By on October 29, 2011

It’s becoming increasingly clear as time goes on that the Chrysler five year plan promulgated in November 2009 was merely a stopgap strategy aimed at stabilizing the then-recently-acquired firm while CEO Sergio Marchionne plotted a strategic course globally. Now, with news that Alfa is going to be re-launched with the US as its major focus (possibly replacing Dodge), we’re getting a better and better picture of where the Sergio Show is headed with his transatlantic alliance. In an interview with Automotive News Europe [sub], Marchionne gives the latest snapshot

In his vision, Alfa Romeo and Jeep both have the DNA and the rich history capable to make them the alliance’s two global brands. “We need to continue to globalize Jeep and Alfa, so the development of architectures and engines that are designed to support these two brands is crucial, and everything else becomes almost secondary,” he said.

Chrysler clearly won’t be a global brand, as its products are rebadged as Lancias in Italy. Fiat will offer full lineups in Europe and South America, but only the Fiat 500 will be a truly global brand, in a role Marchionne compares to BMW’s MINI. Dodge doesn’t even rate a mention in this interview, which can only be interpreted as more evidence that it will be lucky to survive at all.

Though the alliance’s two namesake brands, Fiat and Chrysler, won’t be used on a global basis, branding will be extremely important to the company’s future. In Marchionne’s words:

By 2014, we expect Fiat-Chrysler to reach 5.9 million units and we will have just three main architectures that drive more than 80 percent of that total volume. I have never lived through a period with this level of complexity and this level of optionality

It’s not surprising that Marchionne has chosen Alfa and Jeep to represent his cobbled-together empire globally; clearly they are the two strongest brands in what is now a somewhat bloated portfolio. But this latest development raises two fundamental questions: first, what happens to Chrysler/Lancia and Ram/Dodge, and second, can Alfa and Jeep really move 80% of their volume to three common platforms and maintain their brand integrity? Because if not, it won’t take long before Marchionne finds himself with three platforms and a whole mess of compromised, past-their-prime brands. It’s good to see that Fiat-Chrysler global strategy is beginning to take shape, but this one is clearly not without its risks.

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67 Comments on “The Fiat-Chrysler Strategy: Now Featuring Jeep And Alfa...”


  • avatar
    ciddyguy

    This is getting interesting indeed.

    This is one of the problems with going global in economy and market is that a one size fits all can’t be expected to work for every market, and yet, it can with some mods taken for individual markets where necessary, such as the US.

    That said, if Dodge doesn’t make it, I’ll be sad to see it go, but it may have lived past its prime and if it does survive, it’ll do so with the Dodge Charger and Challenger to hold down the pony car etc segment but that’s really it though as they ARE Dodge’s cache right now.

    The possibility of RAM being eliminated may well begin the road to less reliance on huge over weight, gas guzzling vehicles as Marchione isn’t dumb and is well aware that reducing pollution and reducing the US’ reliance on gas has to start somewhere but I hope he doesn’t do stuff that may turn even more people away.

    then again, this could just be another ruse to get our attention and may not be at all what he’s up to but who knows? He seems cagy like that and being part Canadian, I’m sure he’s well aware of how the US segment of N. A. works and how to ween us from our dependence on oil.

  • avatar
    Morea

    Nice Alfa Matta in the picture. I always wanted one of those.

    • 0 avatar
      BMWnut

      Thanks for putting us in the picture. I was wondering what it was.

      According to Wikipedia, 2007 of them were built for the Italian Army and civilians from 1952-1954. It had a double overhead camshaft four cylinder petrol engine. That proved too complicated for the Italian Army to maintain and they changed over to a Fiat. Has there ever been another army vehicle with such a sporty engine?

  • avatar
    Acd

    Dodge hasn’t been in the picture from the beginning–that is the reason for making Ram its own brand so they can keep producing the trucks but be able to drop the Dodge name at some point without having affecting truck sales when they do it.

  • avatar
    Les

    Wait, wait, wait-wait-wait-wait-wait…

    Am I hearing this right, that under Mariconie.. Jeep, the ‘off the showroom, onto the rock-crawl trail’ brand is going to share platorms with Alfa Romeo, the poor-man’s Ferrari?

    • 0 avatar
      Dimwit

      No, what he’s doing is aligning brands. Jeep is Chrysler’s only worldwide brand and he thinks Alfa is FIAT’s. I would’ve thought that Ferrari was the only universal brand in that stable but you may notice that the Ferrari/FIAT relationship is very much downplayed.

      Alfa will become the “Buick” brand everywhere and Jeep is Jeep. I guess Chrysler will be “Chevy” in N/A and non existent everywhere else. FIAT will be the same in the rest of the world. What it does is allow Sergio to leverage platforms from FIAT/Chrysler to anything they want. Small econoboxes to medium sedans to performance vehicles. Put swoopy sheetmetal and premium engines (hemi’s?) in them and they’re Alfas. SUV’s, 4×4′s and light duty trucks are the Jeep stable.

