Chrysler's Survival Plan - Avoid Going Broke?

[robertlane]

Thoughts on FCA's future success?

 

FCA has to bet on Jeep and Ram because it's really all that they have. Alfa's plan to add water and instantly become an Audi or BMW isn't panning out and is once again delayed until 2020.

 

Product changes under the revised plan include increasing production expectations of Jeep from 1.9 million to 2 million through 2018, while reducing its product investment and focus on Alfa Romeo.

 

The original plan was to invest 5 billion euros ($6 billion) in Alfa for eight new models to spur sales from 74,000 in 2013 to 400,000 by 2018. The first of those products — the Giulia midsize sedan — is expected in dealership later this year after months of delays.

 

The planned product portfolio for Alfa Romeo under the new plan will be completed by mid-2020, with focus on Europe and North America. The presentation does not outline sales expectations for the famed luxury brand. - article.

 

 

FCA's Chrysler and Dodge entry level models are not selling, so step 1 is moving production to Mexico with step 2 being to outsource their manufacture, maybe to the Austrians?

 

Fiat Chrysler Automobiles wants to stop making its compact Dodge Dart and the midsize Chrysler 200 for the United States over the next several years, Chief Executive Sergio Marchionne said on Wednesday.

 

The company wanted to continue to have a U.S. presence for those cars with partners, Marchionne said on a conference call to update Fiat Chrysler's five-year plan through 2018.

 

He said the shift in demand for SUVs and pickup trucks and away from passenger cars dictates that if the company wants to be profitable, it must realign its U.S. production. - article.

 

 

Is their consistent and new-found strategy to increase Jeep and Ram production going to be under intense pressure due to emissions concerns?

 

To comply, FCA must improve faster than bigger and richer rivals who also are straining to cut emissions. Failing that, it might be forced to stop building some of the light-duty trucks Bloomberg Intelligence analyst Kevin Tynan says deliver 90 percent of its profit. Or, to keep making them, it could be forced into a merger.

 

“FCA doesn’t have the resources to fulfill the emissions requirements,” said Maryann Keller, an independent auto-industry consultant in Stamford, Connecticut. “It’s not a company that can survive in its present form.” - article.

 

 

With FCA not positioning themselves as a technology company, will they or in fact are they falling behind?

 

Unlike General Motors' CEO Mary Barra, Marchionne isn't pitching FCA as a technology company, although he insisted on the call that FCA is investing an appropriate amount to keep pace with industry changes. - article.

 

[bzcat]

1. Alfa plan was ridiculous and now just less ridiculous but still ridiculous nonetheless. It was totally absurd to think Alfa would have a full lineup by 2017 including large sedan and SUV competitors to Maserati. Now it is safe to assume that Alfa will not grow beyond the midsize SUV (and correspondingly, Maserati will not grow beyond the current 3 large cars + 1 SUV plan)

 

2. Jeep Wrangler and Ram are going more diesel and hybrid. So I assume that means FCA will invest in some type of electrification. But remains to be seen whether they will meet their CAFE reduction goal. Certainly will be even tougher if they decide to marginalize their car business.

 

3. Which partner is sucker enough to take Sergio's bait? Hey we give you access to CUSW platform but you have to make 300k cars for me to sell to Enterprise! Deal?

[robertlane]

1. Alfa plan was ridiculous and now just less ridiculous but still ridiculous nonetheless. It was totally absurd to think Alfa would have a full lineup by 2017 including large sedan and SUV competitors to Maserati. Now it is safe to assume that Alfa will not grow beyond the midsize SUV (and correspondingly, Maserati will not grow beyond the current 3 large cars + 1 SUV plan)

 

2. Jeep Wrangler and Ram are going more diesel and hybrid. So I assume that means FCA will invest in some type of electrification. But remains to be seen whether they will meet their CAFE reduction goal. Certainly will be even tougher if they decide to marginalize their car business.

 

3. Which partner is sucker enough to take Sergio's bait? Hey we give you access to CUSW platform but you have to make 300k cars for me to sell to Enterprise! Deal?

 

Getting into the segment that Alfa wants into is packed full of great entries from Audi, BMW, Lexus, etc. Alfa is going to have a tall order.

 

Their parnter would be Austrian Magna

[bzcat]

 

Getting into the segment that Alfa wants into is packed full of great entries from Audi, BMW, Lexus, etc. Alfa is going to have a tall order.

 

Their parnter would be Austrian Magna

 

FCA is not exiting car business in Europe or South America so we are talking about selling cars in North America. Magna doesn't have NAFTA production site do they? Whomever agree to do this for FCA will have to do it somewhere relatively low cost so the cars can enter the US market at competitive price point - i.e. not Austria where Magna has its production facilities.

 

There are only a handful of possibilities:

 

1. Renault-Nissan: Does Carlos have any spare capacity in Korea?

2. Mitsubishi: They will probably be interested in taking over the carcass of CUSW platform for their own purpose but they are shutting down their US facility so it will be sourced from... Thailand? Do they have a spare 750,000 unit plant just sitting idle there?

3. GAIC: Sergio already sold the old Alfa 166 platform to them and GAIC Jeep JV operation is ramping up. Maybe GAIC will be interested in an actual cash transaction to buy the CUSW IP? Chinese made Chrysler is less offending than Chinese Cadillac if you are mainly selling to Enterprise... right?

Edited January 27, 2016 by bzcat

[PREMiERdrum]

 

FCA is not exiting car business in Europe or South America so we are talking about selling cars in North America. Magna doesn't have NAFTA production site do they? Whomever agree to do this for FCA will have to do it somewhere relatively low cost so the cars can enter the US market at competitive price point - i.e. not Austria where Magna has its production facilities.

 

There are only a handful of possibilities:

 

1. Renault-Nissan: Does Carlos have any spare capacity in Korea?

2. Mitsubishi: They will probably be interested in taking over the carcass of CUSW platform for their own purpose but they are shutting down their US facility so it will be sourced from... Thailand? Do they have a spare 750,000 unit plant just sitting idle there?

3. GAIC: Sergio already sold the old Alfa 166 platform to them and GAIC Jeep JV operation is ramping up. Maybe GAIC will be interested in an actual cash transaction to buy the CUSW IP? Chinese made Chrysler is less offending than Chinese Cadillac if you are mainly selling to Enterprise... right?

Wait... you're suggesting China may PAY for IP?

 

Hahahahaha....

 

(Wipes tears from eyes)

 

Hahaha....

 

(Snort)

 

Ha.

[Ron W.]

Love the title of the thread, but shouldn't it have the word AGAIN at the end ?

[AlRozzi]

 

Sadly Fiat now has access to Chrysler's cash for use in Europe.

[RichardJensen]

Sadly Fiat now has access to Chrysler's cash for use in Europe.

 

It would not be good for your blood pressure to know the debt Fiat incurred in order to buy out the UAW's share of Chrysler, to enable them to help themselves to cash from NA.

[blazerdude20]

 

It would not be good for your blood pressure to know the debt Fiat incurred in order to buy out the UAW's share of Chrysler, to enable them to help themselves to cash from NA.

But that's future money. This is money we can spend now. :/

[jpd80]

How many times can Chrysler get sucked dry by owners bent on rape an pillage.