The Truth About Cars » Fiat. Chrysler http://www.thetruthaboutcars.com The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. Fri, 12 Sep 2014 16:56:11 +0000 en-US hourly 1 http://wordpress.org/?v=3.9.2 The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars no The Truth About Cars editors@ttac.com editors@ttac.com (The Truth About Cars) 2006-2009 The Truth About Cars The Truth About Cars is dedicated to providing candid, unbiased automobile reviews and the latest in auto industry news. The Truth About Cars » Fiat. Chrysler http://www.thetruthaboutcars.com/wp-content/themes/ttac-theme/images/logo.gif http://www.thetruthaboutcars.com Capsule Review: 2014 Jeep Wrangler Sport S http://www.thetruthaboutcars.com/2014/07/capsule-review-2014-jeep-wrangler-sport-s/ http://www.thetruthaboutcars.com/2014/07/capsule-review-2014-jeep-wrangler-sport-s/#comments Fri, 18 Jul 2014 12:30:27 +0000 http://www.thetruthaboutcars.com/?p=868346   A common complaint among the Best & Brightest is that certain consumer oriented publications don’t get the Jeep Wrangler. America’s sports car, as Enzo Ferrari once labeled it, is unfairly docked for performing poorly on-road, without taking into account that its mission is to excel off-road. Even though I’ve driven off-road precisely twice in my life, […]

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A common complaint among the Best & Brightest is that certain consumer oriented publications don’t get the Jeep Wrangler. America’s sports car, as Enzo Ferrari once labeled it, is unfairly docked for performing poorly on-road, without taking into account that its mission is to excel off-roadEven though I’ve driven off-road precisely twice in my life, I decided to get to the heart of the matter.

Most press vehicles are fully-loaded, top trim examples with abnormally high sticker prices and all the bells and whistles that one can possibly order. Not this baby.

2014-Jeep-Wrangler-Sport-Interior

The Wrangler Sport seen here has – get ready for it – manual locks, crank windows, no touch screen and an honest-to-god manual transmission. In any other car, this level of equipment would bear the odious stench of poverty and poor credit. In a Jeep, it’s somewhat charming. The UConnect 130 is an old-school head unit unlike the rest of the range, with knobs and buttons replacing touch screens and QNX software. There’s an auxiliary port and a hidden USB port – you’re better off using the former if you want to play your music off of an iPod.

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As refreshing as it may be to see an honest Wrangler on paved roads, rather than a top-spec Mickey Thompson-shod Unlimited Rubicon, there’s still the unavoidable fact that no Wrangler is particularly pleasant to drive on the street. It’s simply not made for it, in the same way that a McLaren 650S, with its carbon fiber bodywork, shouldn’t be driven on a dirt road pockmarked with rocks and divots.

2014-Jeep-Wrangler-Sport-Badge

Unfortunately, the majority of our infrastructure does consist of paved roads, and depending on their condition, the Wrangler’s ride quality ranges from “oscillating” to “back of the school bus”, in terms of how severely it crashes and bounds over bumps, ripples and potholes.

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Is it my own damn fault that I’m driving the Wrangler in an environment that is totally unsuitable for the car? Yes, but, I’d venture to say that the majority of these vehicles are driven in urban and suburban areas, and buyers hardly seem to care – or they put up with the Wrangler’s dynamic drawbacks because of its aesthetic appeal and rugged image.

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That’s not to say it’s all negative: with its small footprint and ultra-high driving position, you get a good view of the road, even if the Wrangler isn’t the most nimble-footed beast. Parking is a cinch relative to a lot of other SUVs, and the rear can be used for either human or material cargo in a pinch – but not necessarily both. That distinctive shape may give it tough-guy “Defender-lite” looks, but it also has the aerodynamics of a garden shed, and fuel economy in town was dismal, around 15 mpg.

The sole glaring drawback is with the removable soft top, which is needlessly complex to operate and poorly explained in the instruction manual. I will cop to being a bit dense when it comes to manual tasks that require pattern recognition, and the multiple latches, zippers, tabs and closures required to raise and lower the roof are my own idea of hell. Perhaps I was under the mistaken impression that should one get caught in a rain storm, one could simply pull over by the side of the road, hop out and raise the top, like you can in a Miata. I was wrong, and my passenger and I got a 55 mph baptismal thanks to my ineptitude. At the very least, Jeep should look into a new technical writer for their owner’s manual.

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Despite the myriad flaws and unsuitability for my own driving conditions, I kept coming back to the Wrangler with an overriding sense of affection. Car enthusiasts talk about the purity of the XJ Cherokee and the Mazda Miata as if they are two sides of the same enthusiast vehicle proposition, and always seem to skip over the one that started it all. But here we have an honest-to-god basic vehicle, made in America, for $25,295 (if you don’t need A/C, a base model sport is just $22,395) that has charm and authenticity in spades. The Wrangler is not for everyone – and certainly not for me. But Jeep manages to sell every example they make, and consumers seem utterly unaffected by these negative reports.