      Looked at it that way, you don’t need very many platforms or different parts bins if designed right. Most of Chryco’s assembly plants are modern and multiplatform already. I’ll wager any place that FIAT has invested a new plant like in S.A. is the same. There’s some good synergy between the two companies that lets him pull this off with FIAT’s small engine prowess and Italian design background and Chryco’s legendary efficient engineering ability.

      I can see GM becoming nervous by 2015.

      • 0 avatar
        Les

        Maybe, but I’m getting more and more the impression that Mariconie is either ignorant or un-caring about the offerings of the Chrysler corp brand(s) while similarly being undereducated as to how Fiat and the brands under it’s umbrella are viewed within the States. I know it’s easy to assume that because he’s head of a major global industrial concern he must be a genius or near-genius who’s already thought of everything but as the sub-prime meltdown proved it is possible to get into those rarefied upper-tiers of economic power while still having catastrophic blind-spots.

        In the US, Chrysler is the Buick (aspiring to be Cadillac), Dodge is the Chevy and Jeep is the Land Rover. He has been rather canny in positioning the 500 against the MINI and not against the Honda/Toyota/Nissan econoboxes like it does in Europe, but if as has been speculated he plans to drop Dodge and slide Alfa in it’s place it may make ‘Global’ sense but it’ll more like as not give him a bloody economic nose in America.

  • avatar
    Athos Nobile

    It’s very easy to predict the outcome

    Ram –> merged with Iveco
    Jeep, well, they can’t “merge” that one
    Chrysler/Dodge –> merged with either Fiat/Alfa

    I don’t think they will use the Lancia brand outside Europe.

    They will need a “budget” brand, so I don’t see Fiat dying.

    Alfa has a strong name and can work as “premium” brand. They have an uphill “perception gap” to beat however.

    If history is an indication, the outcome shown here http://en.wikipedia.org/wiki/Iveco can give you some hints on the road ahead.

  • avatar
    th009

    80% of Alfa and Jeep isn’t necessarily on one of the three common platforms, it’s 80% of the total volume.

    But while this sounds good, I’m somewhat skeptical. Platform strategy is not easy, and especially not easy to execute well. VW manages massive volume on its PQ25 (Polo etc), PQ35 (Golf) and PQ46 (Passat) platforms but balancing platform commonality with brand differentiation is not an easy game, and Fiat has not shown any prowess at it so far.

    And those sales forecasts. 6M cars is up 50% from the group’s 2010 sales: sure, Chrysler is up 25% this year in a recovering market, but Fiat is down 10% in Europe in 2011 and losing market share.

    Alfa might not crack 140K units this year in spite of the 300K target for the brand in 2012, and a 500K target in 2014. It has minimal sales outside of Italy, let alone outside of Europe. Its return to the US market keeps getting delayed, and model introductions keep getting pushed back.

    Marchionne was in the right place at the right time to pick up Chrysler free of charge and free of debt, but execution by Fiat is mediocre at best.

    • 0 avatar
      highdesertcat

      Marchionne knew a good deal when he saw one and getting the US taxpayers to bail out Chrysler AND bribe Fiat with $1.3B to take that carcass off their hands wasn’t just a good deal; it was a GREAT deal!

      The Obama administration made Sergio a deal he couldn’t refuse. The UAW got what they wished for. Let’s see how long the UAW will have any input as to the future of Chrysler and its products. My guess is, not long.

      The foreign-bashers should have a field day with this one since Chrysler is now foreign-owned, employing Americans in America, just like Toyota, Honda, Nissan and the rest of the foreigners. But the foreign-bashers remain deafeningly silent on this one. Why?

      For the rest of us it should come as no surprise that Sergio is doing what he and the Fiat board think is best for their shareholders. Not Chrysler, but the Fiat shareholders. Chrysler is but a small cog in a very large Italian machine.

      Even a blind man could see that once Fiat gained majority ownership of Chrysler they would set an agenda that would maximize Fiat’s interests worldwide and rebadge Chrysler products as needed to suit their market-penetration goals all over the globe.

      Given Fiat’s reputation for mediocrity worldwide I do not believe that any of the Chrysler products will be widely embraced even if rebadged under fancy Italian names. Chrysler’s market remains primarily the US and North America.

      • 0 avatar
        carbiz

        Not silent, just stunned. I’ve always had a soft spot for Chrysler. My dad was a huge Mopar fan, having owned a new ’66 300 and then a ’69. Both were absolutely gorgeous cars. Unrivalled ride and handling for their girth and era.
        However, my experience in the ’80s with an ’83 Rampage, then an ’87 Shadow ES was less than stellar. Although I appreciate that the ’80s were best forgotten by all, I was horrified when Daimler ‘merged’ with Chrysler, then sold to Cerberus, then to Fiat? EEK!
        I get that Chrysler could not survive in this hyper-global market. Neither could Fiat, with only market presence in Europe and Brazil. But you are correct: Chrysler is now ‘foreign’ owned. Being a Canadian, I fight the good fight that buying American is good for Canada, but I just remain quiet about Chrysler. They’ve contributed mightily to the North American economy over the last 80 years, but there is no denying that the patents, technology and profits are now Italian.

