On Tuesday, May 6, a group of Fiat Chrysler Automobiles’ senior leaders gathered in Michigan to discuss the company’s next five years with key investors. Hundreds of reporters were in another room at the headquarters, watching and listening to the presentations — which were not telecast or webcast outside the building. The presentation materials were, however, posted as they were shown in the meeting.
Brand summary: Jeep’s role is unchanged from recent years: it is the SUV brand, selling both off-road vehicles and on-road vehicles with all-weather capability. Wrangler is the image and capability leader; for all other models, there are less capable mainstream versions and one “Trail Rated” version that can handle moderate off-road use. Dodge is being turned into a performance/muscle brand, its vehicles being re-engineered as needed to fit the image Dodge already has anyway. Chrysler is continuing as “the new Plymouth,” but in the 1930s fashion — providing a premium product at a value price. Finally, Ram is building out its commercial-vehicle line by adapting two Fiat vans.
Jeep’s future product plan includes three new Jeeps, one of which was confirmed as being the Grand Wagoneer (though for most of its life, the original was simply called Wagoneer).
The chart shows both a refresh for Jeep Cherokee and a single replacement for the Compass and Patriot in calendar year 2016. The related cars, made in Illinois along with Dodge Dart, have gained at least a year of life.
The 2009 Five Year plan,
and as revised in 2012... Bill Cawthon asks: Can they do it?
Wrangler is to be completely re-engineered in 2017, along with Grand Cherokee; Grand Wagoneer starts in 2018, one year later. Several insiders have said that the new Wrangler would have a high-articulation independent suspension, as TJ mule Li’l Blue did back in the 1990s. The design risks alienating hard-core Jeepers; even if it is superior off-road to the current Rubicon, it will face resistance, particularly because it will not be as easy to modify.
There was no word of a Wrangler pickup, but Jeep may simply be keeping it secret. Grand Cherokee gets one more refresh in late 2015, before its complete re-engineering in 2017. Renegade will get a refresh in 2017.
Mr. Manley said that Jeep redefined its brand in 2009, as “capability plus driving dynamics and fuel economy.” Later, the brand was described as promising “vehicles that support a lifestyle of boundless freedom, responsible adventure and are reliable, safe, fun and environmentally friendly.”
For 2018, Mr. Manley predicted production of 1 million Jeeps in North America (where 5.9 million “UVs” are sold); Asia-Pacific production of 500,000 (with 8.2 million UVs sold); European production of 200,000 (with 5.1 million UVs sold); and Latin American production of 200,000 (out of 800,000 UV sales), centered in Brazil. Overall, for 2018, the company expects to sell 1.9 million Jeeps.
Helping expansion will be more dealers— by 3% in North America, by 24% in Europe, the Middle East, and Africa, by 29% in Latin America, and by a whopping 221% in Asia-Pacific. Most sales growth is to be in North America, followed by the Asia-Pacific region.
Core values were described as:
Again, they separated customers into doers and dreamers; the latter “want[s] authentic gear with the hope that one day they’ll be able to do more and dream less;” and, again, Mr. Manley separated the “iconic bookend Wrangler” from other Jeeps; all provide styling, function, and capability, but only Wrangler handles “extreme” off-road conditions. He also promised that all models would have at least one Trail Rated version. Trail Rating includes:
Until recently, Trail Rating appears to have included a test on the Chelsea replica of portions of the Rubicon trail, set up decades ago, just after AMC was purchased. The Renegade reportedly failed this test.
Not mentioned during this talk was the question of Chrysler in Europe — whether the brand will return, replacing Lancia outside of Italy; or whether individual Chrysler vehicles will be imported under the Fiat or other brands, as Freemont is.
Chrysler (the brand) is expecting sales growth — with projections of moving from 350,000 in 2013 to 800,000 in 2018, with the biggest gain coming in 2017. One path to growth will be adding mid-sized and full-sized crossovers, and compact cars.