 

 

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FCA Is Hungry For Diesels http://www.thetruthaboutcars.com/2014/07/fca-is-hungry-for-diesels/ http://www.thetruthaboutcars.com/2014/07/fca-is-hungry-for-diesels/#comments Mon, 07 Jul 2014 15:22:44 +0000 http://www.thetruthaboutcars.com/?p=860921   Fiat Chrysler is hungry for more 3.0L VM Motori V6 diesel engines, but capacity constraints are limiting how many engines can be allocated for North America. VM Motori, a subsidiary of FCA, can build about 100,000 V6 diesel engines, with about half of those destined for North America. The V6 is offered in both […]

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2014-Ram-1500-diese-logo-450x337Fiat Chrysler is hungry for more 3.0L VM Motori V6 diesel engines, but capacity constraints are limiting how many engines can be allocated for North America.

VM Motori, a subsidiary of FCA, can build about 100,000 V6 diesel engines, with about half of those destined for North America. The V6 is offered in both the Ram 1500 pickup as well as the Jeep Grand Cherokee.

But a report in Automotive News paints an interesting picture of the demand for the V6 in each vehicle. The take rate for diesel Grand Cherokees has leveled off at about 8 percent, or 15,000 units annually.

By contrast, Ram boss Reid Bigland claims that

“We got well in excess of 10,000 orders in just the first few days that we opened this thing up, and that ordering and demand has really sustained itself,”

According to Bigland, the EcoDiesel Ram 1500s spend an average of 13 days on dealer lots, versus 94 days for gasoline versions. A search of Cars.com shows just 1,839 EcoDiesel Rams, but 3,907 Grand Cherokees, suggesting that the Ram (which sells in much bigger numbers) has a much tighter supply of their oil-burners.

Even so, Manley and Bigland denied that they are horse trading over diesel allocation for their respective brands.

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Dispatches Do Brasil: FCA’s Plans For Latin America http://www.thetruthaboutcars.com/2014/05/dispatches-do-brasil-fcas-plans-for-latin-america/ http://www.thetruthaboutcars.com/2014/05/dispatches-do-brasil-fcas-plans-for-latin-america/#comments Fri, 09 May 2014 16:40:23 +0000 http://www.thetruthaboutcars.com/?p=818626 After all was said and done and the dust settled on FCA’s presentation of future plans to investors a couple of days ago, many of us were still left wondering – what does FCA really have in store for Brazil? We all know what the “F” in FCA stands for and there’s a reason why […]

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FiatBrazil

After all was said and done and the dust settled on FCA’s presentation of future plans to investors a couple of days ago, many of us were still left wondering – what does FCA really have in store for Brazil? We all know what the “F” in FCA stands for and there’s a reason why it comes before the “C”. Part of that is the success Fiat has enjoyed in Brazil – which was heavily emphasized in the Fiat brand presentation. Brazil is a good indicator for Fiat’s plans in the Latin American market, and the rest of the globe.

This year, Fiat is doing well, even though Brazil is in a down market this year (Fiat is down about 5 percent). 2013 saw Fiat sell 785,000 cars – impressive given that its domestic production capacity is 800,000 units. Fiat will add another 400,000 units of capacity over the next few years, betting heavily on Brazil as a major engine of growth.

So what did FCA CEO Sergio Marchionne say about Brazil? No new nothing for brasileiros until 2016, when the new factory will kick off production of the new “City” car directly aimed at Volkswagen’s up!. More than likely, it will sport a 900cc two-cylinder engine that can add forced induction, producing 70 to 130 hp while keeping consumption (and emissions) to a minimum.

Besides that, baby Jeeps and Jeeps labeled as Fiat products will also come out of that new factory (4 new models, initially).These new CUVs will sit directly in the meat of the fastest growing segment in the world. Aside from giving Fiat more product, it’s an important step for the internationalization of the Jeep brand.

At the old factory in Betim, Minas Gerais, Fiat will phase out the venerable 178 series of cars, while the new Palio and Grand Siena line will sit on top a version of the platform underpinning the current Brazilian Punto. The new Uno that sits on the 326 platform, an evolution of the old 178, will move up to hybridized version of  326, and the Punto’s platform. The Strada pickup will survive, but its final form is unknown.

As the new European Punto will sit on the same platform as the future 500, Fiat Brazil is at a loss as to what to do with the Linea and Idea. That means that the Punto is, as we say in Portuguese, subiu no telhado (about to jump of the roof). The Viaggio and Ottimo (Fiat’s version of the Dart) also have unclear futures in Brazil. Both were supposed to arrive, but they have been delayed indefinitely.

Part of the reason is that, Fiat Brazil is now a smaller player in the global FCA realm, and must now compete with Chrysler for money. The slowdown of Fiat’s factory expansions in Brazil is evidence of this. However, the contracting car market does help Fiat. As they are operating at among the highest capacities in Brazil, the no launch of new cars is, at the moment, a welcome and lucky break. The current models are very competitive and are doing well in the market. Any new cars might just push the limits of Fiat’s capacity in South America too far.

