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Today is Cinco de Mayo, a Mexican holiday used as an excuse by Americans to drink margaritas and eat bad Tex-Mex. But tomorrow, Fiat Chrysler will unveil their next five-year plan, which should clarify the many contradictory product plans being touted by both FCA execs and the media.
Among the areas expected to be clarified tomorrow:
- Which of the two minivans will survive FCA’s nameplate consolidation. The smart money is on the Chrysler Town & Country, with the Grand Caravan’s replacement taking the form of a three-row crossover
- Alfa Romeo’s return to the United States beyond the low volume 4C sports car
- The future direction of the Chrysler and Dodge brands. FCA has been taking steps to eliminate overlap between the two brands (for example, redesigning the Chrysler 200 while axing its Dodge Avenger sister car), but both lack a strong identity. Chrysler is a mainstream pseudo-upscale brand, while Dodge is a mainstream pseudo-performance brand. Dodge’s customer base skews much younger, but its raison d’etre is flimsy enough that there has been talk of axing it now that the high-performance SRT brand has been spun off of it.
- Jeep is making an aggressive push in world markets, with a view to doubling sales by 2018 to 1.5 million units.
- Ram trucks have been a major profit center for Chrysler, but the aluminum Ford F-150 will present a real challenge to Ram’s new diesel half-ton truck.
- Hybrids and alternative powertrains are expected to be discussed. Although Jeep and Ram have a diesel powertrain through VM Motori (a Fiat owned company) and Ram has a long relationship with Cummins, FCA lacks any sort of hybrid technology, and is lagging in the Corporate Average Fuel Economy rankings. FCA is also reliant on Jeep and Ram for much of their financial success, putting them at a further disadvantage. The only announcement regarding hybrid cars was a brief one about a next-generation hybrid minivan sometime later in the decade.
We’ll have full coverage of the event tomorrow.
43 Comments on “FCA Unveils 5-Year Plan On Tuesday...”
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Five year plans…shades of the old USSR, although they had 15 year plans.
Now seriously. It is good, very good, that FCA ask themselves some though questions. One cannot rely only on high performance vehicles for continuing financial health.
Losing profitability is only one oil crisis away.
Issue I see is that this 5 year plan will take more than 5 years to implement and then they come with another 5 year plan that over writes the old plan. Typical lack of corporate commitment.
Since the average vehicle program is (was) 48 months – though I may be out of date. A five year plan is quite reasonable to me. From concept to approval, through design and development, then production release; the replacement vehicle program will already be cued-up to go.
As far as commitment, once they reach 24 months from concept, that’s usually when they pull the plug if market conditions change. I had a boss who told me he worked on a Volvo (pre-Ford) project that went all the way to just before hard (production) tooling release, and then it was killed. He said everyone on the team was extremely dejected having put so much blood, sweat and tears into the project. I could see the sadness wash over his face when he talked about it.
Who really cares about Alfa-Romeo? I mean, seriously. Ego project written all over it.
“FCA lacks any sort of hybrid technology”
Toyota owns the market for this. Why spend hundreds of millions if not billions for mere hundreds of thousands of dollars in sales? People aren’t going to suddenly flock to Chrysler dealers if there is a hybrid Jeep or Dodge. Limited diesel offerings are the right move for FCA.
“lagging in the Corporate Average Fuel Economy rankings”
What will become a problem is the big incentives they will have to put on everything but Dart/Compass/Cherokee when oil is run up again. If somehow this does not happen, FCA is already in a good product position.
“The smart money is on the Chrysler Town & Country, with the Grand Caravan’s replacement taking the form of a three-row crossover”
I see what they are doing, but a van is actually somewhat fuel efficient for what it is. Building a bigger Journey and calling it Caravan isn’t exactly going to be a slam dunk, esp if mileage goes down vs the van. Better to keep the Caravan fleet only and milk it, IMO.
Additional: I’m not sure about how sales have been but Ford’s little Transit Connects seem to be everywhere, 9/10 in commercial use. Perhaps a slimmed down Caravan could work for commercial customers? Maybe a FWD only little Dodgelet built on whatever Fiat platform that new Jeep Renegade will use?
You have a good point. Chrysler has no advanced fuel cars and not enough resources to design something from scratch. Perhaps they can purchase advanced tech from someone else (Tesla? Toyota?)
One thing is for sure. Fuel is not going to get cheaper, and when it does go up (and it definitely will) Chrysler will be one of the worst affected.
That’s an interesting idea in purchasing tech, but if they go this route what they put it in has to sell like gangbusters in order to justify the cost. However as we agree, not doing anything leaves them exposed in an oil run up. I could see hybrid Jeeps, which will further turn on the CUV crowd and simultaneously irk the Jeep traditionalists.
A really high mileage minivan would be a killer. Don’t care how you do it, I believe the the people who buy minivans would pay extra for lower cost per mile. Some because they do the miles, others because they can’t do the TCO math.