The Chrysler 100 is back “on again.” The new mid-size crossover will take over Journey’s function as a “mini minivan,” and Dodge will re-focus Journey itself to be more in line with Dodge’s new image, just as Dodge will re-focus Dart to be consistent with the “brand DNA” once Chrysler 100 appears. (Chrysler 100 was later rumored to be on the SUSW — small US Wide — platform, not Dart’s CUSW — compact US Wide).
Chrysler’s stated key attributes are quality, design, craftsmanship, performance/efficiency, innovation/technology, and value — delivering substance and style, driven by innovation, craftsmanship, and quality, with value, built in North America.
Chrysler is, according to the presentation, “FCA’s mainstream North America brand,” “We offer a full line of exceptional and attainable vehicles for mainstream America.” The main competitors are Ford, Hyundai, Honda, Chevrolet, and Toyota. In short, Chrysler is now where Plymouth was in the 1930s and 1940s. Chrysler has only rarely (if ever) been a luxury brand akin to Cadillac; that position was for Imperial. In the early days, at least, Chrysler did provide the features and experience of luxury cars... at a “premium” car’s price.
The best year for the Chrysler brand was 2005, when it passed 801,000 sales. Sales fell precipitously in 2008, and continued to plunge in 2009, slowly recovering since then. From 2009 to 2013, Chrysler increased its minivan market share from 20% to 24% (albeit partly or largely at the expense of Dodge), its large-car share from 8% to 10% (despite a higher-priced base model), and its mid-size cars from 1% to 5%. Global sales have gone from 225,000 to 350,000, with slightly higher (3 points) customer consideration and brand loyalty (7 points).
One amusing slide, titled “internal brand turf war” for the volume mainstream customer, depicted the Caravan vs Town & Country, Avenger vs 200, and Charger vs 300, with the Dodges in red and Chryslers in white. No solution was provided for Charger vs 300, but another slide showed that only 20% of shoppers considered both.
The SRT brand is being dropped as a standalone, and Viper is returning to Dodge, with a 2015 refresh and projected sales through 2018.
Dodge CEO Tim Kuniskis said that it was time to “purify” the Dodge brand, and get back to “our roots” (Dodge Brothers’ roots are in an extremely sturdy and somewhat slow car; however, one can cut off the roots at, say, 1968 and go from there.)
The brand purpose of Dodge was stated as, “We want people to actually use their car for what the car was built to do.” The new performance image should be enhanced by the return of the Viper.
Dodge attracts younger buyers — six years younger than the non-luxury average, ten years younger than Chevrolet, nine younger than Ford, eight younger than Toyota, even five years younger than Honda.
For the first time, an official photo of the 6.2 liter supercharged Hemi V8 was shown, acknowledging that the long-rumored engine is coming.
Dart was originally positioned as a European-style sports car, with good handling but relatively weak engines. For 2016, the powertrain will be upgraded with the new Chrysler 2-liter turbocharged engine and a base 2.4; the driving dynamics will be enhanced, and its position as a very large compact or very small midsize car will be “leveraged.”
The new Chrysler 100 will take over the “small family car” segment from Dart, competing against Corolla and such while Dart goes after a more specialized audience.
Likewise, Dodge Journey is to be refocused to be more “Dodge-like,” while Chrysler will handle the mini-minivan aspects of the current Journey with a new mid-sized crossover. The Journey is also getting a turbocharged engine (front wheel drive only), in addition to the base model with front drive or AWD.
As Chrysler steps in as “the new Plymouth,” it is reserving the mass-market “people mover” and “commuter car” segments for itself, freeing Dodge to focus on the muscle-and-performance crowd.
SRT is being dropped as a separate brand; it will return to being a trim designation under Dodge and, apparently, Jeep. The one vehicle “owned” by SRT was the Viper, which will once again be called Dodge Viper. It’s due for a refresh in 2015.
Some questioned the fate of the SRT versions of the Grand Cherokee and 300C, as brand leadership is being given to Dodge chief Tim Kuniskis; it was previously headed by Ralph Gilles, who will continue his dual role as head of design and motorsports. Mr. Gilles tweeted (in reply to a Twitter comment that SRT was dead) that SRT was “not dead at all” and would “get the resources it deserves.”