The Uno, which is the cheapest car in Brazil has just got some “awesome” decorative fluff-ware, enough to keep interest, in the media and public, and keep the old factory chugging along until 2016. Then,Fiat will be ready for action and hungry to get the 1 million plus sales they need down here in order to prove signore Marchionne is right, and that FCA not only has a future, but a bright one at that

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Marchionne: Mid-Size Trucks A Non-Starter http://www.thetruthaboutcars.com/2014/05/marchionne-mid-size-trucks-a-non-starter/ http://www.thetruthaboutcars.com/2014/05/marchionne-mid-size-trucks-a-non-starter/#comments Fri, 09 May 2014 15:19:04 +0000 http://www.thetruthaboutcars.com/?p=818594 At this week’s FCA investors conference, the floor was opened up to a Q&A session for journalists and equity research analysts. One scribe asked FCA CEO Sergio Marchionne about the prospect of a mid-size pickup, and Marchionne’s answer confirmed what many of us already knew. According to Automotive News, Marchionne stated that “We’ve gone through this […]

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Fiat-Strada-Adventure-Aggressive-and-a-Spirit-of-Offroad

At this week’s FCA investors conference, the floor was opened up to a Q&A session for journalists and equity research analysts. One scribe asked FCA CEO Sergio Marchionne about the prospect of a mid-size pickup, and Marchionne’s answer confirmed what many of us already knew.

According to Automotive News, Marchionne stated that

“We’ve gone through this issue now for five years, and we can’t flip the frame right.”

Autoblog has Marchionne sounding a bit more optimistic

“I think there is room for a Ram 1000…We’ve tried this … we’ve actually taken it to clinics…response has been lukewarm.”

Not long ago, sources told TTAC that a small truck, based on a front-drive car architecture, was being considered. But those plans now appear to be off the table.

 

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Analysis: The Definitive Guide To The Fiat Chrysler 5-Year Plan http://www.thetruthaboutcars.com/2014/05/analysis-the-definitive-guide-to-the-fiat-chrysler-5-year-plan/ http://www.thetruthaboutcars.com/2014/05/analysis-the-definitive-guide-to-the-fiat-chrysler-5-year-plan/#comments Tue, 06 May 2014 22:34:32 +0000 http://www.thetruthaboutcars.com/?p=816249 Wednesday marks the 16th anniversary of the Daimler-Chrysler merger. One day prior to this milestone, Fiat Chrysler has unveiled their business plan for the next 5 years. While the industry norm is to keep future product plans, brand strategies and sales targets as a closely guarded secret, FCA took the unusual step of making it […]

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Wednesday marks the 16th anniversary of the Daimler-Chrysler merger. One day prior to this milestone, Fiat Chrysler has unveiled their business plan for the next 5 years. While the industry norm is to keep future product plans, brand strategies and sales targets as a closely guarded secret, FCA took the unusual step of making it all public, with FCA CEO Sergio Marchionne headlining the event (billed as a conference for investors) at an event in Auburn Hills, Michigan. Each of FCA’s brands and subsidiaries was given the chance to present their strategy through 2018, with healthy helpings of new vehicles, future technology and corporate strategy being revealed.

ChryslerCurrently, the Chrysler brand is arguably the weakest in FCA’s portfolio, with just three offerings – the D-segment Chrysler 200, the E-segment Chrysler 300 and the Town and Country minivan. Combined, those account for just 350,000 units globally, a tiny number in the context of a 16 or 17 million unit market in the United States alone. As part of its growth plan, Chrysler will shift away from being a pseudo-premium brand to a mainstream line, aiming to compete with brands like Ford, Hyundai, Chevrolet, Toyota and Honda. The brand will add a new compact sedan, and two new crossovers, as well as hybrid capability on the larger CUV and the Town & Country minivan. Chrysler is aiming to increase sales to 800,000 units globally by 2018, equal to its best years ever in America, in the middle of the last decade – but Chrysler will be relying on stronger global sales to reach this number.

  • The Chrysler 100 sedan will debut in 2016, ostensibly as a sister car to the Dodge Dart. While details were not revealed, we can expect both the 1.4L Turbo 4-cylinder engine, as well as the 2.4L 4-cylinder paired to a 9-speed automatic. Although the latter combination was promised for the Dart long ago, it has failed to materialize. The Dart is scheduled for a 2016 refresh, and the 2.4L/9-speed could appear at that time.
  • The Chrysler 300 will receive a refresh later this year, while the 200 will get one in 2017.
  • A larger crossover, sized to compete with the Toyota Highlander and Chevrolet Traverse, launches in 2017. This will likely share a platform with the Chrysler Town & Country minivan, due to its footprint and its plug-in hybrid capability.
  • A mid-size crossover, comparable to the Hyundai Santa Fe or Ford Edge, bows in 2018. This will likely share the CUSW underpinnings of the Chrysler 200 and Jeep Cherokee.
  • The Chrysler Town & Country will be the sole minivan in FCA’s portfolio, bowing in 2016. It will be available as a plug-in hybrid to help meet regulatory requirements for ZEVs.

Dodge: In the “internal turf war” for mainstream volume offerings, Dodge is the clear loser. The upshot for enthusiasts is that Dodge will transition to being a more emotional and performance oriented brand, while still retaining its price point as a mainstream value brand. As part of Chrysler’s consolidation and push for “brand purity”, the Grand Caravan and Avenger will disappear, with the former departing in 2016. Dodge sales are expected to stay flat, with 600,000 units targeted in 2018 – Dodge sold roughly 596,000 units in 2013, and is expected to see lower volumes in the intermittent years.

