Fiat Chrysler Automobiles CEO Sergio Marchionne on Wednesday said the automaker would rely more heavily on profitable Jeeps and Rams in North America and Europe to help its business remain profitable in other sagging areas and regions.
“We are not of the view that this industry is facing an impending demise,” Marchionne said before announcing FCA’s adjusted earnings of $1.78 billion in the fourth quarter.
Marchionne and CFO Richard Palmer said Jeep’s success in North America and Europe led the company last year and would be the “bedrock” for the automaker’s future. The automaker laid out specific plans to bring forward a Jeep pickup and Wagoneer, and let wither less-profitable models such as the Chrysler 200 and Dodge Dart.
Marchionne said the compact cars would “run their course,” and the automaker would look for future partnerships with others to build the compact cars.
Earlier in the conference, the FCA CEO compared the next few years of the automaker’s future to wandering through the desert, but said that FCA has grown considerably since its ambitious 2014 plan.
“When I look back at the last two years I feel comfortable that we’ve created an organization that has a much more durable and dependable capital structure,” Marchionne said.
Part of that has included spinning of luxury brand Ferrari and boosting Jeep production worldwide. But Marchionne laid out the company’s missteps too: Alfa Romeo’s ambitious rollout has been scaled back significantly, Maserati’s scope has been narrowed, and the company will refocus on Europe and North America as profit drivers, not Latin America and China.
The Alfa Romeo Giulia sedan won’t go into production until March and Alfa’s first SUV won’t arrive until 2017, according to the automaker. The rest of the Alfa Romeo lineup: a full-size sedan, two crossovers, two “specialty” cars and a hatchback won’t arrive until 2020 — two years later than planned.
Luxury arm Maserati will get a much-needed SUV — the Levante — later this year, the automaker said, but wild expectations for the brand have dampened considerably due to slowing economic conditions in China.
“We have readjusted all of our plans,” Marchionne told investors. He said his forecast in 2014 of 7 million cars by 2018 doesn’t matter anymore — the automaker won’t be driven by volume.
“We’re going to stay away from enunciating goals as they relate to metrics,” Marchionne said.
Instead, Marchionne said Jeep would contribute significantly to the group’s overall bottom line, and new offerings such as a Wrangler-based pickup and large SUV would drive future profits.
The CEO also said that production would be realigned at other plants to accommodate the automaker’s shift in strategy away from passenger cars and toward more profitable SUVs and trucks.
Despite pegging sales on trucks and SUVs — which Palmer said was a permanent shift for the industry — Marchionne projected that sales in North America and Europe would be relatively flat, and that the industry reached “top-ish” volume over the last year.
FCA also included plans that signal a shift toward more electrification: a mild Ram 1500 pickup is planned around 2018, and a mild Jeep Wrangler Hybrid before a full-hybrid Wrangler by around 2022. It’s unclear where diesel powertrains fit into the mix — despite planning for a diesel-powered next-generation Wrangler, the executives were quiet about Ram’s current diesel powertrain.