Fiat Chrysler Shifting Production Plan
Detroit — Fiat Chrysler Automobiles said last week it will shift its production emphasis toward building more Jeep SUVs, Ram pickups and hybrid or electric vehicles to meet what it sees as permanent changes in the trends driving the North American automotive industry.
The automaker now is aiming to sell more than 2 million Jeeps globally by 2018, an increase from its prior target of 1.9 million.
FCA said it will add diesel and hybrid electric versions of its next-generation Jeep Wrangler when it goes on sale by 2018. The company also plans to offer “next-generation powertrains” on its next Ram pickup and produce a mild hybrid version of its Ram pickup.
The product news is included in FCA’s business plan update, which was posted on the automaker’s investor page Wednesday morning.
In North America, the automaker said it will:
-Realign capacity to produce more pickups and Jeeps by end of 2017 to match shift in demand.
-Accomplish the new plan within its existing plant infrastructure with its hourly workforce remaining stable or slightly higher.
-Solidify opportunities with partners to maintain its market presence in compact and midsize sedan segments.
-Strive for regulatory compliance “through new product technologies and architecture efficiency actions.”
The automaker was expected to announce changes to the production location of several of its products but did not include any of those details in the plan it released.
The automaker said it is making the changes to its strategic plan because of several new trends in the U.S. automotive industry. FCA said it believes that industry sales either hit their historic peak in 2015 or will hit a peak in 2016. After that, total industry sales are expected to either remain flat or fall.
FCA added that it believes low gas prices are a here to stay, at least for the foreseeable future.
As a result, the company said it must refocus its energy on developing the SUVs and pickups that Americans want and are buying.
The changes in North America are part of an update to the automaker’s five-year strategic plan, and have been in the works for at least several months.
In 2014, Fiat Chrysler CEO Sergio Marchionne unveiled a plan to spend $52 billion (48 billion euro) over five years in his quest to boost annual sales of cars and trucks from 4.6 million in 2014 to 7 million by 2018.
That plan leaned heavily on a goal to relaunch the Alfa Romeo and Maserati brands globally and counted on substantial future sales from China. FCA initially intended to spend $5.5 billion by 2018 to launch eight new Alfa Romeo models in a bid to make the sporty premium brand a true competitor with the likes of Audi, BMW, and Mercedes-Benz.
On Wednesday, FCA said it has extended its time frame for the introduction of those eight Alfa Romeo models to 2020 and has reduced the amount of money it plans to spend by 2018 on the brand.
Since announcing that plan, the outlook for the automotive industry in China has changed, forcing Marchionne to delay some Alfa Romeo models and move up the introduction of others.
Marchionne said the automaker still plans to launch the Alfa Romeo Giulia sedan in the U.S. by the end of the summer. While the small Alfa Romeo 4C roadster went on sale in the U.S. last year, the Giulia is expected to be the first car to appeal to mainstream premium car buyers since Fiat pulled the brand out of the U.S. in the mid-1990s.
Under the updated plan announced Wednesday, FCA said it will “recadance” the timing of the Alfa Romeo models and is now aiming for more sales to come from North America and Europe than in its prior plan.