The Fiat-Chrysler Strategy: Now Featuring Jeep And Alfa

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.