded ones.
As Drew alludes, the Journey and Durango would be a better fit for the re-invented Chrysler brand, than the re-invented Dodge brand. There is no reason not to call them Chryslers, but who knows what they will actually do.
As far as Dodge and Chrysler “showrooms,” are there any free standing Dodge or Chrysler dealers any more? Even in very Chrysler-centric Kokomo, Indiana, Dodge, Chrysler, and Jeep are now at the same store.
May 7th, 2014 at 1:01 pm
10, Yeah, people seem to love it, so I don’t understand why they didn’t build it years ago. It would be really easy to do, given that old school body-on-frame platform.
May 7th, 2014 at 1:03 pm
12, continued. I assume the “concept” was built on the older, not-so-big Wrangler. Do you know, G.A.?
May 7th, 2014 at 1:12 pm
Nice to see Pat from Manno in Dearborn and his store in that video, truly the best place to get a suit dress clothes or any tailoring done.
May 7th, 2014 at 1:19 pm
They roll out the concept, and the market is responsive, but then the marketers recall the Comanche and have second thoughts.
May 7th, 2014 at 1:31 pm
So John, I see so much expansion of product and number or product, do you have any ideas on who will be taking the reduction in sales when all these vehicles hit the showrooms? The SAAR is increasing (some) but nowhere near as much as what new product is being promised (and not just by the Fiat Group), someone’s going to have to lose; who.
May 7th, 2014 at 1:40 pm
@ Kit: It was built on the then new JKU frame.The JK’s didn’t come out until the 07my as far as I know.When they first showed the truck,they said they needed to ‘gage’ the response to see if in fact it would sell.Thousands of jeep fans even signed petitions to get them into production,to no avail.So every 3 or so years,they bring it out just to tease.If it was available tomorrow,I would still buy the Colorado.The whole JK line still suffers from quality issues and very little is done about it.
May 7th, 2014 at 1:40 pm
15, Was the Comanche that bad, for the time? I knew someone who had one, and liked it, especially that old Rambler six.
I never see them now, but that’s not too surprising, since the last ones built would be over 20 years old, and the early one nearly 30 years old.
May 7th, 2014 at 1:44 pm
17, Thanks for the info. I suspect the Colorado will also be much more refined than a JK-based pickup would be, if they made one.
May 7th, 2014 at 3:56 pm
There are at least three pristine Jeep Comanches running around Daytona Beach.
May 7th, 2014 at 5:06 pm
As Far as I know,there will be an all new Jeep Wrangler for the 2017 my.IF Jeep really,or more to the point,ACTUALLY do make a new Jeep pickup,that will probably be when it comes out.I also think that at least the 2.8L CRD will finally be an option for the all new Wrangler then,and maybe the 3.0L V6 CRD might be an option for the 4 dr Wrangler and maybe even the pickup too,should it appear ;}>
May 7th, 2014 at 5:52 pm
Re: GM car covers. I have seen several truckloads of Corvettes while driving on the highways but had no idea that the cars could be driven with the cover on. Pretty neat.
I wonder if the covers are returned to GM for reuse?
May 7th, 2014 at 7:14 pm
#15 yes it was that bad, and the engine was part of the problem, a compact truck that got 12 MPG in the late 80′s early 90′s. Marketing disaster. For the time? Toyota, Nissan, Mazda pickups were reliable, and efficient and you still see plenty of those running around…the Ford Ranger wasn’t too bad either. The Jeep looked great, just wish it was better executed to be competitive.
May 7th, 2014 at 7:46 pm
Chrysler to Become Main Brand in North America.
Who would have thought that they would be #1 MFG in North America. Not Ford or GM?
May 7th, 2014 at 8:00 pm
Custom car covers for GM? On my way to North Carolina I saw a Kia K900 in a car cover looking like the one showed in your video. It was on a transport truck and I thought it was more about not showing the cars.
May 7th, 2014 at 8:16 pm
I agree with G.A. Jeep will do well with a JK based pick up. It will be cheap to develop, even if you added an independent front suspension. From what I understand the Comanche was canceled because it under cut the Dodge Dakota at the time of the merger, also it gave the Jeep plant more capacity for the hot selling Cherokee.
May 7th, 2014 at 8:19 pm
Just produce the thing and call it a Ram if you want.
May 7th, 2014 at 9:55 pm
23,
It would have been thirsty with the six, especially in city driving, but my friend put over 200K miles on one with few repairs. I’d heard, as C-Tech said, that Comanche was dropped partly, or largely because it competed too closely with Dakota.
May 8th, 2014 at 6:35 am
My ’88 Jeep Cherokee, with the 4L straight six (not Comanche) got 25 hwy and 15/16 mixed city; acceptable (for the time). I was somewhat reticent of the peripherals of that engine but the engine itself was a ‘tough’ piece of iron. Ran that one up north of 150,000 miles (before trade-in).
May 8th, 2014 at 8:54 pm
John,
Re: GM car covers, next time make sure both individuals can speak ENGLISH!
Regards,
Steve Ashley
May 9th, 2014 at 9:55 am
#29
I had a unique 1988 Cherokee “Metric Ton” 2-door 2WD back around 1997-2000. 2.5L four with 4-speed auto and a 4.56 Dana 44 rear end.
Loved it, but had to let it go when a confluence of circumstances left me no choice but to reluctantly trade it in for something else.
I wish I had it back.