  • A new B-segment Dodge will debut in 2018, offering both sedan and hatchback bodystyles, as well as undisclosed turbocharged engines. Previous rumors have suggested that a small Dodge would carry the Hornet name.
  • The Dart will soldier on until 2016, with FCA planning to market the car with aggressive leases and better content. 2016 will bring cosmetic changes as well as improvements to the driving dynamics and powertrains. A Dart SRT, with a high-performance turbocharged engine and all-wheel drive, will bow at the end of 2016.
  • A replacement for the Dodge Journey – including an SRT version – will bow in mid-2016.
  • All-new versions of the Dodge Charger and Challenger will bow in 2018 (alongside a new Chrysler 300), with SRT versions arriving at the end of 2018.
  • The Dodge Durango will continue through 2018, though it may disappear to make room for a three-row Jeep Grand Wagoneer.
  • The SRT Viper will become a Dodge again, and carry on through 2018.

FerrariFCA CEO Sergio Marchionne presented Ferrari’s outline, which was light on product plans. Ferrari will cap production at 7,000 units per year, introducing one new model every year. There are provisions to increase capacity to 10,000 units annually, and each model will be on a four year cycle, with updated variants (think 458 Speciale) launched as well. While Marchionne stressed that “Ferrari is not for sale”.

With a volume of 10,000 units, EBITDA (earnings before interest, taxes, depreciation and amortization) is estimated to be around $1 billion for Ferrari alone, thanks to its three custom car lines (which presumably generates huge margins) and the extremely lucrative revenue stream built into the brand – its merchandising and licensing business. Ferrari licenses its brand to everything from laptops to athletic apparel to model cars, and these are frequently sold as luxury goods. By comparison, Marchionne noted that conventional luxury good companies are often valued at 9x-12x EBITDA – and his presentation made explicit mention of Ferrari’s target of 15 percent gross margin, and an apparent valuation of between 3.3 and 5.4 billion euros.

FiatFiat’s presentation was the most confusing, with the brand eschewing the unidirectional approach taken by the other marques in FCA’s portfolio. A more apt-description is that Fiat is the exact opposite of “One Ford”, with the brand offering distinct product for NAFTA, Latin America, Europe and Asia.

  • Fiat will dump the Suzuki SX4-based Sedici (replaced by the Fiat 500L) and the C-segment Fiat Bravo (replaced by the Fiat 500/Panda).
  • Future product will straddle the line between functional, mainstream transportation with a “cool” bent (mostly in Europe and other developed world markets) and a novel, European brand (NAFTA). This dichotomy was presented in the form of the Fiat 124 and 124 Sport (a family car and a sports car) and the smaller Uno being sold alongside the dramatic, performance oriented Fiat Coupe of the mid-1990s.
  • In Brazil and Latin America, Fiat will shed many of its legacy nameplates, including the Palio, Siena and Linea. They will be replaced with a new A-segment car, a new Uno, a Punto/Palio replacement, a new Grand Siena, a new compact CUV and a new pickup, as well as the Strada small pickup.
  • Fiat will bring the Renegade-based 500X crossover to North America, as well as a “Speciality” product, presumed to be a Fiat/Abarth branded sports car, based off the next Mazda MX-5.

JeepJeep is one of FCA’s profit centers, and the SUV brand will undergo a major re-orientation from a NAFTA-centric maker of rough-and-ready SUVs to a global brand composed of both crossovers and traditional off-road vehicles. Jeep will transofrm from a brand of 800,000 American-made vehicles to one with manufacturing facilities in the USA, Brazil, India, China and the EU, with sales projections of 1.9 million units globally. Jeep will gain 9 new plants in 5 new countries .

  • Jeep will introduce a new replacement for the Compass and Patriot in 2016, consolidated under one nameplate.
  • The Grand Wagoneer will return in 2018 as a three-row vehicle, potentially replacing the Dodge Durango.
  • A new Wrangler and Grand Cherokee will bow in 2017.

MaseratiAlong with Alfa Romeo, Maserati will be positioned as a premium performance brand, with new product offerings. Although the Levante SUV is still on, more details were released about the Alfieri Coupe and Convertible. Maserati is aiming to increase sales from 15,000 to 75,000 units.

  • The Alfieri will offer turbocharged V6 (410, 450 and 520 horsepower), and all-wheel drive. Rear drive will be available only on the lower output V6 model.
  • The Levante will offer 350 and 425 horsepower V6 engines and a 560 horsepower V8 as well as a range of diesels.

Alfa Romeo: After nearly a decade of broken promises, we have yet another Alfa Romeo product plant that is being presented as the savoir of this once hallowed brand. Alfa Romeo’s narrative has always been grander than its financial success, but things are particularly dismal, with sales below 200,000 units and a lineup of just two small, front-drive hatchbacks and a low volume sports car.

As part of Alfa’s latest revival attempt, the brand has been transformed into what it dubs a “skunk works”, akin to what Chrysler wanted to do with SRT – create an independent workshop that is conducive to experimentation and creativity, free from bureaucracy and rigid corporate processes. Alfa’s top bosses are two Ferrari engineers, with a staff of 200 hand-picked individuals, which FCA hopes to expand to 600 by 2015.

  • Alfa is aiming to launch 8 new products by 2018, with a range of 4 and 6-cylinder gasoline and diesel engines. Alfas will be exclusively rear or all-wheel drive.
  • The first new vehicle, a mid-size sedan, will bow in 2015. From there, a full-size sedan, two CUVs and a new “speciality” car will debut by 2018.
  • The Mito and Giulietta compacts will die.
  • FCA is aiming for 400,000 units by 2018, including 150,000 units in the United States.

