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Fiat Chrysler aims for 60 per cent sales growth

Spelling it out: Fiat Chrysler Automobiles CEO Sergio Marchionne speaks at today’s five-year plan announcement in Detroit.

FCA aims for seven million vehicles a year as it reloads for global expansion

7 May 2014

FIAT Chrysler Automobiles (FCA) has laid out ambitious plans to expand its global sales by about two million vehicles or 60 per cent within five years, mainly on the back of its declared global brands Jeep and Alfa Romeo.

By expanding its sales to about seven million vehicles a year, it expects to jump one or two places in the global rankings to compete head to head with the world automotive giants and achieve sustainable production scale for each of its main platforms.

Last year, the group – which resulted from the acquisition of America’s Chrysler by Italy’s Fiat after the global financial crisis – sold 4.4 million vehicles. By 2018, it plans to sell 6.3 million vehicles under its own nameplates and a further 700,000 sales from new joint ventures in China and India.

That’s about three million units short of current volumes by global leaders such as Toyota, General Motors and Volkswagen, but moving closer to the likes of Ford.

FCA plans revealed today show that Alfa Romeo’s front-drive Mito and Guilietta models will be killed off, replaced with a brace of new rear- and all-wheel-drive vehicles now under development by designers and engineers in secret Italian “skunkworks”.

Jeep also has two all-new models in the pipeline, including a new baby C-segment SUV to replace the Patriot and Compass twins, and a large flagship Grand Wagoneer with three rows of seats (see separate story linked below).

Currently built only in North America, Jeep vehicles will be built in six countries, including Italy, China and Brazil.

Premium sportscar brand Maserati will play its part in the global expansion, with a five-fold increase in volumes – to 75,000 units - on the back of new models by the end of 2018.

Chrysler will focus mainly on North America where it will get a couple of new crossover vehicles to bolster its appeal and help to compensate for a declined in volumes from Dodge which is expected to be repositioned as a performance brand, meaning the discontinuation of mainstream models such as the Grand Caravan minivan and Avenger midsize sedan.

By 2018, almost half of all FCA vehicle sales volumes will come from North America, where sales across collective FCA brands are expected to jump 48 per cent from 2.1 million in 2013 to 3.1 million. This will be partly achieved by relaunching the Alfa brand in the US and expanding Fiat sales.

Fiat will look to improve its performance it its home market of Europe by turning more upmarket and expanding into SUVs such as the upcoming 500X, while also looking to grow in Latin America and Asia.

Capping a long presentation by FCA executives beamed around the world on the internet for Chrysler’s Detroit headquarters in Auburn Hills today, FCA chief executive Sergio Marchionne said the group had changed, becoming a new organisation with a new vision.

“We are different – we are fundamentally different from the group we were just a few years ago, we are also fundamentally different from our competitors,” he said.

“We have been through monumental changes that did not break us but made us grow and prepared us for the future.

“We are different because we have achieved cultural integration and an openness to different ways of thinking.” Mr Marchionne said FCA would be “nearly debt free” by the end of the five-year plan, shedding its current “worrying” debt level that is expected to peak at €11 billion ($A16b) in 2015.

He said that since the global financial crisis, all the efforts within the group had been directed at “ensuring we are in a group of survivors”.

“You have heard me mention on numerous occasions that an automaker has to achieve at least six million units a year to be a credible long term competitor capable of generating adequate returns on investment,” he said.

“Our target of seven million vehicles including joint ventures is consistent with our individual brand targets and our ambitions as a leading global player.” Saying that FCA had no plans to grow volumes by acquisitions or mergers with other companies, he said: “We expect to consolidate our position by moving at least one position higher in the global ranking.

“While global volumes are important to assure adequate returns on investments, we also need to achieve minimum volumes per platform “By 2018 we expect to exceed the minimum a million units on each of the three principal platforms where we have already completed convergence.”

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