2016 FCA Business Plan Update Details New Products, Revised Strategies

FCA gave an update today on its current business plan that was first shown in May 2014 for its Investor Day. Today’s update focused mainly on how the automaker will deal with the changing markets, low gas prices, and China’s slow-down. Among its brands, Jeep is currently the most profitable in the FCA portfolio, especially in North America. Maserati’s growth, on the other hand, has slowed down due to the downturn of the Chinese market and increased competition with domestic automakers. The Levante, Maserati’s first crossover/SUV, will be revealed this year.

In North America, Jeep remains the strongest brand, followed by Ram, and has continued to make profit since 2009. FCA says that there’s still high demand for Jeep and Ram products, especially the Wrangler, Grand Cherokee, and Ram trucks. As a result, production capacity has been realigned toward manufacturing more crossovers/SUVS and trucks to satisfy unmet demand. FCA has also reconfirmed that it will build a truck for Jeep and that the Grand Wagoneer is on the way. The increased production represents a shift away from cars toward trucks and utility vehicles, a trend FCA “expects to be permanent.” According to our friends at AUTOMOBILE, FCA CEO Sergio Marchionne said at the Investor Day that the Dodge Dart and Chrysler 200 would not be replaced after their current life cycles are finished.

Alfa Romeo’s product rollout has been delayed and will be completed by 2020 due to the Chinese market slowing down and import restrictions. Instead of China, Alfa Romeo’s primary markets have been shifted to North America and Europe. Investment for R&D and manufacturing for Alfa Romeo has also been reduced. In addition to the Giulia sports sedan and a midsize crossover/SUV, Alfa Romeo will also introduce two specialty vehicles, two more crossovers/SUVs, and a hatchback. The latter is likely to be a next-generation Giulietta, which we reported could move to a rear-wheel drive configuration instead of the current car’s front-drive layout.

The business plan update also indicates that 2016 will see the introduction of a new family of small and medium engines from FCA. New hybrid vehicles will also be part of the future FCA lineup. Joining the 2017 Chrysler Pacifica PHEV will be hybrid variants of the next-generation Ram pickup and Jeep Wrangler. The Wrangler will also gain a new diesel powertrain in addition to new gas engines. FCA’s next-generation vehicle architectures are also going to be lighter through more extensive use of high-strength steel while active aero systems will help reduce drag. Electronic systems such as the disconnecting rear axle found in all-wheel-drive variants of the Jeep Renegade and Fiat 500X will also continue to trickle across the FCA portfolio.

In addition to giving updates on its product rollout, FCA used Investor Day to address Volkswagen’s dieselgate woes and assured that its vehicles are compliant with emissions regulations in all countries in which they sell vehicles. The company has also added additional measures such as random, on-road emissions audit testing, internal and supplier software and calibration audits, and formalized compliance training for all software and emission calibration engineers.

Source: FCA

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