This would be perfect. If they could offer a minivan that offers real world 30+ mpg that would be an automatic winner. Unfortunately, it seems like fuel economy improvements at Chrysler are limited to attaching Fiat MultiAir heads to everything.
I agree, I could see a high mileage minivan doing *very* well.
Women hate them. Remove the low-end torque that burns the extra fuel, and they’ll hate them even more.
The minivan is on the wane. They only make sense because they can share platforms, drivetrains and a lot of parts with other cars, so the marginal cost of offering one isn’t too high to make it prohibitive.
Women hate alot of things that make sense, but if a 30mpg city minivan were available they might have to give it a look when gas hits $4.50 and their AWD CUVs still return 16-17.
In theory, just about everybody wants good fuel economy.
But improved fuel economy comes at the expense of performance, which requires a compromise.
Automakers don’t provide Americans with their smallest engines because Americans don’t want them. The average car buyer would rather burn more gas and get a bit more grunt.
So share the hybrid/alternative fuel parts as well. They sell them now, they could sell a lot more with higher mileage. Prius sells after all.
Why haven’t they done this already (hybridized) to the Sienna or the loaded-as-you-like Odyssey?
I actually started thinking about it after I said it. Battery space prob, the whole point of a minivan is usable passenger room. Although I could see a hybrid van taxi, where you only use the middle seat anyway.
Seems like VW could be at the forefront of this, if they brought over a Sharan BlueMotion or a Caravelle (EuroVan) BlueMotion TDI (25mpg US city).
There are lots of fleet applications where the math will work.
I looked under my Sienna, and there’s more space under the floor than you’d think. The floor looks like a torsion box, and there is a lot of room between the supports.
I bet there’s room for a carefully packaged lithium ion hybrid battery down there, especially if you give up the spare tire the way you do for AWD in the Sienna. The battery couldn’t be more than about 4″ tallz but it could be as long and wide as you want, especially if you divided the battery into multiple sub-packs. You could even put it close to the CG.
I don’t want to downplay the engineering required to do it right, but there’s enough to work with down there that I wouldn’t dismiss the possibility of packaging hybrid batteries in minivans.
“for commercial customers? Maybe a FWD only little Dodgelet”
Fiat (Ram) Doblo will fill this role.
“Dodge’s customer base skews much younger, but its raison d’etre is flimsy enough that there has been talk of axing it now that the high-performance SRT brand has been spun off of it.”
Has anyone who is connected to the company said this, or is this just blogosphere speculation?
SRT is akin to M or AMG; it’s low volume, and is intended to serve as a margin builder and a halo.
The Dodge-Chrysler relationship is a bit muddy, but Marchionne is obviously fond of a niche branding approach. The creation of Ram makes that clear enough; he apparently believes that trucks and cars shouldn’t wear the same badge.
“Has anyone who is connected to the company said this, or is this just blogosphere speculation?”
No. Just internet speculation. Of course, anything can happen as has been shown with the Chrysler 100.
The reason why the Dodge-Chrysler relationship is muddy is because they are sold in the same store, along with Ram and Jeep (and sometimes Fiat). It’s all a bit arbitrary: “let’s call this one a Dodge.”
“The reason why the Dodge-Chrysler relationship is muddy is because they are sold in the same store”
The problem is that Chrysler is supposed to be a quasi-luxury badge, but nobody outside of Chrysler’s marketing department sees it that way.
It’sa our five-a year plan!
Chrysler: Add more LED’s to 300 fascia. Build same car forever.
Dodge: Phase cars to Chrysler line, down to Challenger and Charger*
Jeep: More CUV molto benne Fiat! Make GC more expensive, more LED’s, molto Summit!
RAM: Same truck + more labels, sugg: “RAM 1500 Quad Cab Lone Ranger Traveler Big Horn Cummins 4×4.”
Alfa: We have’a fourteen new model’a on the way. All value price’a, $67,000 with optional navigatione, no manuelle.
*Plus more special ed’s with paint color and stickers.
I could see a Lone Ranger edition doing well… or Lone Wolf.
How about a Walker Texas Ranger edition? The best special edition they never capitalized on.
The eyes of a ranger are upon you… wow its sad I remember that.
I love that show, it’s so dumb but it’s a lot of fun.
https://www.you tube.com/watch?v=f67LgpJBPPE
Doesn`t Dodge already have a 3 row CUV – the Durango?
Live by the V8, die by the V8.
Automakers have to adapt to the changing world if they want to survive. If they feel they have to keep addressing the needs of a very small, yet vocal, part of the marketplace; then they will be like the dinosaurs, something else that died out.
They have what 2 different V8s? And how many are standard? One? In the 3/4 ton +?
If people buy V8s that’s all profit, that’s the marketplace speaking, all of those V8 vehicle offer V6 as standard equipment, you seem to just have a vendetta against V8s for some reason.