      • 0 avatar
        eldard

        What?! I thought spending money they don’t have on things they don’t need to impress people they don’t like was what contributed mightily to the Americans’ wealth(?) during the last 70 years?

      • 0 avatar
        highdesertcat

        carbiz, I know what you mean about having a soft spot for Chrysler. In my teen years during the sixties I earned my cookies by tearing down and building up Chrysler’s 426 Hemis that my dad and uncles used in their drag racers.

        I got to the point where I could anticipate the click of the torque wrench when torquing down the bolts of the bearing caps on the crank shaft and heads. Got real good at reassembly, too.

        My dad also owned a ’62 Chrysler 300 Convertible at that time and we all had great times in it.

        It is a shame that the US auto industry devolved to its low point where Chrysler and GM both failed and died. We have to learn to live with the fact that Chrysler is now foreign-owned and yet all the foreign-bashers choose to remain silent while at the same time bad-mouthing Toyota, Honda, Nissan et al.

        Aside from Chrysler’s modest successes in the US and North America, I do not believe that rebadging Chrysler products under Italian brand-names will suddenly increase demand for Chrysler production in the US.

        I think the UAW is lucky to get what they got when Fiat decided to take Chrysler in. Without that, and the tax payer bail outs, they’d be unemployed. At least Fiat keeps them working, just like Toyota, Honda, Nissan, et al, keep other Americans working. Nothing wrong with that!

      • 0 avatar
        Flipper35

        Chrysler has been foreign owned since 98.

  • avatar
    Neb

    Well, that whole ‘hiving off of Ram as a separate brand’ now makes sense.

    The strategy makes sense if the idea of branding is used in a commonsense sorta way. IE “branding is just the very long term received message sent by the product”. Jeep is “tough off road trucks.” Alfa I frankly don’t know outside of Top Gear being a North American, but “Italian passion – Italian reliability” seems in the ballpark. Anyway, if Alfa and Jeep sell their range of vehicles sticking in these messages, it’ll be fine. If, on the other hand, it tries to sell a full range of cars and just kinda mashes them into those molds, I don’t think it will work. Those sorta models can be sold by the lesser nameplates, if you really want to play.

    Chrysler and Lancia are dead, though. Apparently so is Dodge in the long term, though in North America anyway the brand still has meaning.

  • avatar
    Mellow

    Next up – the Fiat Obama. Hood scoops, racing stripes, but no engine, it just uses the unused power of Chrysler Hemis from previous years, until it runs out from lack of fuel. Then we ride bicycles, or walk.

  • avatar
    eldard

    Just don’t use Crapsler engines for the glorious Quattroporte, please!

    • 0 avatar
      Robert Schwartz

      Dang. I wanted one with a Hemi.

      • 0 avatar
        Les

        As much as I’d love to see resources put into re-designing the Hemi to be a True Hemi and re-capture the glory days when a ‘Hemi’ was something most covetous for more than just a badge and empty bragging-rights, I doubt we’ll see anything of the sort of Sergio decides engine development should follow the European model.

        In Europe the preference is for engines designed to Scream and Leap at the redline the instant your foot meets the floormat and be held there hissing and spitting under the heel of your boot, because that’s where the power is.

        In America the preference is for engines that let out a deep bowl-rattling rumble when you poke it in the angry-pedal and go chugging-off for Days in the low rev-range, because that’s where the power is.

      • 0 avatar
        aspade

        Europe prefers tiny high revving engines in the same way they prefer drab black plastic interiors – they settle for them because welfare state taxes and eco-dork activists preclude anything nicer.

        At the price is no object end of the market, Benz proved they want big displacement V8s (or better yet V12s) just like we do.

      • 0 avatar
        Les

        @Aspade:

        Actually, no, they don’t like big engines like we do.

        In Europe they like big engines that are designed to rev at over 9,000! RPM and that shove all their power into that range because it reminds them of F1 cars.

        In America we like big engines that don’t have as much wiggle-room between idle and the redline but that’s okay because they produce acres of torque in the lower rev-range.

        Europe = Screaming Sports-Cars.

        America = Rumbling Muscle-Cars.

  • avatar
    Conslaw

    I predict the Alfa brand will tank in the US. If they kill the Dodge brand, they will be sorry. There aren’t a couple hundred thousand Americans every year who really want to buy an Italian car. I predict the 500 will peak at around 50k units/year and all other Fiats/Alfas won’t hit 50k combined.

