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FCA May Pull Fiat From America, Chrysler From Everywhere Else

FCA May Pull Fiat From America, Chrysler From Everywhere Else

Fiat Chrysler Automobiles CEO Sergio Marchionne will make some bold announcements later this week. The announcements are expected to include a reshuffling of the company’s brands; Marhionne’s final hurrah before retiring from the company next year.

Confidential sources have told Bloomberg Marchionne will likely announce the constriction of the Fiat and Chrysler brands. Fiat is expected to be phased out of North America and China, while Chrysler will be reduced to just the U.S. market.

The moves would not be entirely shocking. Marchionne was quick to relaunch the Fiat brand in North America back in 2010 with the 500, but the brand has seen little sales success since launch. In 2014 the brand sold just over 46,000 vehicles in the U.S., but sales have steadily declined to just under 27,000 units last year. When Fiat was relaunched, U.S. consumers had an appetite for small cars; today the appetite has clearly shifted to utility vehicles.

Speaking of utilities, FCA is expected to announce plans to double-down on utilities, trucks and luxury vehicles. In a move designed to focus on profitability, FCA will focus its efforts on the Jeep brand with a plan to double the brand’s sales by 2022. Marchionne feels doubling the brand’s sales will also double its profit level.

Marchionne is expected to make other announcements as well, including a new captive finance unit for the U.S., similar to Ford and General Motors.

The announcement, scheduled for Friday in Italy, is expected to be the last substantial move by Marchionne aside from recommending a successor. The executive is slated to step aside from FCA in early 2019.





 

About Nick Saporito

AutoVerdict Senior Editor Nick Saporito began writing about cars at age 13. Nick ran a couple of automotive enthusiast sites for several years, before taking some time off to focus on his career and education. By day he's a marketing executive in the telecom world and by night he hangs out here at AV. You'll find him focusing on tech, design and the industry's future.
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  1. Tone
    So, from reading around, it looks like Chrysler becomes US-only and Fiat goes EU only (and, apparently EV). Sounds like Dodge/Chrysler continue to exist as long as they can mine niches with decent margins, but that's a pretty precarious position. Also sounds like the LX platform get a refresh for the next Charger/Challenger. No word on what happens to the 300 -- wouldn't be surprised to see it replaced by a luxurious CUV as that's where the big-car buyer seems to be headed and FCA has no shortage of suitable platforms for that.

    In fact, if I was running FCA, I'd take Buick's approach to CUVs (nice, near-lux in small, medium and large) and make that my Chrysler lineup + Pacifica. Minimal additional investment, used Jeep platforms and differentiate by focusing on on-road/all weather capacity, more premium design and materials.
    Andrew_L
    donmateo
    I think they over-extended. Think back to GM and Ford with too many brands, at some point there's no reason to have them all. I've never liked Marchionne or how Fiat's been run (and subsequently how Chrysler/Dodge/Jeep/Ram have been). I think this is poor planning and bad leadership coming to the surface, FCA has been struggling for some time. This is the consequence of over-extension and hubris, IMO. Hope they don't axe brands, but who knows...


    They split up brands under FCA like Ram moving to it's own brand outside of Dodge and SRT moving to it's own brand for a very short while as well. I still think Ram should have never been moved out from Dodge.
    donmateo
    Tone
    My understanding is that the issue is the market has swung heavily towards SUVs, CUVs and trucks — and FCA already has strong brands for those (Jeep and Ram).

    It’s paired down the other brands to unique offerings: a large, affordable RWD sedan in the 300 and the Pacifica minivan in Chrylser’s case. But, these are pretty much North American market vehicles that neither sell at particularly high volumes or (likely) margins. I’m guessing the business case for future generations isn’t looking too good.

    Not sure what else FCA can do. It’s prioritizing product investment where the growth is and taking away from where growth isn’t.


    I think they over-extended. Think back to GM and Ford with too many brands, at some point there's no reason to have them all. I've never liked Marchionne or how Fiat's been run (and subsequently how Chrysler/Dodge/Jeep/Ram have been). I think this is poor planning and bad leadership coming to the surface, FCA has been struggling for some time. This is the consequence of over-extension and hubris, IMO. Hope they don't axe brands, but who knows...
    Tone
    donmateo
    Fiat came here with a tiny car nobody wanted. Chrysler is here and elsewhere now with one or two models total. Seems there's a bigger issue at play


    My understanding is that the issue is the market has swung heavily towards SUVs, CUVs and trucks — and FCA already has strong brands for those (Jeep and Ram).

    It’s paired down the other brands to unique offerings: a large, affordable RWD sedan in the 300 and the Pacifica minivan in Chrylser’s case. But, these are pretty much North American market vehicles that neither sell at particularly high volumes or (likely) margins. I’m guessing the business case for future generations isn’t looking too good.

    Not sure what else FCA can do. It’s prioritizing product investment where the growth is and taking away from where growth isn’t.
    donmateo
    Fiat came here with a tiny car nobody wanted. Chrysler is here and elsewhere now with one or two models total. Seems there's a bigger issue at play
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