News - Chrysler

Chrysler reveals plan for next five years under Fiat

Spared: The Chrysler 300C will continue to be one of the company's core models under Fiat management.

Australian Chrysler Group line-up to be transformed under Fiat-led product program

Chrysler logo6 Nov 2009


CHRYSLER Group’s operations in Australia are set for a radical transformation in the coming years as the American auto giant – now under Fiat rule – strives to almost quadruple its sales outside North America to 500,000 units by 2014.

Specific Australian targets and distribution arrangements are still to be finalised, but Chrysler Group’s international sales chief Michael Manley this week revealed details of a much broader global product portfolio for Chrysler, Jeep and Dodge as part of the company’s much-anticipated five-year plan.

To include vehicles produced by Chrysler for Fiat, the ambitious sales target represents a massive increase from the 144,000 sales outside North America forecast for 2009, accounting for up to 18 per cent of the Chrysler Group’s total sales – up from 11 per cent expected this year.

Overall sales are expected to rise from about 950,000 this year to two million in 2014 – the year Chrysler believes it will post an operating profit of $US5 billion ($A5.5 billion) and the point where it will have cleared its debt of $US12.5 billion ($A13.8 billion) in life-saving US government loans.

The company expects to break even on a net basis in 2011.

The new product portfolio will include new passenger cars and SUVs spanning the compact, small, medium and large segments, covering more than 70 per cent of the global new-vehicle market – more than double the coverage Chrysler currently achieves.

 center imageLeft: Chrysler Australia managing director Gerry Jenkins. Below: Dodge Nitro and Jeep Commander.

In his presentation, Mr Manley said Chrysler Group’s entire product portfolio would be refreshed by 2012, with 50 per cent derived from Fiat Group platforms by 2014.

He said there would be a “clear focus” on the development of just two core brands in each market – with Fiat’s Lancia now considered interchangeable with the Chrysler brand – but Chrysler Australia managing director Gerry Jenkins has confirmed to GoAuto that the focus would continue in this market on all three existing brands.

While distribution rights for Lancia in Australia currently rest with Fiat importer Ateco Automotive, Fiat has made it clear that Lancia will not be sold in right-hand drive countries, which rules it out for this country.

Furthermore, Mr Jenkins said he was “absolutely” confident Chrysler Australia would continue to be run as a factory-backed operation rather than being farmed out to Ateco or another independent distributor.

Indeed, GoAuto can reveal that planning is underway for Chrysler to shift its operations from Mercedes-Benz Australia/Pacific headquarters in Mulgrave, east of Melbourne, to the Fiat-owned factory-run Iveco Trucks Australia head office in nearby Dandenong.

Chrysler Australia has also been holding discussions with Fiat-owned Case New Holland.

This is in line with Mr Manley’s presentation this week that sees Chrysler sever sales and marketing operations, financial services and back office support services with Daimler and instead leverage the Fiat Group’s distribution infrastructure and resources, integrating into this parts distribution and logistics.

“We’re pretty certain that we’re going to be able to move in with Iveco eventually, and they can give us a lot of support for back-office functions, such as IT and parts logistics and things like that – the things that are really invisible to both dealers and customers,” Mr Jenkins told GoAuto.

“We’re not competing brands with Iveco so it works really, really well. There’s a lot of background (activities) – distribution, our vehicle logistics – where we can pool all of our volumes and just get better deals in the marketplace.

“From an operational point of view, that goes a long way for me. It’s something that I don’t have to spend money on, that I can put money elsewhere on. It’s just good business. So we’re going to continue to look at ways that we can fully leverage the partnership with the Fiat Group.”

Chrysler Australia management will receive a future product briefing in Detroit in the coming weeks, and Mr Jenkins said he was certain the US would allow the Australian operation to continue developing all three brands and core models, including the Chrysler 300C, Dodge Nitro and Jeep Wrangler.

Australia is in the top-five markets for Chrysler outside North America – not to mention number one for right-hand drive markets, and number-one for Wrangler outside NA – albeit with around 10,000 annual sales across the Chrysler, Jeep and Dodge brands. The short-term aim is to lift that number to 12,000.

“In Australia, there will be essentially no change,” Mr Jenkins said. “We’re going to continue to evaluate and submit our business case as we have in the past, and we will continue to promote the three brands. We have made some good traction in the market.”

Jeep remains the backbone of the Chrysler Group, with global sales expected to increase 60 per cent to 800,000 by 2014.

In his presentation in Detroit, Mr Manley said he wanted to take Jeep “back to its historic place as the global sport-utility vehicle brand”, although to do this he confirmed that the Commander would be phased out by the end of next year and that the Cherokee (also known as the Liberty), Patriot and Compass would also be terminated in 2012.