RamAs one of FCA’s other big profit centers, Ram is a key brand for the company, but exists largely in the NAFTA region. The half-ton trucks will see a refresh in 2015, along with a redesign in 2017, with heavy-duty trucks getting freshened in alternate years. Aluminum will likely not be a part of the new trucks, as Ram feels that the diesel half-ton truck is competitive against Ford’s aluminum RAM, and has been downplaying the durability and cost-effectiveness of the aluminum F-150. On the commercial vehicle front, a small Ram ProMaster City, based on the Fiat Doblo, bows this year.

Powertrains and Architectures:

While auto makers like Volkswagen, Toyota and Nissan are moving to radical solutions for platform consolidation, FCA’s plan showed little evidence of any move to substantially combine existing product architectures. Currently, FCA has 18 vehicle architectures, with the top 4 platforms accounting for just under half of total volume, 12 architectures representing 95 percent of volume. By 2018, this number will shrink to just 15 architectures, with the top for accounting for 70 percent of volume, and 9 architectures accounting for 95 percent of volume.

Proportionally, this is not much of a reduction, and it lags far behind Volkswagen’s strategy of just 4 modular “kits”. FCA also lacks the level of scale and volume that VW has, which would make it easier to absorb the costs and inefficiencies that come with having so many different architectures. FCA discussed its goals of bringing down costs via better purchasing practices, more shared components (like lighting, HVAC systems and interior pieces), but their plan for increasing efficiencies via shared architectures was markedly less sophisticated than much of the competition. Given the importance of achieving significant economies of scale in the future (a topic that Sergio Marchionne frequently expounds on), it was surprising to see FCA unveil a plan that is already behind the times relative to the larger OEMs that it must compete with.

On the powertrain front, FCA is downplaying the importance of fuel cell and EV powertrains, introducing EVs for regulatory compliance in the USA. Plug-in hybrids will trickle into the lineup in future, as will mild-hybrid technology like start-stop systems and Belt Starter Generators. FCA dismissed fuel cells as a non-viable alternative, and said that CNG and diesel will play a role in world markets more than in NAFTA. FCA will continue to buy emissions credits in the interim.

FinanceWhile much of the presentation material was focused on global issues, two things stood out.

  • FCA will continue to use Santander as its captive arm, and will not start a new one.
  • The overall tone regarding subprime financing was bullish, with executives dismissive suggestions of any systemic issues.

Sales and Global Markets: Separate presentations were conducted for Asia, Latin America, Europe and NAFTA regions.

  • In the NAFTA region, FCA sold 2.1 million units in 2013, and is projecting a steady increase in the U.S. SAAR, rising to 17 million units by 2018.  By that time, FCA is looking to sell another 1 million units in the NAFTA zone and increase exports by 33 percent to 380,000 units. However, no capacity increases were discussed for NAFTA, and Marchionne commented on his distaste for two-tier wages in the UAW, suggesting that profit sharing was an option in the future. Difficulties negotiating with organized labor could spell trouble for FCA’s plans.
  • In Europe, FCA has seen sales decline by over half since 2010, while capacity utilization has declined from over 100 percent to around 67 percent – a dangerously low level for a volume auto maker. Fiat’s home market of Italy was among the hardest hit, and Europe’s 13.8 million vehicle market in 2013 is at its lowest levels since 2007. FCA now has to reposition Fiat not just as an Italian mainstream brand, but one that fits the current paradigm where “cool” budget brands like Dacia and premium brands like Audi are stealing market share with their offerings that encroach on the turf of volume vehicles. Higher margin brands like Jeep, Alfa Romeo and certain Fiat products (like the 500) are their weapons of choice, as FCA aims for an increase from 1.1 million in 2013 to 1.5 million units by 2018.
  • In Latin America, FCA is well established in Brazil and Argentina, with multiple assembly plants in the two countries running at over 100 percent capacity. FCA expects the market to grow from 5.9 million units this year to 6.9 million units in 2018, with most of that growth coming from Brazil, a country where Fiat is the closest thing to a national brand. Jeep is also expected to be a strong player, with Brazilian production of the Renegade expected to start in 2015. FCA is planning to increase sales from 900,000 units this year to 1.3 million units in 2018. Fiat is expected to account for 1.1 million units, Jeep for 200,000 units and other brands making up the remainder.
  • Asia, India, Australia and other Pacific markets are also being given increasing attention by FCA, with China remaining the dominant market at 28 million units. FCA expects India to overtake Japan as its second largest market by 2018, with 5 million units annually. While FCA projects an increase from 200,000 units in 2013 to 1.1 million units by 2018, on the back of strong sales of Jeep crossovers in India and China, as well as a wide new range of Fiat product. The only question is – how will they pay for all this new product?

Conclusion:

FCA’s day-long meeting was an anomaly in the industry, providing car enthusiasts with a detailed look at future product offerings, and intense discussions of FCA’s various brands and their respective visions. No other OEM is so candid with their upcoming debuts, and FCA deserves praise for setting a positive example for other OEMs.

But dig a little deeper, and many important questions remain answered.

