Marchionne: No Money In Small Diesel Cars

by Cameron Aubernon

Published: April 8th, 2014

marchionne no money in small diesel cars

Bucking a trend that has been gathering steam beyond its traditional European stronghold, FCA head Sergio Marchionne said that FCA’s upcoming product plan, due to be revealed in May, would be light on diesel engines for B and C-segment cars.

Automotive News reports that Marchionne sees no money in placing a clean diesel powertrain into a compact car if it would prevent the compact offering from being “economically viable”:

You can do this on a larger vehicle because of the costs associated with those vehicles. It’s much more difficult to join with a car like [the Chrysler 200 sedan] and keep the margins above normal. Other manufacturers are making the cars. The question of whether they’re making money is a question you should ask them specifically.

FCA has V8 diesels under the hoods of Ram’s heavy-duty pickups, and V6 oil-burners in the Ram 1500 and Jeep Grand Cherokee. But in Europe, diesels are prominent in Fiat and Alfa Romeo vehicles, particularly in countries where the fuel is subsidized (and gasoline prices are rather high). It would be difficult to imagine these smaller diesels going away entirely, but the oil-burning powertrains will certainly not make it to North America.

#CompactCars #Diesels #FiatChryslerAutomobiles #MidsizeCars #SergioMarchionne

Cameron Aubernon

Seattle-based writer, blogger, and photographer for many a publication. Born in Louisville. Raised in Kansas. Where I lay my head is home.

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Stingray65 on Apr 08, 2014

There is no free lunch. If regulation and the market demand high fuel economy, low emissions, and good performance there is technology to provide it, but it is expensive to buy and maintain and it may reduce the economic life of a vehicle giving back at least some of the environmental benefits through more frequent car replacement. Hybrids use extra batteries and electric motors and exotic gearing systems that add cost and potentially expensive repairs. Clean diesels use turbos, direct injection, DPF, DMF that also add expenses. Now gasoline engines are increasingly using turbos, direct injection, and DMF that add expense and potentially shorten life. All these clean vehicles also require cleaner fuels that are more expensive to produce, which further reduce the economic benefits of the new technology. Cheap, clean, fast - you can have any two, but not all three.

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- FormerFF on Apr 08, 2014
  
  I wouldn't call the CVT that's in most hybrid cars an exotic item. It's basically a planetary gearset with three inputs: a drive (electric) motor, a motor generator, and the engine. These cars do have the additional motor, generator, inverter, and batteries, but they do away with the starter, alternator, torque converter, and pump that a conventional car with auto trans would have. Honda has gone one step further in eliminating the CVT on the Accord plug in. It does have a clutch, though.
  
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- Stingray65 on Apr 08, 2014
  
  @FormerFF CVT's were until recently at least been considered pretty exotic. I also don't think Toyota, GM, etc. would have needed to spend over $1 billion to develop hybrid technology if it was not somewhat complicated. Whether you believe it is simple technology or not, however, I think it would be difficult to argue that these new technologies are more expensive than the simpler previous versions.
  
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- Hummer on Apr 08, 2014
  
  Cheap and fast, the emissions is what moved consumers in 1/2tons and is what will move them into 3/4s as 1/2s descend the same road as cars. Chevy double cab, standard bed, w/ 4x4 '14 1500 w/ 5.3 & 3.08 rear end = 35,770 before cash back '15 2500 w/ 6.0 & 4.10 rear end = 37540 I made as similar as it would allow, both are the most base 4x4 you can get, but I added the small v8 to the 1500 to make a better comparison. The V8 adds only $1100 so even lacking the V8, the 2500 is a only slightly more with stronger components and a proven engine w/o all the fuel economy mess.
  
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- Charly on Apr 09, 2014
  
  @stingray65 You are talking about developing costs, not production costs.
  
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Danio3834 on Apr 08, 2014

I like it when Marchionne makes an honest attempt to explain why certain things are the way they are. The small diesel pickup brigade may still refute him, but he tried to put it in as simple blunt terms as possible.

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- Highdesertcat on Apr 08, 2014
  
  Yup, I agree! In the end it has to make economic sense to the well-being of the company, in this case Fiat, to offer a product to the buying public. They're not in business to be benevolent and lose money for their owners/shareholders. They're in business for profit and to make money for their owners/shareholders. And the vast majority of the buying public does not see a small diesel in their future. I've had one diesel passenger car and I don't want to go there again. The extra mpg do not offset the additional cost of the diesel fuel, and the added cost of the maintenance, nor the smell, the soot and the crud that builds up on these oil burners. However, as a proponent of choice and "The more the merrier", I think small diesels should be offered for those who want to buy them, if the automaker can find a way to just break even on each sale. And that! may be the problem. In the US it is unlikely that small diesels will make money for the manufacturer since the vast majority of buyers go for the gusto, the gasoline-fired ICE.
  
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- Charly on Apr 09, 2014
  
  @highdesertcat Fiat sounds a bit like a Luddite company, probably because they don't have money to develop the new technology.
  
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Asdf on Apr 08, 2014

"FCA head Sergio Marchionne said that FCA’s upcoming product plan, due to be revealed in May, would be light on diesel engines for B and C-segment cars." That makes perfect sense, because in order to put diesel engines in B and C segment cars, one needs to *make* B and C segment cars. ;)

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Big Al from Oz on Apr 10, 2014

Ford did a study in 2004 and came to the same finding, hence the Eco Boost engines. Ford's finding was that the initial outlay for a vehicle with a gasoline engine made it an easier item to market. Ford did recognise that diesel was the better option over the longer term. I wouldn't write diesel off yet. As vehicles increase in size the viability of diesel becomes more apparent. How many have a diesel whipper snipper (weed eater) or chainsaw?

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