It’s called the Portal, and Chrysler unveiled this concept car at CES in Las Vegas.
DETROIT – If you’re a fan of Chryslers, Dodges and Fiats, rest easy. The brands aren’t going to disappear from the American road despite what was probably a close call.
It came June 1 when Fiat Chrysler’s five-year investment plan was released. All three brands were included in the plan despite diminished product lines and less interest among buyers in cars, as opposed to SUVs.
But the brands are by no means in the clear over the longer run. They’ll hang on for exactly as long as management doesn’t see a way to make more money without them.
Fiat Chrysler devoted reams of paper and pledged billions of dollars to the brands that make more money now and may deliver higher returns in the future: Jeep, Ram, Alfa Romeo and Maserati.
Chrysler and Dodge have shrunk so much that keeping them running is easy and inexpensive by the auto industry’s cash-devouring standards. Chrysler sells just two vehicles — the 300 sedan and Pacifica minivan. Dodge has five — the performance-oriented Charger and Challenger; Journey and Durango SUVs, and Grand Caravan minivan.
Unlike brands like Pontiac and Oldsmobile, which had bigger model lines, devoted design and engineering teams and dealers, the incremental cost of keeping Chrysler and Dodge in business doesn’t amount to much more than light bulbs for Dodge and Chrysler signs in front of dealerships that already sell far more Rams and Jeeps.
More: SUV and pickup fever: U.S. auto sales beating expectations so far in 2018
More: GM gets $2B investment from Uber backer SoftBank for self-driving cars
More: Jeep, Ram lead growth plan amid questions about future of Fiat, Chrysler brands
Until they require significant investment to develop new models, Chrysler and Dodge can run more or less on inertia, with a little money budgeted for updates each year.
Despite that, crunch time is coming.
Fiat Chrysler CEO Sergio Marchionne’s obsession with capital efficiency is legendary, so when he said June 1 in Italy that 75% of Fiat Chrysler’s investment in the next five years will go to Jeep, Ram, Alfa and Maserati, you can figure 25% is the ceiling for other brands, not the floor.
When it comes to models, Pacifica, 300, Charger and Challenger are safe for the moment. But only for the moment. If I were a Durango or Journey, I wouldn’t use the long-term parking lot.
Marchionne’s every move for the last three years has directed financial and engineering resources to the vehicles that make the most money. That’s why Jeep added new models and replaced its old ones. It’s why FCA no longer builds the Dodge Dart, and the factory that made the Chrysler 200 was converted to build the all-new 2019 Ram 1500 pickup.
Jeep will add 500,000 units of North American manufacturing capacity as it increases sales and adds new models between now and 2022, brand boss Mike Manley said Friday. Ram plans to add an all-new midsize pickup, probably expecting to sell 75,000 to 100,000 a year.
That’s likely to squeeze some Dodge and Chrysler vehicles out. The Durango and Journey should be first to go. FCA would make more money boosting Grand Cherokee output from at the Detroit plant that currently builds both vehicles, so developing and building a new Durango probably won’t pass scrutiny.
The Journey is ancient by automotive standards, developed during the DaimlerChrysler regime and on sale since the 2009 model year. The moment a more profitable new Jeep is ready for production, the sun sets on Journey’s long day.
The Pacifica is popular, new, and Chrysler’s always been a leader in minivans, so it’s safe. But the moment Fiat Chrysler figures out how to convert enough Grand Caravan buyers to the Pacifica, the aged Dodge is done. The Ontario, Canada, plant that builds both minivans might build additional Jeeps alongside the Pacifica, more minivans or another people-mover.
The outlook for the 300, Charger and Challenger and the other Ontario plant that builds them is not as bright. FCA executives have long been unhappy with the plant’s quality and efficiency and plans to move the sporty cars it builds to Alfa Romeo’s new Giorgio architecture have been scrapped for yet another update of the platform the cars debuted within the 2005 model year. They’ve been great cars, but the end of the line is coming unless Marchionne’s successor has other ideas after the CEO retires in 2019.
The same forces are at play for the Fiat brand. There’s little reason for it to exist in North America, other than to honor commitments Fiat Chrysler made to dealers. If more profitable Alfa Romeos and Maseratis squeeze low-margin Fiat cars out of production in Italy and off the sales floor in the U.S., very few people will complain.
Will the last person to sell a Chrysler, Dodge or Fiat turn out the lights?
Read or Share this story: https://usat.ly/2LQqotv