Sergio’s Challenge: Build Jeep Into FCA’s Top Global Brand By 2018
Auto analysts are skeptical that Sergio Marchionne, the hyperbolic chief executive of Fiat Chrysler Automobiles, can meet his most ambitious goal: to nearly double Jeep’s global sales over the next four years, reported Reuters. Marchionne reiterated his aggressive target for boosting Jeep’s annual volume to 1.9 million, while pacing the floor of the New York ... Read More »
Auto analysts are skeptical that Sergio Marchionne, the hyperbolic chief executive of Fiat Chrysler Automobiles, can meet his most ambitious goal: to nearly double Jeep’s global sales over the next four years, reported Reuters.
Marchionne reiterated his aggressive target for boosting Jeep’s annual volume to 1.9 million, while pacing the floor of the New York Stock Exchange on Monday during the newly merged company’s first day of trading.
That’s nearly 700,000 vehicles more than the average of analysts surveyed Tuesday by Reuters, who believe FCA is more likely to boost Jeep volume to just over 1.2 million by 2018, from a projected 1 million this year.
“I have all the best intentions” of hitting the 1.9 million mark, Marchionne said in an interview Monday with Bloomberg TV. “We may even blow through it.”
Counters longtime auto analyst and consultant Maryann Keller: “Realistically, he’s not going to make the numbers.”
Even if Jeep realizes only the more modest growth projected by analysts, it still is likely to emerge as the company’s largest brand, accounting for 25 percent or more of total volume. Marchionne is expecting FCA sales to reach 7 million by 2018; analysts are expecting 5.1 million.
The success of FCA’s Jeep growth strategy hinges not on a huge expansion of the brand’s product portfolio, but rather on an expansion of its manufacturing and sales presence outside North America, Jeep’s traditional stronghold since its post-World War II metamorphosis from military to civilian use.
FCA currently builds five Jeep models in four U.S. plants and is just adding a sixth model, the Jeep Renegade subcompact, in Italy. The Renegade is slated to go on sale in North America early next year.
Four years from now, the plan is to build six models in six countries. That includes two plants in China that are scheduled to open in 2015 and 2016, with a combined annual production capacity of 500,000, or roughly one-quarter of Jeep’s projected global volume.
Future Jeep models include only one other addition to the portfolio: A luxurious seven-passenger flagship in late 2018 that will revive the Grand Wagoneer name.
The Compass and Patriot compacts will be replaced by a single model in 2016, with redesigns of the Grand Cherokee and the Wrangler slated for 2017 and 2018, respectively.
Barclays Capital expects Jeep sales to reach 1.4 million by 2018. Whether Marchionne can hit the higher target depends “less on flooding the U.S. market with more Jeeps and more with taking an iconic brand global,” Barclays analyst Brian Johnson said in an interview on Tuesday.
While FCA expects to increase Jeep sales in Europe and Latin America, the real prize remains China, where the company continues to lag behind most of the major multinational automakers. Marchionne wants to leverage projected double-digit growth in SUV demand among Chinese consumers.
The brand’s re-entry into China “will provide Fiat with a turbo boost” to growth in that market, said Richard Hilgert, an analyst at research firm Morningstar.
Marchionne agrees that “our big future” is in China.
But FCA and Jeep “aren’t the only ones trying to grow” outside North America, said Jeff Schuster, senior vice president of forecasting at LMC Automotive, which expects global Jeep volume to reach 1.2 million in 2018.
Considering the swarm of new competitors coming, especially in the compact SUV segment, Schuster described Marchionne’s target for Jeep as “unrealistic” and “a very, very difficult road.”
More Industry

Pennsylvania Dealership Under New Retailers
The sale of the Chrysler Dodge Jeep Ram store puts a family auto group on a leaner path as first-time dealers take the helm.
Read More →
Battery Storage Takes Priority Over EVs
U.S. automakers are prioritizing battery energy stationary storage over electric-vehicle production as the consumer demand for EVs lags the rest of the world.
Read More →
Auto Dealers Feel Better But Not Great
A second-quarter Cox Automotive poll of franchised retailers and independents found better views of the current market after a good spring but anticipation of third-quarter storminess.
Read More →
New-Vehicle Sales Picture Relative
A May forecast is complicated by last spring’s trade tariff effects on auto retail. Despite continued hard realities, many consumers took advantage of ways to bite the bullet.
Read More →
Auto Group Acquires Third Nissan Rooftop
Iowa-based Coleman Automotive Group recently acquired its seventh dealership, McGrath Nissan, which it renamed Nissan of Elgin.
Read More →
April Less Affordable
Based on prices, reduced incentives and slower household income growth, consumers found it more challenging to buy new last month, Cox Automotive reported.
Read More →
Building an Extraordinary F&I Agency
Work to determine your specialized talent, because that fact will determine everything about your agency’s future.
Read More →
Recipe for Compliance
The secret to both amazing barbecue and compliance is the same: understanding the basics and committing to a process.
Read More →
EVs Getting More Attractive
A growing percentage of U.S. consumers are open to switching and fewer are adverse to the idea, according to a recently completed survey. That’s despite the end of a tax break.
Read More →
EV Sales Drop in April Following Surge
North American electric-vehicle sales were down 28% year-over-year, a sharp contrast from global EV sales growth of 6%.
Read More →