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Jeep (top,
Patriot 2010) is the only one of the three
Chrysler Group brands set to retain a global
presence, according to media reports, while
the departure of the Chrysler brand from
outside North America is likely to stabilise
Lancia (bottom, Delta). |
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With Fiat set to unveil its
eagerly-anticipated five-year plan for Chrysler
Group in less than 24 hours, unattributed
briefings are starting to build a picture of
what the report contains – and the chief
headline is that Chrysler and Dodge will be cut
back to retain only a North American presence,
leaving Jeep as Chrysler Group’s sole
representative overseas. The news comes from
Automotive News, which quotes “people with
direct knowledge of the plan.”
The five-year plan is a key milestone in
Fiat’s plans for the future of the Chrysler Group, which it
took control of following a Chapter 11 bankruptcy process in
the early summer. It comes after Fiat’s top management,
headed by CEO Sergio Marchionne, spent months reviewing the
failed North American carmaker’s operations. The
presentation to analysts, media and representatives of the
US Government is expected to last for five hours. As well as
Marchionne, Chrysler Chairman Bob Kidder will also be
present.
According to AN, the strategy
outlined tomorrow will include hard-hitting changes. In a
report, it quotes sources close to the talks as saying,
“elements of the Fiat plans for Chrysler will reflect a
recognition that the automaker cannot be made viable with
only minor changes to its past strategy for its three
brands.” The paper added that, "as part of the wholesale
shake-up under Fiat, Jeep will remain an international brand
because of the strong name recognition it commands". Fiat
reportedly plans to develop the Jeep brand and increase
marketing for its SUVs in emerging markets such as Brazil.
Sales of the Pentastar’s brands have
collapsed at a shocking rate over the last year in major
global markets such as Europe, to the point where all three
division combined recently barely mustered 10,000 monthly
sales worldwide. While Jeep has a strong reputation across
the world as a genuine off road nameplate, both Chrysler and
Dodge brands have very little inherent value anywhere.
The most significant aspect of this
decision would be its effect on Fiat Group Automobiles’ Alfa
Romeo and Lancia brands. As part of its strategy, Fiat plans
to tie Alfa Romeo to the Dodge brand, focused on
sporty/driver-orientated cars, while Chrysler will tie up
with Lancia to focus on upmarket/luxury products. Removing
clashing Dodge and Chrysler brand products in worldwide
markets would strengthen Alfa Romeo and Lancia’s respective
positions. For Lancia in particular this would be
significant, as the brand could have the first signs of a
solid future after being threatened with extinction a number
of times over the past decade. Most recently this summer,
Fiat's failed offer for GM's Opel division called for a
Chrysler-Opel luxury focus, with Fiat executives briefing at
the time that Lancia would be abandoned if the bid was
successful. So far Fiat has not offered any long-term future
strategy for Lancia, and the unfolding of the five-year plan
for Chrysler could now prove a stabilising force.
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