By on January 16, 2018

jeep renegade grille

Last year, following several fruitless attempts to find a merger partner, Fiat Chrysler Automobiles found itself on the business end of a pretty shocking rumor. Apparently, several Chinese automakers were lining up for a chance to buy FCA. Not so, said those automakers, though Great Wall Motors mentioned it totally wouldn’t miss a chance to steal the Jeep brand away from its parent.

While the thought of such an acquisition no doubt inspired nightmares among Jeep fans (and FCA accountants), it was not to be. Not only is the automaker determined to keep a firm hold on its most valuable brand, it’s not planning on offloading any division, CEO Sergio Marchionne now claims.

“We’re not going to break up anything,” Marchionne said Monday at the North American International Auto Show. “We have no intention of breaking it up and giving anything to the Chinese.”

FCA expects the Jeep brand to serve as a major profit driver in the coming years. A flurry of investment on behalf of FCA has seen Jeep spawn globally focused models ready to tackle new markets, as well as gain new production locales in order to feed that demand. In his speech, Marchionne claims Jeep could help FCA double its net profits. (Unspoken: it would also help FCA eliminate its debts.)

Like the other Detroit Three automakers, FCA’s also counting on Chinese sales to help offset a declining U.S. new car market. However, its Chinese partner, Guangzhou Automobile Group Co Ltd, isn’t something to worry about, Marchionne said. FCA forged a partnership with GAC Motor in 2010 in order to sell its vehicles in China, and lately the Chinese automaker is expressing interest in selling its own vehicles in the U.S. (A full display greeted journos at the Detroit show this year.)

While the two automakers clearly get along well, “none of these things are designed to impact on the independence of FCA,” Marchionne said.

A report last summer claimed Marchionne was weighing the spinoff of the Maserati and Alfa Romeo brands in order to make the expansive company more attractive to would-be suitors. Nothing came of the rumor, though one FCA division — parts maker Magneti Marelli — will leave the flock. Marchionne wants the division spun-off by the end of the year.

[Source: Reuters] [Image: Fiat Chrysler Automobiles]

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32 Comments on “We’re Not Offloading Any Brands to China: Fiat Chrysler CEO...”


  • avatar
    dwford

    FCA simply has too many brands, and aside from Jeep, none are doing well. Who would want any of it?

  • avatar
    bluegoose

    Sergio is like Trump. He says one thing one day. The next day he says the opposite. I wouldn’t believe a word that comes out of his mouth.

  • avatar
    APaGttH

    We’re not offloading Jeep to China.

    Fixed the headline for ‘ya.

  • avatar

    FCA is expecting to have most of their debt paid off by June.

    On a side note FCA share price doubled in the past 8 months
    Ford up 20%
    GM 30%
    If you look over longer then a Year FCA looks even better.

    Are they in a super great spot? No but there now in a place with lower debt where they can survive without a merger or fire sale.

    • 0 avatar
      NoID

      One reason why I wish FCA had an employee stock purchase plan. Not that my track record there is so great, at my previous company I elected to hold on to my money and wait for their $70 stock to go down before I started buying. Over the course of the following year it doubled, then split. Big face palm on that one.

  • avatar

    I think the rumor remains, Hyundai buys the ChryCo brands and keeps only Jeep and Ram. Two years, maybe three. Negotiations apparently under way.

  • avatar
    dukeisduke

    The suitor I keep hearing about is Hyundai.

  • avatar
    bluegoose

    I don’t think there will be an all out merger with Hyundai. I could see an agreement like Chrysler had with Mitsubishi back in the day.

    • 0 avatar
      SC5door

      FCA already buys transmissions from Hyundai’s PowerTech unit (well they did for some time until the Patriot, Dart and old Compass went away).

      http://www.powertech.co.kr/en/product/introduce.do

      I can see them not developing anymore transmissions in house and outsourcing that to ZF and PowerTech. FCA also wants to get into the hydrogen game of which Hyundai is already showing its second generation unit.

      • 0 avatar
        bluegoose

        I think Hyundai would like to sell a Truck in NA. Dodge/Chrysler could use a car platform from Hyundai to develop a small car or crossover. Ram doesn’t field a midsize pickup at the moment. Maybe Hyundai and Ram could share the cost and capacity to bring one to the US.

      • 0 avatar
        NoID

        If you’ve noticed, FCA already has outsourced transmission development to ZF. Both the 8-speed transmission and 9-speed transaxle are ZF units, either sourced directly from ZF or license-built in FCA facilities. A great deal of their independent front and rear axles are likewise designed and sourced by ZF.

        Like most (if not all) major automakers nowadays FCA is a designer of systems and assembler of components, leaning on the supply base to source the increasingly commodified pieces that comprise the vehicles they sell.

        Your angle on hydrogen is interesting, and this does line up with Sergio’s stated intent not to lead on alternative energy but be a very close follower. That said, if the home-grown hybrid system in the Pacifica isn’t “leading” then I don’t know what is.

  • avatar
    RHD

    Maybe Sergio can sell them DeSoto, Plymouth, Eagle, Nash and Hudson.

    AMC, we’re keeping that one. They can start CMC on their own if they want to.

  • avatar
    TW5

    As goes CAFE so goes FCA. As others have pointed out, FCA stock has been on a tear since the election in 2016. No company is less prepared (it seems) to meet the new CAFE regulations, and some of their most important vehicles are on the CAFE chopping block.

    The CAFE changes announced on March 31st and their passage through Congress will have a profound impact on the company.

    • 0 avatar
      highdesertcat

      “The CAFE changes announced on March 31st and their passage through Congress will have a profound impact on the company.”

      I can believe that. But Fiatsler does have one excellent, modern engine, the normally aspirated PentaStar 3.6L V6 and I see that as one possibility for wider use throughout the Fiatsler lines.

      Hey, with a stronger, reinforced bottom end, maybe four-bolt mains, put a blower (or two) on it, and voila, an engine with wide applications.

  • avatar
    el scotto

    Sergio gets to run around in his sweater and run FCA day to day. He also gets to train John Elkann. John Elkann, and the rest of the Agnelli heirs control the company that controls FIAT. Gianni’s heirs may want to cash out out a lot more than ole Henry’s do.

  • avatar
    Tstag

    BY FAR and away the most logical company for FCA to merge with is VW precisely because VW has many brands which they don’t sell in the US like seat and Skoda. VW is the only company who could make something of every FCA brand. Chrysler and Dodge could sell rebadged Skoda and Seat’s. Fiat could continue to sell the small cars it does so well and simply restyle a couple of other VAG products to replace cars like the Bravo. Maserati could largely continue as is but use Porsche parts to lower costs. Alfa could restyle Audis. In return VW gets Jeep and a huge US presence to build from with US nameplates.

    The real question is does VW want to manage so many brands?

    • 0 avatar
      jpolicke

      Sorry but I don’t see the logic. VW isn’t selling SEAT and Skoda here because there isn’t enough demand for spinoffs of cars VW already offers. VW as a brand isn’t that highly regarded in the US, so what would it take for those brands to gain acceptance? And VW needs FIAT, a brand the Italians have trouble selling to each other, like a teenager needs another pimple. Also, most of the product line consists of small compact cars; Americans aren’t very interested in them, or even “cars” in general.

  • avatar
    troyohchatter

    I think Steven Lang at http://www.dashboard-light.com/ called this a while back.

  • avatar
    CincyDavid

    Shoot, I’d rather have a Skoda labeled as such…not rebadged as a Chrysler. Is there a better vehicle name than the Skoda Yeti?!?

    Methinks Sergio doth protest too much…he’d love to unload the whole shebang and walk away looking like a hero.

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