According to Detroit News, the popular and profitable SRT Jeep Grand Cherokee will continue in production, but the SRT 300C will be dropped. This has not been confirmed but seems reasonable.
Dodge’s growth predictions for 2018 are relatively modest, compared with Chrysler and Jeep: the brand expects to rise from 596,300 cars in 2013 to 600,000 in 2018. This includes a drop in 2014 and slow growth through 2018, despite the addition of new cars.
As noted earlier, Journey and Dart will be refreshed and refocused in mid-2016 — with SRT versions, set for launch in December 2016 and January 2017, respectively. The refresh is likely to include a new turbocharged four cylinder, the “Hurricane engine” which appears to be a mix of Tiger Shark and Pentastar engines. It may come in two versions, 240 hp standard and 300 hp max; at the moment, Dart tops out at 184 hp. However, it is not due until around calendar-year 2017.
Durango, expected by many to be dropped once Wagoneer arrived, will continue, with a refresh scheduled in January 2017.
New Challengers and Chargers are due in late 2018, including SRT versions — coming in July and December, respectively. These will be the first completely re-engineered large cars in many years.
A subcompact Dodge car, available as either sedan or hatchback, is now slated for January 2018; this is likely to be based on a Fiat design.
Missing from the plan is any mention of the much-rumored mid-sized rear wheel drive car, which Sergio Marchionne said was needed to justify Alfa Romeo’s new mid-sized cars. However, Allpar still expects to see it — timetable unknown.
According to Chrysler brand CEO Al Gardner, the Chrysler-Dodge turf war is being ended, partly by killing off the Dodge Caravan and Avenger so Chrysler can take those segments for itself. Chrysler will, in essence, stand for “ambitious American ingenuity,” (quote via Dave Versical).
300 and Charger will continue; cross-brand competition is low in that segment. Chrysler has already sacrificed the base model cloth-seat 300, losing some customers to Dodge but increasing its resale value.
Chrysler will also launch two plug-in hybrid-electrics, in 2016 and 2017: the Town & Country and a closely related crossover (the standard gasoline versions will remain available).
Allpar has been predicting the loss of Caravan for at least a year, based on Mr. Marchionne’s statements and the high proportion of Caravan sales to fleets. With Caravan and Town & Country racking up similar sales, but Town & Country having much higher sticker prices and a greater proportion of retail sales, once the decision was made to have one minivan, which one would remain seemed obvious; Caravan does not fit into the new Dodge “muscle” image.
Fuel economy is, according to customer surveys, the primary driver among light-duty pickup buyers, and is where Ram has a major advantage now.
Ram CEO Reid Bigland noted that Ford’s market-share peak was 48% in 1987, GM’s 51% in 1992; but Ram’s peak is 22%, in 2014 (year to date), with Ford at 34% and GM at 37% so far. Ram’s key market growth period was 1993-95, when the first new Ram 1500s were launched (and factories then geared up for higher production over two years).
In Canada, Ford has 39%, GM 26%, and Ram 30%, year-to-date 2014. For all of 2013, GM still led Ram.
Ram has the lowest average age of the “big three” pickup makers (52 vs 58 at Ford and 59 at GM), and the highest household income of buyers ($91,000 versus $85,000 at Ford and $77,000 at GM).
To grow, Ram Commercial is establishing 900 commercially-focused dealers through BusinessLink. The company’s aggressive update schedule is continuing, with the Ram 1500 getting yet another refresh in 2015 (for the 2016 model year), then another major update in 2017. The heavy duty line, only recently updated, will get another minor update in 2016. The chassis cabs will be updated in 2016, and “commercial light duty” vehicles (ProMaster?) will get a major update in 2017.
Ram’s volume goals are to go from 463,000 in 2013 to 620,000 in 2018, almost entirely with American and Canadian growth. The brand is only sold in the US, Canada, and Mexico.
