Fiat Chrysler Makes Billion-Dollar Jeep Investment; Dodge Dart is Gone in September
Fiat Chrysler Automobiles is flinging cash at its Midwestern assembly plants as part of its world-conquering plan to boost Jeep production.
Yesterday, the automaker announced $1.05 billion in funding to retool its Belvidere, Illinois and Toledo, Ohio production facilities, and issued a kill date for one of its least popular products.
That’s right — say goodbye to the slow-selling Dodge Dart, which gets booted from Belvidere Assembly in two months to make room for Jeep Cherokee production starting in 2017. FCA CEO Sergio Marchionne plans to outsource production of small cars to another automaker, but so far, no takers have stepped up to fulfill his dream.
Belvidere gets $350 million for Cherokee production, which is being shuffled from Illinois from Toledo. FCA plans to axe the paleolithic Jeep Patriot and Compass in December, making room for a single, yet-unnamed Fiat-based model.
The Toledo Assembly Complex sees the biggest investment — $700 million, to support production of the next-generation Wrangler, expected in 2018. That model, which will see a pickup variant added to its lineup, is undergoing key weight- and fuel-saving efforts designed to make the Environmental Protection Agency happy.
FCA claims it will announce its plans for the Toledo South plant some other time. The retooling efforts, which are supported (and dependent) on state and local investments, are expected to create 1,000 new jobs.
[Image: FCA US]
TMA1 on Jul 15, 2016
Why are the Compass and Patriot being axed? I thought they were reaching record sales this past year. That's pure profit for tooling that was long ago paid off. Unless it's a capacity issue, and Jeep has something even more profitable to build. Renegade aside, I don't think the public has an appetite for more Fiat-based cars.
JimZ on Jul 15, 2016
"That’s right — say goodbye to the slow-selling Dodge Dart, which gets booted from Belvidere Assembly in two months to make room for Jeep Cherokee production starting in 2017. FCA CEO Sergio Marchionne plans to outsource production of small cars to another automaker, but so far, no takers have stepped up to fulfill his dream." you're going to kill off a product with no replacement for at least three years; so what are you going to do if gas prices spike next year and people stop buying Jeeps?
Npaladin2000 on Jul 15, 2016
This makes a lot of sense. Frankly, Chrysler has always been bad at small cars. Fiat seems to be OK with SOME small cars, but others not so much (the 500L was an interesting car except for being ugly). I'm not sure their C and D class cars from Europe could successfully transition here, but frankly the compact and midsize sedan is a repidly shrinking market, and one has to seriously question how much effort the segment is worth versus equivalent CUVs...which FCA does really well with. I think this is the right move, and I think we may see other manufacturers start to de-emphasize their traditional car lines, by eliminating unpopular models and taking traditionally seperate models and combining them (I see GM combining the Malibu and Impala at some point, and I'm not sure how much longer Ford will keep the Taurus around).
SCE to AUX on Jul 15, 2016
For perspective, the Dart will probably sell 50k copies this year. The past three years have been mid-80k volume each. Not terrible numbers by themselves, but near the bottom in its class, and I think it points to how desperate FCA is to increase its margins by selling more-profitable Jeeps. http://www.goodcarbadcar.net/2016/07/usa-small-car-sales-stats-june-2016.html