FCA plans global domination for Jeep; Chrysler brand survives

BALOCCO, Italy — Fiat Chrysler plans to heavily push the Jeep brand around the world, company executives said this morning in introducing the company's new five-year plan.

It eventually aims to have 20 percent of the global utility vehicle market.

Executives also called for aggressive growth of the Ram truck brand in presentations at the company's Capital Markets Day at the famed Balocco Proving Grounds, and said FCA would form its own finance arm.

CEO Sergio Marchionne said that Jeep, Ram, Maserati and Alfa Romeo will be the focus of FCA's new five-year plan, which he called "strong and courageous." The plan will be Marchionne's last before his expected retirement at the end of the year.

Chrysler will survive as a brand, Marchionne said, knocking down pre-meeting speculation that the company would end it.

"At FCA, we've learned to live with uncertainty and we are prepared to face any challenge," he said at the outset of the meeting.

Mike Manley, head of Jeep and Ram, said the Jeep plan is for two launches per year worldwide as FCA seeks to make Jeep the world's dominant utility vehicle. The company aims for 1 in 12 utility vehicles sold to be a Jeep by 2022, eventually reaching 1 in 5. In 2009, that figure was 1 in 23.

Manley said FCA hopes to increase Jeep manufacturing capacity in North America by 500,000 during the plan.

Though FCA has previously eschewed electric vehicles, Manley said the Jeep plan calls for 10 hybrids and four full electric Jeeps by 2022. Electrification options will be available across each nameplate by 2021.

Manley also said it's time to change Ram being No. 3 behind Ford's F-150 and the Chevrolet Silverado.

The Ram global forecast is 930,000 vehicles with goal of 1 million by 2022. The 2018 forecast is 770,000. The company hopes to make it the No. 2 commercial brand in North America by 2022.

Marchionne, who has been reluctant to invest in electric vehicles, said the company would move in that direction.

Internal combustion engines will continue to be in the vast majority of FCA vehicles, but other options to be offered. The CEO said the company will make billions in electrification investments. "We're still in the realm of uncertainties" on regulation.

He said FCA does not expect to adjust its current plan on CO2 compliance and electric vehicles regardless of changes in regulations that the Trump administration is weighing.

Among other highlights:

• Richard Palmer, chief financial officer, said FCA intends to establish a captive finance company in the U.S. either through acquisition or startup to begin making its own auto loans. FCA retail sales are currently financed by a variety of banks, and it is the only major automaker operating in the U.S. without its own finance arm. The company, which is in talks with Santander Bank U.S., said the move is expected to boost both sales and earnings.

• Detroit icon Chrysler, saved out of bankruptcy by the Italians, was the subject of speculation before the meeting that it would die as a brand. The company said it plans to make most capital investments in next five years in global brands — just 25% will go to Chrysler, Dodge and Fiat. So investments are still planned but not at levels near Jeep, Ram, Alfa Romeo and Maserati.

People have been "talking nonsense" with speculation over Fiat and Chrysler brands, Marchionne said. "This presentation's focus is on global brands. I think Chrysler is going to continue to be relevant in the U.S. Don't expect it to be a global brand."

Chrysler's connection as a supplier of autonomous Pacifica vans to Waymo also was referenced.

• Marchionne predicted minimal impacts on FCA from steel and aluminum tariffs but "the question is whether it turns into a tariff war on finished products coming into the United States."

"I think rational people can find equitable solutions to the differences that exist," he said. "This thing will settle and when it settles it will settle properly." He added: "I think there's a lot of posturing that’s going on now. How much of this will stick is unclear to me."

• The company will phase out diesel in passenger vehicles in Europe by 2021.

With Marchionne’s impending retirement, speculation continues about who his successor will be, although he has said not to expect an announcement on that until later. For the presentation, he surprised the audience of analysts, FCA executives and journalists by wearing a tie with his trademark sweater. The tie came off after lunch, though. Substantively, he said FCA expects to pay off its industrial debt this year.

Marchionne, recently hailed by President Donald Trump as his favorite auto CEO, presumably for announcing FCA will move Ram Heavy Duty production from Mexico to the Detroit area, led the company out of Chrysler's Great Recession bankruptcy to strong profits in 2017.

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Contact Eric D. Lawrence: elawrence@freepress.com. Follow him on Twitter: @_ericdlawrence.