    “Alfas were built to be the best cars in the world … briefly.” – Jeremy Clarkson

    • 0 avatar
      Les

      People like to think Economics is all science and maths, it’s not; it’s also psychology, sociology, Irrational instinct and just plain dumb luck. If Dodge gets dropped for Alfa, how many buyers who were loyal to the Dodge brand thick-and-thin or potential buyers who were waiting for Chrysler to ‘finally get it right’ will become poisoned against any and all Fiat-Chrysler products after Dodge gets the axe?

      In the US the only people who would even recognize ‘Alfa Romeo’ as a car make if you asked them on the streets are..

      A) People who are old enough to have remember when Alfa was last on US soil, and all the problems they had.

      B) Adinoid-flapping super car-bores.

      C) People who watch Top Gear.

      So we have a percentage of Americans who think Alfas are uselessly fragile crap, who think Alfas are something ‘Exotic’ and not an everyman’s ride, and people who haven’t got clue one about this new brand with the fancy coat-of-arms badge. Not the best recipe for a Dodge-replacement.

    • 0 avatar
      Dynasty

      I saw a 500 in the wild last week. It looked actually a lot better in person than in print. “I” wouldn’t buy one, but I could see lots of young cute girls driving them if the price is right. And I have no idea where their price is at on them.

      • 0 avatar

        I have just returned from a trip to Canada and had arranged for a sub-compact rental (since I am very cheap). To my surprise, I was handed the keys to a white Fiat 500 Sport. My impressions: the car (my example had 20,000 kms on it) seems quite well-constructed. The front seats are very comfortable and visibility is very good, except when changing lanes to the left and the massive B-pillar gets in the way. The auto box was okay and there were a lot of thoughtful little features. For example, if you are driving in rain and your windshield wipers are going, when you put the car into reverse, the rear wiper automatically starts. The 1.4 litre engine is sufficient but I was driving alone most of the time and I think heavier loads will tax the engine. My fuel economy was not all that impressive for a car this size, particularly when compared to cars like the VW Polo here in Germany. Several people asked me about the car (a new experience for me for a rental), including the guys at the Ford dealership where I test drove a new V6 Mustang.

      • 0 avatar
        Wheeljack

        Sprocketboy, my 1988 (yes, ’88) Merkur Scorpio has that same thoughtful little feature where the rear wiper comes on in reverse if the front wipers are on, so everything old is new again.

        It also has a clever (if somewhat complex) feature where the elctric fuel door release will not activate unless the car is in park, the engine is off and the doors are unlocked. Keeps you from accidentally opening the fuel door while zipping down the road.

  • avatar
    Robert Schwartz

    I hate the stand alone Ram. Even if they aren’t going to sell Dodge passenger cars, and they had lost the thread years ago, they should sell the trucks as Dodge Ram. I also think there is room for a non-premium mini-van as a Dodge Caravan.

    • 0 avatar
      Dynasty

      Stand alone Ram is lame. They should maintain the Dodge brand if even just for the trucks, Charger, and Challenger.

      Then let Ferrari massage the Hemi.

      • 0 avatar
        Les

        The stand-alone Ram idea smells off to me to.

        The stated reason is, “To create seperation and minimize confusion between our commercial and consumer products.” This either means Sergio is an idiot about the market he’s trying to penetrate (This is America, Pickup-Trucks ARE consumer-products here.) or it’s just marketing doublespeak to hide shenanigans behind.

        Edit: *looks up?* Of all the comments I’ve made so far, why is this one awaiting moderation? o.O

        Editor comment: It was in moderation because you used “idiot.” The bad word filter doesn’t like “idiot.” Without the idiot, I wouldn’t have to do the idiotic work ….

      • 0 avatar
        Les

        Of all the words I could understand tripping-up ‘bad language filters’, that has to have been one of the most mind-bogglingly mild ones I’ve ever heard of that would trigger one. O.o

      • 0 avatar

        “This is America, Pickup-Trucks ARE consumer-products here.”

        What with CAFE standards being the way they are, and the way automakers are trying to replace small and midsize trucks with vans (e.g. Ranger gets replaced with Transit Connect) I get the impression the automakers are trying to change this.

        Pickup trucks have always been used by some for small tasks in the U.S., but the ubiquity of them today is a temporary thing. I have a feeling that, as regulations become more stringent across the board, automakers are going to strongly begin pushing consumers away from trucks, limiting their usage to primarily commercial use, and start trying to talk consumers into the idea of the small car as premium, high-quality transportation.

      • 0 avatar
        Les

        @Luigiian:

        To use a colloquialism from around where I’m from, “That dog don’t hunt.”

        Out here in the sticks a pickup-truck, something sturdy and mechanically simple with an open bed and lashings of torque is the go-to for pretty-much Everybody. The only thing keeping more pickup-trucks from being on the roads here is the small (Truely small, not the modern mid-size evolution/bloat of same) trucks market has evaporated as well as the Mini-SUV market, high-margin Ubernaught trucks and SUVs are the norm and that keeps people from getting the cheep and cheerful little pickups they want and making-do with midget station-wagons.

