Fiat Chrysler Automobiles has updated its current business plan, and...well, let's just say that changes are afoot at FCA, but none of them will catch anyone off-guard.
The new plan stems from changes in the global marketplace that position some FCA products for greater success than others. Such changes include:
- Stubbornly low fuel prices
- China's uncertain economy
- CEO Sergio Marchionne's inability to merge with an ideal automotive partner (like General Motors)
Those and other factors have caused problems with FCA brands like Fiat, which posted an 8 percent sales drop in 2015. Even performance brand Dodge took a hit, with sales tumbling 10 percent compared to 2014. The only FCA brand that really excelled last year was Jeep, which boasted a massive jump of 25 percent.
FCA's profits were down sharply for 2015: the company earned just 377 million euros ($410 million) last year, 40 percent below 2014 figures.
Now, the company and its CEO have announced new strategies for the near future, including:
- A heavy focus on SUVs and trucks: Marchionne has described today's low gas prices as "permanent". You can debate that all you like in the comments below, but there's no denying that cheap fuel has made small cars and fuel-efficient rides a tougher sell and boosted the attractiveness of utilities and pickups.
- A particularly heavy focus on Jeep products: That's no surprise to anyone who noticed that Jeep recently greenlighted a pickup. In part because of current low gas prices, Jeep sales are skyrocketing. FCA plans to improve Jeep output across North and South America, as well as in Asia. There's even a diesel Jeep Wrangler in the works, due out before 2022.
- A limited focus on mild hybrids: FCA doesn't seem happy about going hybrid, but it's doing so to meet tightening emissions regulations around the globe. Among the likely new models are a Jeep Wrangler hybrid and a Ram 1500 hybrid, too.
- A slowdown on Alfa Romeo products: Marchionne had intended to take the U.S. by storm with the return of Alfa Romeo, but that storm has now become a weak, stalled-out cold front. Today, Americans can buy the 4C and its spyder sibling, but the only other models we can expect to see in the next few years are the Giulia sedan and an SUV. Six other models, including a couple of utilities, are on hold until at least 2017 -- possibly much later.
- The death of the Dodge Dart and the Chrysler 200: Neither of those kill-offs is surprising. Marchionne says that the two models will "run their course" so that their plants can be repurposed for Jeep production. There's a slim chance that FCA will partner with another automaker to continue manufacturing the Dart and the 200, but if they're not selling now, there's clearly no guarantee that they'd sell later. (Unless, of course, fuel prices were to surge again.)
- A freeze on new plants in the U.S.: In announcing the revised plan, Marchionne made it clear that he intends to repurpose the company's existing facilities rather than build ones from scratch.
Did anything catch you off-guard? Or was your reaction more a case of, "Well, duh, what took 'em so long?" Share your thoughts about FCA's revised business plan in the comments below.