By on January 26, 2016

Jeep-Renegade-19

On Wednesday, Fiat Chrysler Automobiles CEO Sergio Marchionne will update investors on his long-term plans and fourth-quarter profits — namely, how many Jeeps it sold — during his scheduled earnings conference call.

It’s widely expected that Sergio will address the near-certainty that Jeep will build a pickup based on the Wrangler, as well as the future for the Jeep Compass that’ll likely survive from the Patriot/Compass twin billing, and Jeep’s potential to keep afloat fledgling FCA brands such as Maserati and Alfa Romeo.

Analysts say FCA’s ambitious target of $5 billion profit by 2018 would be almost unattainable at this point.

“‘Ambitious’ is not really an adequate word to describe it, ‘fantasyland’ might be more appropriate,” Bernstein’s Max Warburton told Automotive News.

Automotive News correctly points out FCA’s missteps in BRIC territories that could haunt them. (Although not having a manufacturing presence in Russia could have saved them enormous cash for the time being.)

Profits in Latin American countries are way, way down, according to the Wall Street Journal, and FCA’s belated big bet on Brazil with Jeep and luxury cars could compound their headache to catch up to Ford and General Motors in the region. FCA’s operating profit in Brazil fell by 83 percent over the last two years, according to WSJ.

More than 95 percent of FCA’s sales in Brazil were from its Fiat brand, including compact and subcompact models that comprise nearly 60 percent of new car sales in Brazil. The Jeep Renegade was built specifically with emerging markets in mind — including Brazil-only powertrains — and has been slow to catch on.

“Selling the Renegade in Brazil presumes the middle class will grow and will ask for different cars than the small ones that dominate now,” Monica Bosio, an analyst with Intesa Sanpaolo, told WSJ. “It’s not a given that will happen.”

Only last year Jeep returned to China to build cars, starting with the Cherokee.

Those fledgling attempts in growing markets could increase pressure on FCA to maximize profits Stateside, which has been fairly limited to Jeep so far.

Although Marchionne ruled out a possible merger with General Motors — or any other similarly sized automaker — last year, analysts still say that FCA would need to court an alliance with another manufacturer to remain viable or sustain any type of global economic downturn.

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27 Comments on “Jeep Pickup, Jeep Compass and Jeep Renegade: All The Things We’ll Probably Hear Tomorrow from Sergio...”


  • avatar
    Corollaman

    Sergio, perhaps you can explain to the investors how you plan to raise FCA from the bottom of the reliability ratings that have permeated the brand since you took over. We were lead to believe that FIAT’s poor reliability and quality issues were a thing of the past.

    • 0 avatar
      Kenn

      “We were lead to believe that FIAT’s poor reliability and quality issues were a thing of the past.”

      He might say those issues and ratings are simply “a matter of perception” that needs to be updated. I remember a former Chrysler CEO who used that reply to deflect questions about continually poor quality ratings.

      • 0 avatar
        Corollaman

        Well, except that both CR and JD Power show the same data, the only happy here is Land Rover, who always used to be dead last, year after year, now it’s FIAT at the bottom. And all these new FCA vehicles are based off FIAT and Alfa platforms.

    • 0 avatar
      thelaine

      Extended warranty a must

    • 0 avatar
      White Shadow

      Apparently not many people who buy Jeeps care about reliability ratings. I’m one of them–I own a 2015 Grand Cherokee and its a pile of crap, but I still love the thing. My main gripe is the 8-speed transmission. When it works properly, its a joy to drive. Well, at least as much of a joy to drive as is possible for a fat pig of an SUV. But seriously, the thing hasnt stranded me yet, so I can’t complain too much.

      I came from two generations of 4Runner before the Jeep. Both 4Runners were practically trouble free for the combined 16 years I owned them. I just couldn’t stomach the looks of the 5th generation 4Runner and the lack of tech, so I jumped ship to a much higher tech, good-looking Jeep with crappy reliability. And guess what? I’d do it all over again. Poor reliability ratings these days are still pretty darn good overall.

      • 0 avatar
        Mandalorian

        The problem isn’t the SRT/Hellcat/Hemi and even Pentastar stuff, the problem is that everything they have with a 4-cyl engine in it sucks the big one.

        • 0 avatar
          spreadsheet monkey

          is the 1.4T engine really so bad?

          • 0 avatar
            heavy handle

            According to a senior FCA tech I know, the 1.4T is actually quite good, with no major issues.
            They did have driveability issues with the original automated-manual transmission in the Dart and 500L, and they continue to have usability issues with Microsoft entertainment systems.
            He recommends them, even though he’s more of a RAM/Cummins guy.

          • 0 avatar
            iNeon

            It doesn’t seem so bad!

            This last weekend I picked up a little Aero Dart with the 1.4t/manual and it’s a nice little thing!

            Bias is heavy- I came out of a PT Cruiser and before that had a neon sport coupe.

            The 1.4t seems sprightly and makes very mechanical noises. It gets good mileage– the computer says 30mpg in my South Florida commuting

    • 0 avatar

      TrueDelta isn’t showing anything too dramatic.