        To get off on a bit of a political jag, this is exactly the sort of thing that breeds the kind of seething resentment among the more rural-dominated parts of the country against ‘federal’ authority. The idea that because the sensibilities of effete snobs in LA or New York are important enough to quash the range of vehicles people outside those rarefied regions of culture and affluence require for their unique blend of utility and serviceability is what feeds into the frothing madness that is the TEA Party.

      • 0 avatar

        Les:

        There will always be people who use commercial vehicles as commuters because they need a big vehicle that can do work but also need something to get back and forth from place to place.

        What I’m saying is that everyone else is going to be talked more and more into Fiats and Smarts.

        And, yeah, the compact truck thing drives me nuts. I’ve been talking about compact trucks since I think 2004 if I remember correctly, but due to financial constraints not only have I not been able to buy one, but apparently the automakers seem less and less likely to listen to the segment’s fans (due to the general state of the economy and the future of the segment).

        (Although there is the point that the dreadnought-class superpickups are here instead of compacts because they’re desired more – my friends have consistently pestered me to either buy a fullsize or buy a 4×4 compact, because four cylinder 2wd compact trucks are “pieces of s*it”. Nevermind that all I need it for is to carry bulky stuff that wouldn’t fit in the back of a wagon.)

      • 0 avatar
        Les

        @Luigi

        I need a pickup to help futz about maintaining the property (several hundred acres of pastureland) and work the family herd, and I’m deeply resentful that CAFE regulators think my needs can be serviced perfectly adequately by a Van.

        OOOH! The small pickup thing burns me up something fierce to, same thing happened to SUVs. The tastes of the semi-affluent urbanite is and has been towards Big, Beefy vehicles with big beefy engines and the secure feeling of having miles of steel surrounding you in all directions. Washington, which truly means well.. well and truly they do.. wants everyone that doesn’t absolutely need a vehicle with enough torque to pull-down the moon to start driving eco-boxes that won’t raep the environment or raep the oncoming family of five when you weave into the oncoming lane while gabbing about Brangala’s lovely new child over myface or twitbook or what have you.

        And so, they write regulations penalizing the purchase of big, beefy cars. So they go and buy big beefy SUVs, a LOT of them, enough to make the manufacturers want to chase this new market and listen to them when they complain about harsh rides, unrefined interiors and lack of elbow room in hard-charging 4x4s… so they make them bigger, softer, more luxurious and more Un-suited for their original purpose, and drop the now much less profitable by comparison Mini-SUVs. Then Washington realizes the things that kept them up at night are getting worse and start putting the screws to SUVs.

        So, the semi-affluent urbanites start buying Pickups, and complaining about the harsh ride and blah-blah-blah.. etc…

  • avatar
    Pch101

    My take on this is quite different. This is largely about the fate of the FIAT brand in the US market.

    I suspect that Marchionne had been toying with making a push with the FIAT brand in the US and Canada, which would make Fiat its mainstream brand in Europe, Latin America and North America. Dodge was being positioned for the possibility of being marginalized or possibly eliminated — the profitable trucks were carved out, and Dodge itself was being referred to as a new “performance brand”, i.e. a brand without too many cars.

    The 500 must be something of a disappointment, as it would appear that this plan to turn FIAT into an American household name is being shelved. The Dodge badge is going to survive as an entry-level mainstream car brand, after all, while FIAT will be limited in the US to being a direct competitor to MINI.

    With this, Alfa is slated to become FIAT’s answer to BMW. Fairly high margin, moderate volume cars that won’t dominate unit sales but that are expected to create a lot of the profit margin. This is quite risky — a plan that takes on BMW, Mercedes and Lexus head-on could really flop — but it may be one of his better options.

    A few Jeeps are going to be exported from the US. Big deal.

    Now that the branding conundrum has been resolved, the challenge is going to be to figure out how to design a few platforms that can serve as the basis for most of what carries a Fiat, Chrysler, Dodge, Alfa, or Lancia badge. The role model would seem to be VW; since world cars aren’t in the equation, R&D synergies are going to have to suffice.

    can Alfa and Jeep really move 80% of their volume to three common platforms

    The quote from Automotive News doesn’t say this. It says that three platforms would be used to sell 80% of the company’s product. It didn’t say that those platforms would be exclusive to two brands or that Alfa and Jeep would comprise 80% of the company’s total sales.

    • 0 avatar
      kowsnofskia

      What surprises me is that Fiat et al would be at all surprised that the 500 wasn’t a hot seller. How often has a tiny car done well here? Did Marchionne really think the 500 would be an exception to this?

