Fiat Chrysler Lays Out Growth Plans
The combined Fiat Chrysler Automobiles is counting on expanding sales at Jeep, Alfa-Romeo and Maserati and a revival of the Chrysler brand to place it firmly in the top ranks of global automakers.
Italian automaker Fiat SpA and Chrysler Group, which formed a partnership five years ago and officially combined when Fiat finished buying Chrysler in January, jointly presented their future sales targets and product plans Tuesday in a day-long meeting at Chrysler’s Michigan headquarters.
There are many new products, including a full lineup of cars from Alfa-Romeo, as well as some victims. Jeep is ditching the Compass and Patriot small SUVs in favor of a new compact SUV that will come out in 2016. And after 30 years on the market, the Dodge Grand Caravan minivan will be killed off in an effort to focus Dodge on performance cars and boost sales of the Chrysler Town and Country.
While the company won’t officially be known as Fiat Chrysler Automobiles until a Fiat shareholders meeting this summer, the 400 analysts, media and other attendees at Tuesday’s event were welcomed by a sign with the new company name at the entrance to Chrysler’s sprawling campus north of Detroit.
Shares of the combined company are expected to begin trading jointly on the New York Stock Exchange and in Milan, Italy, by the end of this year.
Fiat Chrysler wants to grow sales 60 percent to more than 7 million cars and trucks by 2018. The companies sold 4.4 million cars and trucks last year, compared with 6.3 million for Detroit rival Ford. Toyota was the global leader with sales of 9.98 million vehicles.
“Today we stand before you as a global carmaker,” Fiat and Chrysler CEO Sergio Marchionne said. “Today is much more than a new chapter. We are beginning to write a completely new book.”
Marchionne, 61, said he expects to remain CEO through 2018 to make sure the plan gets delivered.
Fiat Chrysler Chief Financial Officer Richard Palmer said the company expects revenue to rise around 9 percent per year, from $121 billion in 2013 to $184 billion in 2018. Net income should reach $7 billion, or $5.57 per share, by 2018. The company doesn’t plan to pay a dividend before 2018, he said.
Among Fiat Chrysler’s plans:
- Chrysler will become the mainstream brand for North America, designed to compete with Toyota and Chevrolet. The Town and Country minivan will get an update and add a plug-in hybrid version in 2016. A new compact car, the 100, arrives in 2016. A year later, a full-size crossover will be launched to compete with the Ford Edge and Nissan Murano. The crossover will also come in a plug-in hybrid version.
- Dodge will lose the Grand Caravan and the Avenger sedan and concentrate on being a sporty, performance-oriented brand designed to appeal to younger buyers. The SRT brand, which includes the Viper sports car, will be consolidated with Dodge and considered the “halo” of the Dodge brand.
- Alfa-Romeo, which returns to the U.S. this year with the 4C sports car, plans to introduce eight vehicles globally by 2018, including small, midsize and full-size cars and two SUVs. Alfa CEO Harald Wester says the company will invest nearly $7 billion to develop and make the new vehicles, which will be positioned as direct competitors to BMW and Mercedes-Benz. Alfa hopes to increase sales from 74,000 in 2013 to 400,000 in 2018.
- Jeep sales are expected to top 1 million this year, and can grow to 1.9 million by 2018 with an aggressive global expansion, particularly in Latin America and Asia, the company said. A new compact SUV in 2016 will replace the Compass and Patriot, and the seven-passenger Grand Wagoneer will launch in 2017. Jeep currently makes vehicles at three plants in the U.S. By 2018, it expects nearly half of all production to come from plants in Latin America, Europe and China.
- Fiat brand sales are expected to grow from 1.5 million in 2013 to 1.9 million in 2018. New vehicles will include a subcompact car and compact pickup truck for South America in 2015, the Fiat 500X crossover for North America in 2015 and a new Panda small car for Europe in 2018.
- Maserati, which sells four cars now, will have six by 2018. As a result, Wester expects sales to grow from 15,400 in 2013 to around 75,000 in 2018. Sister luxury brand Ferrari expects sales to stay around 7,000, but could rise to as many as 10,000 if demand increases. “There are increasing numbers of people who can afford a car of this caliber,” Marchionne said.