Weekly News Review | 4 June 2018 | Automotive Purchasing and Supply Chain Automotive Purchasing and Supply Chain

Talking Point

Jeep and Maserati to flourish as Marchionnne’s exit nears?

Due to deadline pressure, I’m writing this column the day before Fiat Chrysler Automobiles’ major strategy announcement on June 1st. However, no-one will be surprised if the statement contains news of the company’s intention to bet its future on Jeep and Maserati rather than its eponymous brands. FCA’s 65-year-old Chief Executive, Sergio Marchionne, is scheduled to retire next year and his legacy will see Fiat withdraw from the North American and Chinese markets and Chrysler’s confinement largely to the U.S.

Fiat’s demise in North America will not come as too much of a shock. The brand has never really established itself there - sales in the U.S. in April this year were only 1,404 units - and older readers may remember the old joke about what the acronym FIAT was supposed to stand for - Fix it again Tony. Mind you, I can think of a few other brands which are well-respected today and which suffered from reliability problems in the past. Fiat will continue to be a player in Brazil where FCA has a huge assembly plant in Betim near Belo Horizonte and it is still the company’s mainstream brand outside North America.

Chrysler, on the other hand, has long been a mainstream North American brand whilst never really establishing itself anywhere else. In the UK, for instance, you still see a few Chrysler 300s, a car far better suited to American freeways than to narrow London streets, and even the occasional PT Cruiser, in the eyes of this writer one of the ugliest cars ever produced. It’s fair to say, however, that you will wait quite a while before seeing the next one! Chrysler’s market share in the U.S. has been languishing at around 1% and it appears to be sorely in need of some new models if it is not to go the way of brands such as DeSoto and Plymouth.

Marchionne’s decision to focus on Jeep is, however, entirely logical. Is there anyone in the world who does not have a soft spot in their heart for this brand? First produced during World War Two and reputedly named after the military expression General Purpose or GP - try saying it fast - the brand is the world’s oldest existing SUV and accounts for over 70% of FCA’s profits. Marchionne sees the brand’s global volume doubling by 2022 as it further expands its presence in Asia, Brazil and Europe. Perhaps it will become Sergio’s legacy.

Sam Ogle

Sam Ogle

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