      If the rest of the cars in the Fiat lineup aren’t complete garbage, I suspect they would sell. A look at the sales charts indicates that a realignment away from the dominance of the Japanese in the compact and midsize markets is in progress. People are willing to take a look at unusual brands and if Fiat brings something else to the table they could likely carve out a niche for themselves.

      • 0 avatar
        Pch101

        What surprises me is that Fiat et al would be at all surprised that the 500 wasn’t a hot seller.

        I doubt that he had expectations for the 500 to ever be a high-volume car. I think that he saw it more as a beachhead that could be used to build the Fiat brand, which would then allow the company to sell other Fiats in the US, aside from the 500.

        I think that he has figured out that it would be easier to improve Dodge’s reputation than it would be to create a reputation for Fiat. Unfortunately, this is a more costly proposition because it would theoretically be cheaper to sell Fiats to everyone than it would be to sell Fiats to some people and Dodges to others.

        Selling Dodges carries the baggage of selling cars that retain some of Dodges’ heritage, which likely precludes them from selling very many Dodge-badged Fiats. That means making a unique car or two for Americans, which means higher costs. And since Dodge is a mainstream brand, those cars won’t generate much margin, which increases the likelihood that they will be money losers.

        A company with a balance sheet like Fiat-Chrysler has no choice but to be cost conscious, so it would be very tempting to design Fiat world cars and try to sell them here. But it would be better to make cars that Americans buy than cars that they don’t, so he doesn’t have much choice but to build US-oriented cars for US buyers.

    • 0 avatar
      mjz

      Pch101: Totally agree with your take on this, if Marchionne wanted FIAT/Alfa Romeo to be the high volume brands here in the U.S, he would never have set up a new, boutique dealer network to sell FIATS and Alfas, he would have just sold them through the current Chrysler/Dodge/Jeep/RAM dealer group. The article says that Jeep and Alfa will be the only BRANDS sold globally, that doesn’t mean they are going to eliminate all their other brands, like Dodge or Chrysler, it just means that those brands will be used on a regional basis, not globally.

  • avatar
    Mr Nosy

    Well,unlike GM & VW,FIATSLER doesn’t have the market share,or the money, to provide what amounts to regional boutique brands spun off the same platform (A la Opel/Vauxhall,or SEAT/Skoda.).This is America,land of COSTCO & WAl*MART.Personally,I think Lancia could have been dumped just as easily,with Chrysler re-emerging as a European presence in its place.However,I’d be foolish to argue marketing with a black pullover sweater wearer.Dodge will now simply be an SRT,or a RAM.Even before FIAT,Chrysler always seemed the most half-assed when it came to branding-they could’ve merged Dodge&Plymouth(Plodge Omni or 024,anyone?)a long time ago,as the only thing differentiating them stylistically was the name tag.GM & Ford at least switched up grilles & dashboards(Usually.).As for Alfa-Romeo,if VW can dig up Audi,foist off the 100LS ,followed by the misaligned brake pedal 5000 death mobile,rise again with a stretched,tarted up Jetta christened the A4 to then go on to become one of automedia’s choicest poonanny magnets(All car publications should really factor this”Poonnanny Effect” into their reviews.). All the while still remaining an instant wallet drainer at 4yrs/50K miles.I’ll bet you a black sweater an an iSomething that it’s not beyond Alfa-Romeo’s grasp to hit that magic 4yr/50K mile quality benchmark.

    • 0 avatar
      th009

      @Nosy, the A4 was never on the same platform as the Jetta — it’s always used an Audi-unique platform with a longitudinal engine.

      The A3 does share its (transverse-engined) platform with the Golf and Jetta, though.

    • 0 avatar
      outback_ute

      Replacing Lancia with Chrysler in Europe makes as much sense as replacing Dodge with Alfa in the US, ie very little. On the other hand, taking Dodge globally could be a more difficult task than re-introducing Alfa to the US as will have been even longer since Dodge was sold in those markets.

      I don’t think it is a really difficult proposition at least when dealing with the North American and European markets – going into China or other areas is where they need to be a bit more careful. Different brands have meaning in different markets and they are lucky they have brands that complement each other in a lot of ways.

      Chrysler & Lancia – both have a history of luxury and innovation, both have been driven downmarket or marginalised to an extent in more recent times. The current badge engineering strategy and keeping the brands in their own market is sound I think, although it would be preferable to have some sheetmetal & interior tweaks to get away from pure badge engineering. Lancia can go smaller (B segment) than I would take Chrysler but that is reflective of both history and the difference between the two markets, I would also use these brands for the luxurious people movers/minivans. These brands would also be the flagships for hybrid and/or electric vehicles.