  • avatar
    eggsalad

    Is there really enough hair to split to make a CUV between the Renegade and the Cherokee? I can’t see it.

    I figured the only reason the Compass/Patriot twins lasted this long was to get rid of all the parts.

    • 0 avatar
      seanx37

      They were dirt cheap. Lots of them went off the lots for $129 a month. OR less. Awful cars. But cheap.

      • 0 avatar
        PrincipalDan

        Super popular here in my little impoverished state, unfortunately too many of them are of the FWD base 150 hp variety. We have terrible dirt roads with deep mud and poor maintenance but everyone is driving around the reservation with the non-4wd non-center locking differential variety. Dang shame.

      • 0 avatar
        VoGo

        I would think Robert Kraft would pay FCA a lot of money to kill the Patriot and stop sullying our football team’s good name.

        • 0 avatar
          28-Cars-Later

          Unless it started cheating on an emissions test, I fail to see how it sullies the name of Mr. Kraft’s organization.

          • 0 avatar

            Comment of the day.

          • 0 avatar
            VoGo

            Ouch! The wound is still raw after Sunday’s debacle.

            Also, the Wells Report is a scam. http://www.nytimes.com/2016/01/23/sports/football/nfl-ignores-ball-deflation-science-at-new-england-patriots-expense.html?ref=football

          • 0 avatar
            28-Cars-Later

            I actually didn’t see the game but just the highlights and score told me it wasn’t an easy pill to swallow for the faithful. Then again as much as I have the talented offense to thank for getting me to the FF championship, I lost because of the lackluster performance against the Jets in Week 16 so I’m m’eh on the organization (and I started Brady, White, Gostkowski, had Bolden (sat him) and drafted Edleman till he was out). I was lobbing f-bombs though this season on the KC and Seattle organizations. Apox on them both.

        • 0 avatar
          Skink

          Your football team has been sullying the term ‘patriot’.

  • avatar
    RHD

    Oh, the irony: FCA might have actually managed to reach 5 billion in profit if they hadn’t quietly stuffed so much cash in dealers’ pockets so they would report higher sales figures… and tomorrow we’ll see how pretty the gilded, bought-and-paid-for statistics are.

  • avatar
    PrincipalDan

    Seeing a Renegade on a wood floor makes me laugh.

    Compass Trailhawk :) although of those two names PATRIOT is too good to let lapse.

  • avatar
    seanx37

    “Sergio Marchionne will update investors on his long-term plans and fourth-quarter profits ”

    There were 4th quarter profits? Really?

  • avatar
    gamesdr

    Aaron, there is no waiting to “address the near-certainty” on Jeep’s Pickup – Sergio already solidly confirmed the new 2018 Wrangler-based pickup in front of video cameras at Detroit (the video is on YouTube). He also said the upcoming new Wrangler is the best thing they have ever done.

    To be fair, during that Journalists Q&A he was actually very unscripted but revealed Jeep is breaking sales records all over the place (including a record 135% increase for 2015 in Latin America). I don’t understand why WSJ is so focused on the Jeep brand rather than, say, why Fiat is continue to struggle in North America which is a bigger problem no?

    • 0 avatar
      heavy handle

      “why Fiat is continue to struggle in North America which is a bigger problem no?”

      Not so much in industrial terms. Fiat is selling hand-me-downs in the US, so the development cost is minimal. They will never be “big” here, because they don’t sell big cars. They would need to offer something at least as big as a CR-V or Accord to start moving a lot of cars, but they won’t. Right now, Fiat US is what Dodge Colts used to be: a cheap, convenient way to cover the sub-compact market. I think they’ve succeeded, at least with the original 500. They attract import buyers, and they up-sell them with profitable options. I rarely see a base 500 (steel-wheeled, no chrome), but I see a lot of “Sport” and “Lounge” models.

  • avatar
    SCE to AUX

    I’ll pay attention if he says they’re killing off the ZF 9-speed automatic.

  • avatar
    Big Al from Oz

    Jeep has increased sales in the global market. But, how far can FCA reach with Jeep?

    Jeep is not a revered product outside of the main Allies of WWII. Jeep is only a huge name in the US. It is known outside of the US, but I think FCA will pushing sh!t up hill to have Jeep become a huge success.

    Brazil highlights this with it’s Jeep sales.

    The best bet for Jeep is to produce an even longer wheelbase version of the 4 door Wrangler with the VM 2.8 and sell it as a single an dual cab pickup/cab chassis out side of NA.

    I do believe even here in Australia Jeep would sell a significant number of live axled extra long wheelbase Wrangler utes.

    Other than the 70 Series Landcruisers, live axle off road vehicles are becoming quite rare.

    Jeep must also undercut it’s opposition in pricing to move the Jeep pickups. In Australia even the Grand Cherokee is a “cheap” SUV offering compared to it’s competition.

    Jeep also needs to work on it’s hit and miss quality/reliability.

  • avatar
    Omnifan

    Poor quality/reliability is the first thing folks forget when the vehicle is in a hot market segment and gas is $1.26/gallon. Now, can someone explain where all the old Hummers were hiding when gas was $4. they seem to crawling out of the woodwork now.


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