With a $ 4.35 billion deal, FIAT Group took full control of Chrysler in January 2014 and announced the soon-to-be created FCA, the FIAT Chrysler Automobiles holding company. Thanks to a huge PR campaign, the news shook the markets and generated a shy optimism all around. In such a weak economic situation, the birth of the world’s 7th largest auto group is not a humble thing; it could represent one of the major tiles for a European sales recovery in the next three quarters.
Two months have passed from those days and FIAT Group has chosen one of the most important stages for the automotive industry to present its master-plan: Geneva Motor Show. The world famous Salon International de l’Auto, held in the Swiss town March 6th to March 16th this year, is always the home of the ambitions, desires and promises of the automotive industry, and all of these can be found in FIAT’s showcase for this year’s event. Core of the Italian mission in Switzerland was the presentation of the first Jeep of the ‘tricolore’ era, the Renegade. This tiny, high tech SUV was clearly designed to appeal to the young generations, half way between an adventurous and a more “urban” kind of customer. “The all-new 2015 Jeep Renegade expands the brand’s portfolio”, Mike Manley, Jeep’s chief executive, said in a recent statement on Forbes; “…and targets the rapidly expanding small SUV segment around the globe”. I would like to add here, “and expands FIAT’s horizons”, or at least wants to represent an ambitious starting point for a new era.
Many reasons lie behind this possible expansion in the next future. First, the young Renegade will be produced at the Melfi plant in southern Italy, making it the first Jeep to be produced totally outside the USA. This may be something, considering that Jeep is a world-recognized American symbol, and sells two-thirds of its vehicles in the States. Second, the small SUV is part of a $ 1 billion investment recently “whispered” by FIAT’s CEO, Sergio Marchionne. FIAT’s CEO is the artful surgeon behind all the company’s moves in the last years, the one who made the acquisition of Chrysler possible indeed. Firm hand with all the stakeholders, expansion in the fast growing markets and huge investments are the three pillars of Marchionne’s recipe for FIAT’s new expansion. The development plan, which will be unrolled in May, and is about to bring FIAT producing cars in Serbia and Brazil by 2015 and China by 2016, shows it all. Moreover, Fiat Chrysler Automobiles’ new model, along with the new 500 X, which will be also produced in Melfi together the Renegade, should help the car-maker reach the ambitious sales target of 1 million vehicles this year.
Will all this be possible? Basically everyone is wondering about that. Even though Jeep is a strong brand, analysts are quite cautious about that target, which would represent a +37% jump from 2013 figures. It is true that there’s some optimism around the automotive industry in the Old Continent about the next 24 month forecasts, but maybe this might be too high a jump. Making huge volumes with cars that are conceptually built for the American market won’t be an easy thing. As recently reported by Reuters and by many automotive industry focused magazines, Jeff Schuster, senior VP of forecasting at LMC Automotive, said that Jeep will hit 1 million in sales by 2020, but not this year. “All the planets would have to perfectly align, even those we don’t yet know about”, he said, “…to hit the target in 2014”. Also Jeep’s Head of Brand, Mike Manley, agrees that Jeep will struggle to reach the sales target this year. He claimed himself to be “very focused on getting to the million number”, but he soon reminded that everybody should think twice before giving numbers and clear objectives.
Too many variables and one firm voice by the Italian-Canadian CEO: “Jeep will hit the 1 million target”. The Renegade could be a starting point, Geneva could be the starting place, Chrysler acquisition the first move.
But that was January. It’s already March…