      Alfa Romeo & Dodge – again each has strengths in different markets. Keep Dodge for large performance-oriented sedans, pony/muscle cars & crossover/SUV’s, Alfa for small & midsize performance-oriented sedans/hatchbacks and sports coupes. No overlap necessary, they could perhaps meet in the (rwd!) D segment with different body styles eg Dodge as a sedan and Alfa as an Audi A5 Sportback hatch and coupe. Instead of Dodge a large performance-oriented sedan in Europe could be a Lancia HF variant. Also reverse the ridiculous Ram spin-off, and potentially sell Fiat commercial vans & a small pickup as Dodge in the US – I am thinking of a 1980′s small pickup size that could do well internationally (as a Fiat in markets you don’t take Dodge) now that the global pickups have grown in size.

      Fiat – small-midsize cars & minvans globally, commercial vehicles in Europe & anywhere else the Dodge brand has no meaning (wherever fullsize pickups do not sell), also share smaller crossovers with Dodge in different markets.

      Jeep – no surprise here – offroad-oriented SUV’s, I agree Jeep is a truly global brand.

      The thing is I don’t believe that you don’t need to cover each segment with every brand – assuming all dealers are free to take all brands that is. The first phase would be to concentrate on one vehicle per segment/sub-segment then try different variants/brands should things go well.

      There is one potential gap, for the US market if there was the concern of only having mainstream Fiats, luxury Chryslers & sporty Alfas in the C segment – ie no mainstream US brand – I would reintroduce Plymouth to mirror Fiat rather than dilute the Dodge brand. Plymouth could also be used for a rental/fleet version of the D or E segment sedan should they feel the need to increase platform volume by playing in a low-margin area, again to protect the other brands.

  • avatar
    Lampredi

    Just remember that Sergio’s plans keep changing every five minutes or so (in fact, they’ve probably been superseded by new plans as we speak).

    Never mind what his plans du jour say, what we’re guaranteed to see is in fact chronic underinvestment in new models.

  • avatar
    Zackman

    What, exactly, is that Jeep-ish/Land Rover-ish thing at the top?

  • avatar
    getacargetacheck

    Forget it. Alfa Romeo will never be a global volume brand. Fiat doesn’t have the money to make it happen. Fiat would do well to gradually build up the Fiat brand in NA with mainstream offerings much like VW is doing now with the Passat and Jetta. In other words, new C and D class sedans and CUVs should be built in the US and badged as Fiats along with their commercial vans. Everything else besides Jeep that has a NA-centered appeal should be badged as Dodges (300, Ram, Grand Caravan, Charger, Challenger, Viper, Durango). Naturally, Fiat should be added to Chrysler Jeep Dodge dealers as well.

    But no matter the branding, Marchionne’s success with Chrysler will hinge on the midsized sedan and crossover to be released in 2014. I have my doubts because it seems Fiat is doing the same thing Daimler did with the Sebring/Avenger: take a compact platform (Mitsubishi Lancer) and stretch it. A stretched Fiat compact will have a hard time bettering Camry, Accord, Malibu, Fusion, Sonata, etc.

    • 0 avatar
      eldard

      I also doubt if Fiat has the money to subsidize fire extinguishers to give away for every car they sell. lolz

    • 0 avatar
      Pch101

      Alfa Romeo will never be a global volume brand.

      The goal is probably margin, not volume. “Global” means that the brand is offered in all of Fiat’s markets, not that it will be the dominant brand for volume sales.

      Fiat doesn’t have the money to make it happen.

      A company with Fiat’s limited resources would be better off focusing on creating a few margin generators than a variety of higher volume, low-profit vehicles.

      Marchionne has limited options. This isn’t ideal, but this is probably one of the better ones, given what he has to start with. It seems that he has accepted that the US is a different animal — world cars rarely work here, and those that do usually appeal to near-luxury buyers, not to price shoppers — so making a big push for Fiat as the company’s dominant US brand doesn’t make much sense.

      But his odds of failure are still high. However, the odds of failing with a volume-oriented approach would be even greater.

  • avatar
    gjk0726

    poor old chrysler,its been sold and passed around like some sort
    of whore,with some group always trying to fix it and make it a success. in about 5 more years,fiat will be looking for a way to
    dump it. just like diamler did after 7 years. as long as there are baby boomers around in the united states,the fiat name will be looked down on. Mr M really needs to look into the way chrysler is internally ran and fix those problems first.too many models,too many
    versions of different models,repair parts availability,big lag times
    on parts delivery to repair customers cars,quality of vehicles,and no customer service after the sale,the attitude of corporate and the dealer networks of ” just get the pretty new ones over the curb and we will worry about about the rest of customer service later”. if none of this is fixed it can be re badged with the name “failure”. about 5 more years and it will be ready to dumped again.

    • 0 avatar
      eldard

      If Fiat was a woman, she’d be an Italian (duh!). Ravishing, absolutely beautiful but you wouldn’t want to be with her after just a few encounters. If Chrysler was a woman, she’d be a plain jane prostitute that no one would want to hire.