Fiat-developed products will replace the Cherokee, Patriot and Compass in 2013, among them a single model standing in for Patriot/Compass and an all-new sub-compact SUV.

A serious off-road variant across all model lines will be integral to the reformulated Jeep brand, as will new derivatives of the harder-core Wrangler off-roader – the one vehicle that will retain a traditional separate chassis construction.

Rather than take Dodge into an exclusive performance sphere, the Chrysler Group this week turned the tables on pundit expectations with brand chief Ralph Gilles announcing that Dodge would become more of a “lifestyle-oriented” marque crossing a wide range of mainstream segments.

There will be 11 redesigned or heavily revised Dodge models by 2014, including an all-new full-sized seven-seat crossover wagon in the fourth quarter of 2010 – a model that was in the works before Fiat arrived on the scene earlier this year – and, in 2012/13, three all-new Fiat-based models: a compact hatch (replacing Caliber), a medium-sized sedan (replacing Avenger) and, for the North American market, a small sedan.

Viper production will cease in 2010, although a sportscar that draws from Fiat’s Maserati and Ferrari brands is under development and expected on sale in 2012.

As GoAuto has reported, the Chrysler brand is heading more upmarket to rival the likes of Nissan’s Infiniti and the prestige European brands.

It will be the biggest benefactor from the Fiat alliance, and, in his presentation this week, Chrysler brand chief Olivier Francois emphasised the “ironically similar” styling and “historic DNA similarities” between Chrysler and Lancia. He also identified Chrysler’s new marketing vision as “different, remembered and aspirational”.

Chrysler will next year upgrade its key two models – the 300C large sedan and the Voyager (Town & Country) people-mover – but by 2014 it will also have new entrants in the compact, small and medium-sized passenger car segments, as well as a medium-sized crossover wagon.

The Sebring-replacing ‘200C’ mid-sizer will be based on Alfa Romeo’s 159 successor, the Giulia, while the compact will be based on the Alfa MiTo and the small car springing from the 147-replacing Alfa Milano.

A new-generation Voyager is also due in 2014.

As GoAuto has reported, the Chrysler Group will leverage Fiat’s powertrain technology as well as vehicle architectures.

There will be a substantial shift from eight- and six-cylinder engines to Fiat-derived four-cylinder engines, many combined with a Fiat-designed dual-clutch transmission, although Chrysler this week said it was sticking with its all-new Pentastar V6 petrol engine.

The Pentastar is set to debut in the upgraded Jeep Grand Cherokee next year and will replace all Chrysler’s V6 engines, from 2.7 to 4.0 litres in displacement. Fiat technology, including MultiAir, will be applied to the Pentastar in due course – and will also be seen, along with other six-cylinder (and larger) powerplants, in future Fiat Group (particularly Alfa Romeo) products.

As a result, Pentastar is set to replace the current Australian-built V6 engine range sourced from GM Holden.

Chrysler also revealed this week that hybrid drivetrains remained under development, with a petrol-electric Ram pick-up truck due late in 2010/early 2011 and a hybrid people-mover arriving soon after in 2011.

‘There is no ‘business as usual’ at Chrysler,” said Chrysler Group chairman Robert Kidder. “There is incredible commitment to, and energy for, change.”

Chrysler sales are down 30.6 per cent in Australia year-to-date, while Jeep is down 29.9 per cent and Dodge just 1.1 per cent below the running rate for the same period last year. The three brands achieved 10,000 sales combined in 2008, with Jeep accounting for 50 per cent of the total.

Chrysler Australia spokesperson Jerry Stamoulis told GoAuto the company was still waiting to hear specific information as it relates to the Australian market.

“There is a lot to take in from all the presentations but we see it all as positive information, without a doubt – extremely positive for international markets,” Mr Stamoulis said. “There is a strong focus for volume to increase dramatically in international markets, and being one of the top-five markets for international, we’re expecting to play a pivotal role in that.

“We are still waiting to hear a lot of the specific information. It is still very early. As they look at the regional portfolio, they are still working on a number of markets, including Australia.

“Our team are off to the US over the next few weeks to talk about the future product and so on, and we’ll get some (concrete) idea over the coming months.

“But one thing that was communicated (in Detroit this week) was that rather than having a focus on … what we call ROW markets – ‘rest of world’ markets – it will be more specific to each market, and there will be more communication between the countries (and head office) rather than regions.”

Read more

Share with your friends

Chrysler articles

Motor industry news

GoAutoNews is Australia’s number one automotive industry journal covering the latest news, future and new model releases, market trends, industry personnel movements, and international events.