By on March 11, 2019

Image: FCA

With Sergio Marchionne gone, most assumed Fiat Chrysler Automobiles would swiftly enact the late CEO’s plan to convince another automaker to partner with the company. Until recently, FCA was viewed as a dinosaur within the industry — limping along since its Fiat acquisition with a lineup of unpopular European imports and oversized American vehicles that couldn’t possibly endure tightening fuel regulations.

However, the reality turned out to be quite different. While Fiat’s volume in the U.S. fell from its 2014 peak of 46,121 units to just 15,521 deliveries in 2018, Dodge and Chrysler managed to endure their losses more gracefully, cutting less-profitable models from the lineup and focusing instead on larger vehicles requiring less pricey R&D. Meanwhile, Jeep rose like a phoenix from the ashes — with its annual volume going from 231,701 deliveries in 2009 to last year’s 973,227 units. 

Now, FCA is investing in the United States while Jeep makes inroads across the globe. Things are going so well, in fact, that the company’s projected profits are expected grow in the second half of 2019 — even in an era of declining sales. CEO Mike Manley told Automotive News during the Geneva Motor Show that the company now possesses a balance sheet with “strength we haven’t had before.” But being confident in the automaker’s current business strategy doesn’t mean Manley isn’t interested in potential partnerships.

“I want to find areas where cooperation — whether it is partnerships, whether it’s joint ventures or whether it is deeper levels of equity cooperation that makes sense for us and whoever that is — [will] give better vehicles to our customers and a better return to our shareholders,” Manley elaborated. “I’m very open to it.”

While most of those earlier prospective deals have since dissolved, PSA Group is planning a revival in the United States and likely needs a domestic partner to make it happen. FCA is on the list, and it’s looking particularly appetizing after spinning off Magneti Marelli, committing to its restructuring plan (which doesn’t involve Ford or General Motors’ staffing cuts), adding production and jobs in North America, and getting its finances in better order.

However, Fiat Chrysler has yet to fully commit itself to the costly endeavor of developing electrified powertrains and autonomous vehicles. Marchionne previously said that automotive partnerships would help the industry shoulder the immense cost associated with mobility projects, and FCA was left without an arm focused on either. While the company has promised more plug-in hybrids soon, it’s often seen as being behind the curve in terms of electrification (and delivering competitive fuel economy averages across its product range). In truth, the company ranked dead last in the most recent assessment of corporate fuel efficiency averages.

But Manley says the public’s slow EV adoption rate hasn’t hurt the company — claiming that his default response to those asking if FCA is late in bringing electrification to the market is “late for what?”

That will undoubtedly change as government-mandated efficiency averages continue to climb in other parts of the world, but Fiat Chrysler still might be able to mitigate costs via a clever partnership. Manley said Volkswagen’s decision to open its EV project to the rest of the industry further proves that being late to the e-party isn’t necessarily a bad thing. “If the biggest car company in the world is saying, ‘Please come and partner on a platform,’ I don’t think I need to endorse the point that scale is important,” he said.

The company’s big mobility partnership currently involves little more than selling vehicles directly to Waymo to be adapted and used for autonomous testing and ride-hailing services. Last year, the tech firm announced it would purchase 62,000 Chrysler Pacifica minivans for its autonomous fleet, with FCA saying there was a possibility it could eventually gain a licensed self-driving system for use in its retail vehicles. While the second half of that equation is terribly uncertain, it does cast FCA in a different light from its competitors.

Rather than invest a sizable portion of its value into purchasing tech companies and developing its own self-driving system, FCA has decided to supply product (making some money in the process) to those that are in the hopes that they’ll come back around to return the favor. It’s a strategy that made the company look like a congregation of luddites a few years ago, but has begun to appear rather wise, especially as other automakers continue incurring significant financial losses through these types of investments with little to show for it.

[Image: FCA]

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23 Comments on “FCA Fine Flying Solo, Equally Happy With Help...”


  • avatar
    Lie2me

    FCA has become very good at going after niches where there’s little competition, good for them it seems to be working

  • avatar
    R Henry

    I have never been an FCA customer, and avoided the older Chrysler Corp. products based on their reputation for sub-par quality.

    This week however, I have been driving a rental 2018 Dodge Charger R/T. This car has prompted me to completely re-evalute my perspective. This car is effing FANTASTIC.

    It has been a long time since I drove a sedan with a V8. This Hemi is a masterpiece. The 8-speed auto trans is fantastic. The seats coddles my butt very nicely, and the stereo, when I am not listening to Hemi-Music, is excellent–likely the best non-branded, non-upgraded stereo I have ever heard in a mass market car. The touch screen interface puts my Mazda6 to shame.

    I have carefully examined the car stem-to-stern. I have not found anything worth mentioning about sub-standard materials or build quality.

    If this Charger R/T is a fair representation of FCA products, they are to be commended. When the time comes, I will most certainly consider an FCA product…likely a Charger!

    • 0 avatar
      Zackman

      I wonder how their cars will b e AFTER the warranty period. Our son’s girlfriend recently bought a Challenger R/T (V-6). So far she loves it, so we shall see.

      Personally, for FCA’s sake – the Chrysler group, not Fiat – I hope their cars do well. Fiat? Bury it alive!

    • 0 avatar
      ajla

      “I have not found anything worth mentioning about sub-standard materials or build quality.”