    • 0 avatar
      orthorim

      Brand perceptions can be changed. Fiat needs to realize this and pull a Hyundai – make great quality cars and back them up with long warranties. If they make their standard Fiat non-quality cars they’ll go down in flames. Remember that Hyundai once had an even worse reputation than Fiat.

  • avatar
    orthorim

    Interesting and a gutsy move. Of course its risky – but what would be the “safe” option? There is none.

    At the end of the day the brands are less important than the cars that they make. If they make good cars for good prices, they’ll succeed no matter if theyre called Dodge, Alfa, or Jeep. Hyundai and Kia have demonstrated that quite clearly. Make great cars for good prices – succeed. Make crap cars – fail.

    Personally I am excited to see a design heavyweight such as Alfa enter the US market. Alfas are gorgeous.

    • 0 avatar
      Les

      There is a problem with relying on making good cars to lead you to success, all the other good cars out there.

      The big three used to make good cars, then they let slip. More recently Toyota and Honda made good cars, but are in the process of slipping. Hyundai/Kia saw this and saw an opportunity to jump to the head of the pack by focusing on quality to a degree that their major global competitors had started to let slip.

      Chevrolet and Ford would like to make us believe they’ve learned their lesson and are trying to bring quality back, and they have enough brand Cache that many potential buyers would like to believe them. If Mariconne kills the Dodge brand in order to make room for Alfa Romeo he’ll be faced with a market that would have loved a ‘Renaissance Dodge’ now going, “Why shouldn’t I just buy a Hyundai instead?”

  • avatar

    Lte’s go back into TTAC history and see how “correct” Edward has been with his guessing of what is going to happen. If this were baseball he would be nowhere near the playoffs.

    Stop with the retarded speculations. This site is not called “The Specualtion About Cars”…

  • avatar
    mjz

    If Chrysler was going to eliminate Dodge and make Alfa the “volume” brand instead, they would NEVER have set up an independent FIAT/Alfa dealer network here in the United States. Alfa will be positioned as an Italian “BMW” competitor, much like the FIAT 500 is positioned against MINI. Dodge will be the lower priced, high volume brand here in North America, like FIAT is in Italy, possible sharing models with FIAT (i.e; Journey/Freemont, and possibly upcoming Caliber replacement). Chrysler and Lancia will be positioned slightly upmarket, and share models, (300/Thema, 200/Flavia, Town & Country/Voyager). Marchionne is savvy enough to know that neither FIAT nor Alfa will be high volume sellers in the United States, but he does recognise that he can successfully sell them in limited numbers. I think the prediction that the Dodge brand will be eliminated is pure speculation, as they would not be planning to market the new Caliber replacement C-segment sedan as a Dodge if this were the case.

    • 0 avatar
      th009

      How will Alfa be successful against BMW (and Mercedes, Lexus and Audi) in the US when they have been wholly unsuccessful at that in Europe (outside Italy)?

      • 0 avatar
        mjz

        The same way that the FIAT 500 has been successful against the MINI. Lots of charisma for less $$$’s. Alfa Romeo is a storied brand that still has lots of cache and potential here in the U.S. BMW’s are ever increasingly bigger and more bloated, with sticker prices to match. There is plenty of room for a brand positioned with BMW’s old marketing mantra “Ultimate Driving Machine”. Alfa could fill that void perfectly. Who cares about Europe? Mercedes are used as taxi cabs there, so what? Hasn’t diminished their luxury status here at all.

      • 0 avatar
        Pch101

        How will Alfa be successful against BMW (and Mercedes, Lexus and Audi) in the US when they have been wholly unsuccessful at that in Europe (outside Italy)?

        It would be difficult, certainly. The market is already crowded as is, with brands that are much better established.

        The cars themselves would have to have universal appeal with the near-luxury buying pool, but while retaining some core elements that make them unique enough to make the brand distinctive (ala the 3 series). That effort would have to be balanced with a platform sharing program that allows them to develop the cars on a budget (since their funds are so limited) but that avoids excessive badge engineering.

        Marchionne doesn’t have a lot of tools in his toolkit. With this stable of brands, he’s starting with a disadvantage, and may very well fail. But he doesn’t really have much choice. On the surface, this sounds like the best plan available to him, even if it isn’t a great one.

      • 0 avatar
        eldard

        The 500 is simply the current It pseudo luxury compact car. Before that there was smart. I give it a few years before the latte sipping, credit card maxing, deluded Apple crowd moves on to the next one.

      • 0 avatar
        eldard

        And why bother with Alfa? Why not position Maserati against the Germans?

  • avatar
    Zackman

    The more I read about Chrysler’s comings and goings, I also believe it’s just a matter of time before it disappears altogether. Italian cars in the U.S. making a big splash? I don’t believe it will ever happen. Of course I’ve been known to be wrong once in a while. Trouble is, there are simply too many auto brands and models and too few buyers out there.

  • avatar
    mjz

    eldard: Maserati IS being positioned against the Germans, Maserati is to compete against Porsche.


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