FCA Fine Flying Solo, Equally Happy With Help

Matt Posky
by Matt Posky
fca fine flying solo equally happy with help

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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8 of 24 comments
  • Jatz Jatz on Mar 11, 2019

    Another promo shot intended to depict snow prowess in not even 6" of snow. We are not impressed.

    • See 5 previous
    • ToolGuy ToolGuy on Feb 06, 2020

      iNeon, "The headlights are the combination switch." Absolutely correct - changing the turn signal/headlight switch fixed this. 15 minutes and four screws. (I'm a slow listener.) Misfire code is gone after some other work. (I've decided I like the Jeep.)

  • Blackcloud_9 Blackcloud_9 on Mar 12, 2019

    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

  • Golden2husky 78 Concept is pretty awesome to me -
  • Redapple2 Make mine a 110 Defender- diesel.
  • Redapple2 What is the weight of the tractor? What is the range at full load? What is the recharge time? Not a serious product if they are HIDING the answers.
  • Lou_BC "Owners of affected Wrangles" Does a missing "r" cancel an extra stud?
  • Slavuta One can put a secret breaker that will disable the starter or spark plug supply. Even disabling headlights or all lights will bring more trouble to thieves than they wish for. With no brake lights, someone will hit from behind, they will leave fingerprints inside. Or if they steal at night, they will have to drive with no lights. Any of these things definitely will bring attention.I remember people removing rotor from under distributor cup.