  • FCA CEO Sergio Marchionne is one of the biggest advocates for the necessity of economics of scale via increasing volumes, yet his plan for reducing the number of architectures looks amateur compared to the extremely aggressive plans laid out by archrival Volkswagen. While VWs global volume was 9.7 million units in 2013, it is paring down its architectures to just 4. Meanwhile, FCA, which sold 1.5 million units globally in 2013, will have 15 architectures and volumes of 5.7 million units worldwide. Compared to VW, Nissan, Toyota and even General Motors (which has a sophisticated set of architectures for its global products), FCA’s strategy seems bloated, if not obsolete, from Day 1.
  • FCA is all-in on the internal combustion engine, and is only just dipping its toe into the water of plug-in vehicles, with a plug-in hybrid. EVs are solely produced to appease regulators, and fuel cell vehicles are not in the cards. Even long-time advocates of the internal combustion engine have some kind of ZEV program (such as Hyundai, which has a fuel-cell program). This is a risky gambit, with significant upside and downside potential. Many EV programs aren’t going as well as OEMs had hoped, but FCA could be left in the dust in terms of R&D.
  •  FCA is dangerously reliant on both Jeep and RAM for their profits. A 2008-like combination of spiking gas prices and a downturn in the economy (especially housing starts, which are a key driver of pickup sales) could leave FCA exposed to both falling demand for gas-guzzling trucks and have a severe impact on the high numbers of FCA vehicles financed via subprime rates. These less credit-worthy borrowers would likely be the first to default on their payments, and a mass repossession of FCA vehicles could be another blow at an inopportune time.
  • There has been no mention of how the substantial increase in NAFTA sales will come without any additional NAFTA capacity (something Sergio Marchionne has previously sworn off). Jeeps imported from Italy and Brazil (and even China) could be an option, but booming sales of Ram trucks couldn’t be built anywhere else. Marchionne’s comments about his distaste for two-tier wages could also spell trouble for his hourly workforce when it’s time to negotiate their contracts in 2016.
  • Who is financing all of the(mostly Fiat) new product earmarked for Asia? And why all this talk of Ferrari’s value if the company is not for sale?
  • Is Alfa really going to sell 150,000 units (volumes comparable to Audi) in America? Even the most dewey-eyed Alfa diehards in the industry find that to be a bit of a stretch.

Marchionne and FCA have been known to say one thing and then completely change direction, miss deadlines and dodge questions about missing deliverables (the 9-speed Dart is the automotive world’s Jimmy Hoffa). But they’ve also presented an admirable turnaround for a once-ailing car maker, even when the rest of the world was prepared to write them off. Yes, one may argue that Marchionne and Fiat bought Chrysler’s assets for a song, and that the road has at times been rocky. But a decade ago, plans for Jeep’s global expansion, Ram’s possible conquest of GM trucks and a thriving line of Chrysler and Dodge products would have been the stuff of only the most zealous Mopar fan. It’s now a very real possibility.

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FCA Unveils 5-Year Plan On Tuesday http://www.thetruthaboutcars.com/2014/05/fca-unveils-5-year-plan-on-tuesday/ http://www.thetruthaboutcars.com/2014/05/fca-unveils-5-year-plan-on-tuesday/#comments Mon, 05 May 2014 15:22:29 +0000 http://www.thetruthaboutcars.com/?p=815570   Today is Cinco de Mayo, a Mexican holiday used as an excuse by Americans to drink margaritas and eat bad Tex-Mex. But tomorrow, Fiat Chrysler will unveil their next five-year plan, which should clarify the many contradictory product plans being touted by both FCA execs and the media. Among the areas expected to be […]

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Today is Cinco de Mayo, a Mexican holiday used as an excuse by Americans to drink margaritas and eat bad Tex-Mex. But tomorrow, Fiat Chrysler will unveil their next five-year plan, which should clarify the many contradictory product plans being touted by both FCA execs and the media.

Among the areas expected to be clarified tomorrow:

  • Which of the two minivans will survive FCA’s nameplate consolidation. The smart money is on the Chrysler Town & Country, with the Grand Caravan’s replacement taking the form of a three-row crossover
  • Alfa Romeo’s return to the United States beyond the low volume 4C sports car
  • The future direction of the Chrysler and Dodge brands. FCA has been taking steps to eliminate overlap between the two brands (for example, redesigning the Chrysler 200 while axing its Dodge Avenger sister car), but both lack a strong identity. Chrysler is a mainstream pseudo-upscale brand, while Dodge is a mainstream pseudo-performance brand. Dodge’s customer base skews much younger, but its raison d’etre is flimsy enough that there has been talk of axing it now that the high-performance SRT brand has been spun off of it.
  • Jeep is making an aggressive push in world markets, with a view to doubling sales by 2018 to 1.5 million units.
  • Ram trucks have been a major profit center for Chrysler, but the aluminum Ford F-150 will present a real challenge to Ram’s new diesel half-ton truck.
  • Hybrids and alternative powertrains are expected to be discussed. Although Jeep and Ram have a diesel powertrain through VM Motori (a Fiat owned company) and Ram has a long relationship with Cummins, FCA lacks any sort of hybrid technology, and is lagging in the Corporate Average Fuel Economy rankings. FCA is also reliant on Jeep and Ram for much of their financial success, putting them at a further disadvantage. The only announcement regarding hybrid cars was a brief one about a next-generation hybrid minivan sometime later in the decade.

We’ll have full coverage of the event tomorrow.

