Fiat Chrysler Automobiles Delayed The Redesign Of A Dozen Vehicles
Over the course of the last year, Fiat Chrysler Automobiles has purportedly delayed the redesign or release of at least 12 current or new vehicles in North America.
Citing suppliers familiar with the company’s plans, Reuters is reporting that the large number of delays could possibly stem from the automaker’s desire to defer billions of dollars in investments while it searches for a new partner. FCA chief exec Sergio Marchionne has said in the past that he favors consolidation, which would save on capital put toward the creation of overlapping engines and vehicles. Last-minute design and engineering changes are also among suspected explanations for the delays.
The list of program postponements mentioned by the sources is long. It includes the redesigned Ram 1500 delayed from mid-2017 to November 2017, the redesigned Jeep Wrangler delayed from early 2017 to July 2017, the redesigned Jeep Grand Cherokee delayed from 2017 to 2018, the Jeep Patriot/Compass replacement delayed six months from an original launch date in the spring of 2016, the redesigned Dodge Dart delayed from mid-2016 to 2019/20, the redesigned Charger delayed from mid/late 2018 to 2019, the redesigned Challenger delayed from mid/late 2018 to 2019, and the redesigned Chrysler 300 delayed from mid/late 2018 to 2019.
The supposed delays contradict a five-year, $50 billion plan outlined in May of last year, which also included boosting annual global sales to 7 million by 2018, up from 4.75 million sold last year.
FCA declined to comment on specific model delays, instead telling Reuters that the 2014 plan was “a five-year snapshot” of the company’s strategy going forward.
“Those plans need to be flexible and fluid, with the potential to add some vehicles, pull some forward and extend the life cycle of others. We look at these programs on a vehicle-by-vehicle basis,” the company said.
Continue reading for the full story.
Why it matters
Just as a little background, Fiat Chrysler Automobiles was established in 2014 when Fiat S.p.A merged into a new Netherlands-based holdings company headquartered in London. Here in the states, it operates as the subsidiary FCA US (previously Chrysler LLC), and controls a variety of marques, including Alfa Romeo, Chrysler, Dodge, Fiat, Jeep, Lancia, Ram Trucks, Abarth, Mopar, and SRT. It also owns Ferrari and Maserati. It’s currently the seventh-largest automaker in the world.
Despite its size, FCA still appears to be looking for an industry partner to support its efforts.
Despite its size, FCA still appears to be looking for an industry partner to support its efforts. However, the delays are particularly troubling with regards to the Ram 1500 and Jeep Wrangler, as according to industry analysts, sales of pickups and utility vehicles account for over half of the company’s pre-tax profit. Meanwhile, FCA’s cash and marketable securities fell by 1.1 billion euros ($1.2 billion) between December 31, 2014, and March 31, 2015, while its debt rose from 7.7 billion euros to 8.6 billion euros.
However, it isn’t all doom and gloom for the auto behemoth. The supplier sources also point out that the Alfa Romeo brand may be getting more models on an accelerated schedule.
The delays come at a fragile time for FCA. The industry is plagued with recalls across the board, while slowly rising auto sales are in hot contention.
Still, the delays come at a fragile time for FCA. The industry is plagued with recalls across the board, while slowly rising auto sales are in hot contention.
Marchionne’s solution? Further consolidation. According to the New York Times, the FCA boss emailed GM’s CEO Mary Barra with a merger proposal late last month. Barra rejected the idea, and some claimed the proposal was a show of weakness. Marchionne, however, maintains that such moves are necessary for all makes in an industry where overlapping engines and vehicles amount to rampant waste.
"It’s fundamentally immoral to allow for that waste to continue unchecked," Marchionne told the Times.
It’s not an altogether surprising position given Marchionne’s involvement in the creation of FCA.
Do these delays indicate that the company is beginning to flounder, or will it emerge stronger than before? Will it swallow up further marques along the way? We’ll have to wait to find out.