      That would be a giant upgrade over my ’14 R/T in which many interior surfaces were warping or cracking within 4 years. It also leaked glue from some seams and the HVAC blend doors were getting noisy. That’s all beyond the alternator/ battery issues I had.

      It was a certainly a fun car, but quality was not job #1. Or even job #5.

      • 0 avatar

        It always worth to check out used car lots before making decision about buying particular new car on the subject how they would age over say 5 years. That is what I usually did and that is how I took Chrysler and GM products off my shopping list. Actually GM cars were looking depressing, esp interiors, even when they were new.

      • 0 avatar
        R Henry

        Now that you mention it…I have heard the HVAC make a few strange noises under the dash…..

        • 0 avatar
          iNeon

          Blend doors? Y’all are talking about FCA blend doors?

          To properly talk blend door– one needs to talk GM SUV.

          • 0 avatar
            Hummer

            “Blend doors? Y’all are talking about FCA blend doors?

            To properly talk blend door– one needs to talk GM SUV.”

            ——-
            Ain’t that the truth.

    • 0 avatar
      dividebytube

      Challenger is on the short list for my next car. Of course given the slow death of cars with manuals, that list is getting shorter and shorter and making me consider cars that I normally would never look at.

      Ideally I like sleepers, not showy cars, but life in a V6 Mustang has been pretty good. My wife will probably end up with that while I get a Challenger.

      • 0 avatar
        redapple

        I rent 300 s when I can. The V 6 is plenty for me. It ZINGS !!!
        31 MPG highway. Nice cabin. Seats, stereo. I love it.

        The 31 MPG beats the crappy Impala I had 3 weeks ago. Impala-29MPG and it is front drive.

        I m Old school. There is something about read drive. I love it. (300, charger and Challenger are all rear drive)

    • 0 avatar
      Hummer

      I want to try the current update of the Challenger, not sure if I would go with the 392 or the 5.7L with the softer springs. Either way it’s still a good looking car, different class from the Mustang and Camaro, and it owns its place.

      • 0 avatar
        R Henry

        I find the 5.7 plenty powerful, musical, and…thirsty! My choice would be a manual 5.7…with some stripes.

        Mustang is an option, but it is a smaller car, a bit more difficult to get in and out of, and less comfy.

  • avatar
    deanst

    The problem for FCA is that they have managed to run up their share price to such an extent that it makes a merger difficult. However, once you strip out pickups and Jeeps, there really isnt much else of any value.

  • avatar
    TDIandThen....

    Excellent briefing Matt, thanks for it. I’d be curious to know of the potential partners in hybrids / EVs, which are most profitable for FCA.

    I can’t think of an FCA product I’d want to own besides maybe a not-yet-existent electrified 124, but I appreciate that FCA have hit their markets very well over many years and now have cash to advance.

  • avatar
    jatz

    Another promo shot intended to depict snow prowess in not even 6″ of snow.

    We are not impressed.

    • 0 avatar
      ToolGuy

      jatz,

      Sand I think. For whatever reasons, Jeep has a VERY strong attraction for young women these days. I resisted, but ending up getting one (2010 model) for my daughter. (Ignore the P0302 code unless the misfire counts go too high – the compression is slightly low on cylinder 2. And the headlights stop working when the car is in a bad mood – but they usually come back.)

      • 0 avatar
        jatz

        OK… not even 6″ of sand! :-D

      • 0 avatar
        iNeon

        The headlights are the combination switch.

        It happens in the smaller cars with combination switches– Caliber/Compass/Patriot and the sedans. My old/nephew’s 2008 PT Cruiser will blink the headlamps or swipe the windshield if you bump those switches. He’s been very hard on the car, it never did that for me in my 100k miles with it.

        In the rear-drive cars, the same fault would be in the body computer.

        A Cousin’s late-run Liberty went apesnit when its body computer lost communications with the network, and subsequently re-found them, activating every electrical accessory– the car went to impersonating Christine.

        • 0 avatar
          ToolGuy

          iNeon,

          Hi and thanks. 2010 Liberty. The headlamp thing is strange (and yes it has reminded me of Christine more than once – hence the ‘bad mood’ comment).

          If you turn the switch, the computer turns the headlamps on, then turns them back off after a short delay (i.e., I see you there, all the connections are good, everything works, but you can’t have headlamps right now). The first time it happened I installed new bulbs and that fixed it – then it came back – but intermittent and infrequent.

          The workaround is to turn on the large prominent foglamps – all the ‘running’ lights work, and the vehicle isn’t driven a lot at night.

          (I’ve actually had a new body computer in the vehicle as part of tracking down an engine thing, but it got returned in the end.)

          • 0 avatar
            iNeon

            Honestly— I avoided that generation car entirely.

            Sailed right through in a reliable neon built during the renaissance— and a PT that was kept so simple in its DCX-ization that it didn’t warrant the cost of a full electronics redesign.

            Late run PTs have a mutty version of the Mercedes electronics architecture. None of the features, but things work longer.

            You’d have been better served to have taken a bubble Liberty.

  • avatar
    Blackcloud_9

    While showing some wise restraint in not throwing money at the EV/Autonomous driving tech of the week, with the lack of R&D investment in anything new for Chrysler and Dodge, I could easily see FCA dropping the aging lineups in the near future. This make good business sense since Ram and Jeep are the only money-making divisions in America but it will certainly upset the petrol-heads.
    And of course, they’ll need to change the name to FJA


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