 

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Sergio Marchionne Gives Keynote Speech At Canadian International Auto Show http://www.thetruthaboutcars.com/2014/02/sergio-marchionne-gives-keynote-speech-at-canadian-international-auto-show/ http://www.thetruthaboutcars.com/2014/02/sergio-marchionne-gives-keynote-speech-at-canadian-international-auto-show/#comments Sun, 16 Feb 2014 14:00:50 +0000 http://www.thetruthaboutcars.com/?p=742777 While the Canadian International Auto Show is little more than a blip on the radar of the global auto community, this year’s keynote speaker was none other than FCA head Sergio Marchionne gave the keynote address. Marchionne, who immigrated from Italy to Toronto at the age of 14, joked about returning to his “hometown”. Autos.ca […]

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While the Canadian International Auto Show is little more than a blip on the radar of the global auto community, this year’s keynote speaker was none other than FCA head Sergio Marchionne gave the keynote address. Marchionne, who immigrated from Italy to Toronto at the age of 14, joked about returning to his “hometown”. Autos.ca managed to film the speech in its entirety, and you can see both parts here.

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2014 Maserati Ghibli – Sergio’s Super Bowl Surprise http://www.thetruthaboutcars.com/2014/02/2014-maserati-ghibli-sergios-super-bowl-surprise/ http://www.thetruthaboutcars.com/2014/02/2014-maserati-ghibli-sergios-super-bowl-surprise/#comments Mon, 03 Feb 2014 10:00:18 +0000 http://www.thetruthaboutcars.com/?p=731306 Sergio Marchionne and crew surprised everybody by using the Super Bowl to premiere a long form ad (below) for the new Maserati Ghibli. One might question the wisdom of using the “big game” to promote a niche brand, but Sergio says he wants to sell 50,000 Maseratis a year and the Ghibli, which starts at […]

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Sergio Marchionne and crew surprised everybody by using the Super Bowl to premiere a long form ad (below) for the new Maserati Ghibli. One might question the wisdom of using the “big game” to promote a niche brand, but Sergio says he wants to sell 50,000 Maseratis a year and the Ghibli, which starts at ~$65,000, is a big part of that plan, so putting the entry level Maser in front of the biggest tv audience of the year makes some sense. The thing is that the ad is one of those that’s heavy on the stirring dramatic and philosophical voiceover and not quite so product intensive. You don’t get to see the actual car until more than a minute into the 90 second spot and then it flashes on screen for less than 10 seconds. The Ghibli site and configurator apparently crashed earlier under Super Bowl levels of traffic, but as of the middle of the third quarter of the game, it’s up and running. In case it crashes again, and you’d like to see what the Ghibli looks like, you’re in luck.

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At the recent Detroit auto show, after the rich folks left, the show organizers allowed the media to come in and photograph the ultra-luxe cars on display at The Gallery, a event held at a local casino for 400 well heeled invitees. There was a Ghibli on display next to a Granturismo and a Quattroporte. I think it looks rather ordinary for an Italian [quasi] exotic. The front end seems pinched to me and the rear end looks like it could be on a Toyota or Hyundai. Franz von Holzenhaus’ Tesla Model S makes a much more attractive Maserati. The Ghibli will probably sell well though. It’s reasonably stylish from most angles and it has the name. After all, the Maserati name helped Lee Iacocca move some K car variants. I’m not sure what sales will be like in 2015 and 2016, though, after Ghibli owners discover what many Quattroporte buyers have learned: Maserati may be trying to compete with similarly priced German luxury sedans, but their cars may not be up to the rigors of daily driving the way those German cars are.

Stereo pics here.

Click here to view the embedded video.

Ronnie Schreiber edits Cars In Depth, a realistic perspective on cars & car culture and the original 3D car site. If you found this post worthwhile, you can get a parallax view at Cars In Depth. If the 3D thing freaks you out, don’t worry, all the photo and video players in use at the site have mono options. Thanks for reading – RJS

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Fiat Says No Chrysler IPO Before 2014 http://www.thetruthaboutcars.com/2013/11/fiat-says-no-chrysler-ipo-before-2014/ http://www.thetruthaboutcars.com/2013/11/fiat-says-no-chrysler-ipo-before-2014/#comments Tue, 26 Nov 2013 11:30:54 +0000 http://www.thetruthaboutcars.com/?p=663890 Though Chrysler-Fiat CEO Sergio Marchionne had previously said that an initial public offering of Chrysler stock could take place by the end of 2013, the Italian automaker announced that stock sale will not take place before the new year. “The Board of Directors of Chrysler Group … has determined that it will not be practicable for Chrysler […]

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Though Chrysler-Fiat CEO Sergio Marchionne had previously said that an initial public offering of Chrysler stock could take place by the end of 2013, the Italian automaker announced that stock sale will not take place before the new year. “The Board of Directors of Chrysler Group … has determined that it will not be practicable for Chrysler Group to launch and complete an initial public offering prior to the end of 2013,” Fiat said in a statement.

 

The sale could help resolve the dispute between Fiat and the UAW’s health benefits trust, which owns 41.% of Chrysler, over the valuation of that stake, but a delay in the IPO could also delay Fiat’s full acquisition of the Auburn Hills based automaker. Marchionne would like to merge Fiat and Chrysler to create the world’s 7th largest auto firm and give Fiat access to Chrysler’s profits. Chrysler had initially filed paperwork for an IPO in late September.

The Wall Street Journal reports that Chrysler would raise between 1.5 and 2 billion dollars with the IPO. That would give the company a market valuation of 9 to 12 billion dollars. Fiat declined to comment on the report.