Chrysler basically has two displacement versions (and a third small volume version on the way) of the same V8. They sell far and away more vehicles with the Pentastar V6, which has 3 displacement versions. They’ll be good to continue offering the V8 where buyers will take it as it’s a very low cost engine to build, but they do need more 4 cylinder options where the volume of the marketplace now is. This is where you’re going to see the development focus in the next few years.
I don’t have anything against V8s, far from it, I just recognize that Dodge has been known for Hemis and V8s since the 1960s.
Danio, hit the nail on the head when he said Chrysler, Dodge, Fiat, etc. have to have more four-cylinder options. They have to be able to make four-cylinder cars that are both fuel-efficient and good to drive.
While I do see that V8s make a profit, all I was saying is if that’s all you’re going to do, then your company will not last long as Ford and GM are starting to look at fuel-efficiency.
And for the record, the only V8 I’d want to own is the modular V8 that was in the S197 Mustangs (2005-2010), 300hp (crank) on regular gas. Sign me up.
Chrysler sells far more 6 cylinder models overall than anything else. The “Hemi” got a lot of marketing attention at one point, but it’s hardly all that the company does.
Also, the only V8 you’d want is a 3V modular Ford? *shudders*
LSX FTW.
“The Neverending Story” was and still is a great, very entertaining movie! Forget the sequels.
Huh? Oh, yes – the 5 year plan. I don’t give a hoot about Fiat or Alfa, but Chrysler still holds my interest. I guess it’s wait-and-see what happens.
I was just thinking over the weekend when seeing a very nice Town & Country, that the biggest service Chrysler could do for itself and its customers is to once again offer a SWB van. Problem solved.
I suspect that all of the “changes of face” by FCA in relation to Chrysler have stemmed from working out the bugs inherent to merging 2 companies. I suspect that Chrysler “old guard” were providing Fiat brass with inflated numbers. Once things were looked at more closely they had to make changes.
I do suspect that Dodge will be edged out the door. That has been rumoured since day one of the occupation er takeover.
The problem with the VM Motori diesel in the Ram is not so much the engine but the piss poor capabilities of the 1500 pickup. Ram is pushing the 1500 as a light duty truck and they are being honest but diesel pickup buyers expect some capability with that mpg gain. The best that one can get with a Ram crewcab 4×4 VM diesel is 1,234 lb. The same truck with a 5.7 is 1,452. At face value that may sound respectable but options kill the capacity. The same truck with all of the Laramie LongHorn fluff is down to 859 lb.
If one considers that this truck has 5 seats and us North Americans are a portly bunch, you and your golf buddies are going to overload the luxury pickup even before your golf bags go in the box.
I wonder if FCA will maintain its relationship with Cummins? I suspect that we will eventually see Iveco diesels replace the I-6 Cummins.
Adding doors to the Jeep Wrangler has been an excellent strategy. I see them all over. They have become the minivan replacement for young couples who want to send out the image: “yes we have kids but we haven’t given up on fun”.
I agree on the truck problem.
SOA is nice but makes no sense if it means the truck can’t be used as a truck. The 3.0 looks pretty awesome, and I’m sure it will sell but the payload turns a lot of prospective buyers away.
@Hummer – payload will kill it only to the buyers that pay attention to that sort of thing which will be probably 60% of truck buyers. My guess based on the fact that 1/2 of pickups are used for work.
Well we have to consider resale, that’s one area pickups always do well in. It needs to either work, play, or be modable after 15 years DD service. The best way to tell how well they will do is time, and failures.
The Chrysler and Dodge Brands have so many product holes in them. If recent history has taught us anything is that every Chrysler brand should be selling a small, medium and large crossover. The Dodge Journey isnt really all that competitive in its segment if you ask me, and a fresh sheet design would do wonders.
Fiat dealers need something besides the 500 and 500C to sell. A few other models and a roadster would be good.
Also, Alfa Romeo and Masarati need to product offensive in this country. If BMW, Mercedes and Audi have tought us anything, is that prodcing luxury cars and charging a premium for a badge is essentially a license to print money. All the wanna be ballers, social climbers and people with too much money need to be in play. The Germans get too much of that good thing, I think the Italians could do equally well on the brand image front, maybe not with Fiat, but definitely with Alfa and Masarati.
I wonder how the diesel Grand Cherokee is doing. The Liberty CRD apparently did pretty well its first year but then was legislated out of existence…
I looked at buying a Liberty CRD new in 2006.
I liked the diesel engine and how it drove. I loved it during the test drive.
The problem was that, by the numbers, it was inferior to the 1998 Ranger I owned at the time in every way except seating and towing capacities – neither of which were an issue for me at the time. My Ranger was much bigger, 1000lbs lighter, and was the MPG winner by a large margin, despite running a less powerful fuel. So, I kept my Ranger.
In order to make up for the inferior vehicle, the glossy brochures assured me that I’d be joining a muddy cult of some sort, and welcome to join their corporate-sanctioned muddy cult retreats. That wasnt too appealing, since I just wanted a well engineered efficient diesel vehicle.