For the first time, Ram has shown the face of its version of the Fiat Doblo, and officially associated with the name “ProMaster City.”
The Fiat Doblo was recently redesigned. Past statements by Chrysler leaders indicated that ProMaster City would be made in Turkey, though this may have changed. An early press release suggested that it would have an American powerplant.
See our Fiat Group Five Year Plan summary.
Longtime Chrysler manufacturing veteran Scott Gaberding was chosen to discuss FCA’s global architectures and standardization.
He pointed out that the compact-wide architecture is used by a broad range of products: Alfa Romeo Giulietta, Fiat Viaggio, Dodge Dart, Chrysler 200, and Jeep Cherokee. Both share steering, but Dart and Cherokee have different rear suspensions: twist beam in Dart and multi-link in Cherokee. Common architectures make parts sharing possible but not mandatory. The challenge of a common architecture, he said, was its flexibility — without reducing the capability of products at either end of the range.
FCA’s top four architectures are used in 48% of its vehicles; in 2018, the plan is for them to cover 70% of vehicles. FCA had 18 architecture families in 2013; 95% of volume came from 12 of them. The plan is to reduce that number to 15 total families in 2018, with 95% of volume coming from nine of them. This should increase development speed, quality, and manufacturing flexibility, while cutting costs.
Likewise, standardized component families can be used across many architectures. He looked at the difference between a cross-car beam, used by all compact-wide cars, and a switch which can be used by just about any vehicle. His goal is to reduce the number of part families from 1,200 to 550 by 2018, to slash development costs and to increase volume discounts, saving 1.5 billion euros ($2 billion) by the end of 2018.
Mr. Gaberding said that weight reduction had the largest impact on city mileage, followed by tire drag; aerodynamics are the largest player in highway mileage, followed by tire drag.
Mr. Gaberding summarized by saying that their goals are:
Long-time Chrysler engineer Bob Lee, now head of powertrain integration for Fiat Chrysler (FCA), started by pointing out that carbon dioxide rules will be getting tighter through 2025 — and that customer preferences are increasingly favoring lower-CO2-emissions vehicles.
Chrysler had to purchase CO2 credits in the U.S., due to their model mix — in particular the high sales of Rams relative to fuel-efficient cars. Chrysler will need higher sales of cars like Dart, Chrysler 100 and 200, and the upcoming hybrid minivans to counter increasing Ram sales; though the high mileage of the Ram 1500 diesel may be helping. Some other ways the company is dealing with fuel efficiency and CO2 emissions are:
For now, he said, the best bank for the buck was to be found in transmissions and advanced engines, along with stop-start systems and electric power steering. When it comes to fuel consumption, diesel provides around the same “bang for the buck” as natural gas and hybrid technology, but does less for carbon dioxide emission.
More than three million Pentastar engines have been made over the last four years. Mr. Lee promised more consolidation and improvement on large and specialty engines, saying that the technologies and benefits will be more substantial than cylinder deactivation was in 2003.
A new portfolio of small gasoline engines (which we understand are being developed primarily by Fiat) will share cylinder geometry and combustion systems for higher efficiency. It will include an integrated water/air charge cooler and exhaust manifold, low-friction chain drive, belt starter-generator for stop-start, variable-displacement oil pump, lightweight crank, aluminum block, MultiAir valvetrain, direct fuel injection, low-friction roller cam, variable-flow water pump, cooled EGR, and twin-scroll turbocharger. (Most of these technologies have also been rumored for the 2-liter Chrysler Hurricane four-cylinder).
Summarizing, Mr. Lee reiterated the company’s position that it will continue to expand diesel and build on CNG where the latter is supported; that customers are increasingly demanding lower-CO2-emission vehicles; that engine displacements are falling; and that electrification has been overblown, but that they will still build a plug-in hybrid minivan in 2016, followed by several mild hybrids.
Also see: Can they do it? • Plan by Region • Fiat Group 2014-18 • 2009 Plan • 2012 Plan • Upcoming Chrysler vehicles • 2015 • 2016
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