Marchionne wants to merge the Fiat and Chrysler to create the world’s seventh-largest carmaker. Fiat has been hurt by the weak European market. The company’s plan to reduce losses in Europe depends on sharing technology, cash and dealer networks with Chrysler. The merger would also give Marchionne access to Chrysler’s profits and allow him to use that cash to shore up Fiat and expand its product offerings. The companies, while managed by the same people, must currently keep their finances separate.

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Crude Oil And Lazy Workers: Details About Chavez’s Threat To Oust Toyota http://www.thetruthaboutcars.com/2009/12/crude-oil-and-lazy-workers-details-about-chavez%e2%80%99s-threat-to-oust-toyota/ http://www.thetruthaboutcars.com/2009/12/crude-oil-and-lazy-workers-details-about-chavez%e2%80%99s-threat-to-oust-toyota/#comments Fri, 25 Dec 2009 11:52:18 +0000 http://www.thetruthaboutcars.com/?p=340223 The Christmas season would be a reason to be merry, would it not be for Hugo Chavez. More details about his expropriation threats emerge. Turns out, Chavez did not just threaten to kick out Toyota for being lackadaisical in the production of “rustic” vehicles. “President Hugo Chavez told foreign automakers Wednesday to share their technology […]

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The Christmas season would be a reason to be merry, would it not be for Hugo Chavez. More details about his expropriation threats emerge. Turns out, Chavez did not just threaten to kick out Toyota for being lackadaisical in the production of “rustic” vehicles.

“President Hugo Chavez told foreign automakers Wednesday to share their technology with local businesses or they will be told to leave the country,” writes the Boston Globe. Chavez gave the ultimatum in wholesale fashion to Ford, General Motors, Toyota and Fiat. Implied, the ultimatum is also meant for Fiat-controlled Chrysler, for Mitsubishi, Mack and Fiat-owned Iveco. All of the above have production facilities in Venezuela. All are at risk of instant deportation.

Their options are either to “share their technology with local businesses” (a half-expropriation) or get out (a full expropriation.) Chavez usually doesn’t do nationalizations in piecemeal fashion. He tends to nationalize whole industry sectors. The metals, cement, oil, coffee and electricity sectors are all being owned by the people of Venezuela, or Hugo Chavez, depending how one looks at it.

The auto sector appears to be next in line. Chavez is no fool, and he knows that building cars is not as simple as pumping crude, or baking limestone to make cement. Without foreign technologic know-how, Venezuelan’s roads will soon resemble Cuba’s highways. Hence the offer “share, or go.” If the foreigners go, other foreigners could be invited in: Automakers from Russia, Belorussia, or especially China.

Today’s Nikkei [sub] sees even more sinister dealings afoot: Oil and China. Says the Nikkei: “The takeover threat and possibility of turning control over to the Chinese comes on the heels of two days of bilateral talks with China that ended Tuesday. The Chavez administration said in a statement after the talks that it now considers China its ‘main strategic alliance.’”

Venezuela currently sells 1 million barrels a day of Venezuelan crude to the U.S. Chavez wants to reduce this co-dependency, and focus on China instead. Venezuela currently ships 400,000 barrels a day to China. Chavez wants to raise that to a million per day, damn the distance from Puerto La Cruz to Qingdao.

Chinese cars could be a nice icing on that trade cake. According to the Nikkei, Great Wall Motors begun selling cars in Venezuela in 2006. Chery had plans to open an assembly plant in Venezuela, but nothing came of it – yet.

US and Japanese makers dominate the market in Venezuela. GM leads the market with 45,523 vehicles sold so far in 2009, Ford is second and Toyota is third. Sales are down 49 percent this year, but not because of a lack of buyers. Demand far outstrips the low supply of cars in Venezuela. A gallon of gasoline costs about $0.07 in Venezuela. The land of the “21st Century Socialism” would be a driver’s paradise, if only the roads would be paved and if only cars would be there to be bought.

Indigenous production is hampered by strict currency controls that prevent automakers from getting the dollars to import auto parts they need to meet production goals. Auto makers also have to contend with a “high level of absenteeism, disobedience, aggression and lawlessness of some of the workers,” says the Nikkei. Mitsubishi had to shut down its plant for 30 days in August, because the workers didn’t show up. In May, a Toyota union leader was shot dead. He had led a month-long strike last year that paralyzed the Toyota plant in the eastern city of Cumana. In September, murder charges were brought against a man, but the motive remains a mystery.

Says the Nikkei: “It appears many auto workers hope their company is nationalized so they can become de facto government workers and enjoy the extra job security that comes with it.”

Should it really come to the Chinese taking over Venezuela’s auto plants, then the workers may be in for a rude surprise. Chinese factory managers are not necessarily known for their subtle style when it comes to labor relations. GM, Ford, and Toyota should send their union leaders on an all expense paid study tour to the suburbs of Shanghai, or to frigid Changchun, and they’ll quickly change their minds.

The matters are being complicated by the US and Japan being major trading partners of China, and by GM and Toyota having major joint ventures in China and buying lots of parts from Chinese manufacturers. China will gladly buy Venezuela’s oil and build them some ports to go with it. But they won’t put their booming auto business at risk for some 100,000 “rustic” cars built in Venezuela.

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