DETROIT Jan 17 Now that Italy's Fiat SpA
has almost closed its deal to buy the portion of
Chrysler it does not already own, one of the main items on the
to-do list of Chief Executive Officer Sergio Marchionne is
expanding the global reach of the Jeep brand.
And Marchionne, the CEO of both Fiat and Chrysler, wasted
little time this week in making a prediction that some analysts
regard as bold: Jeep will achieve its goal this year of selling
1 million sport utility vehicles around the world.
That would represent a 37 percent rise from Jeep's global
sales last year.
Marchionne said at the Detroit auto show this week that the
lack of a mid-sized SUV in the U.S. market hurt overall sales
last year, but strong demand for the Jeep Cherokee in 2014 will
help Chrysler to boost sales by 37 percent.
Fiat is expected to close a deal next week that will give it
full ownership of Chrysler.
Chrysler's Jeep Liberty was out of production last year and
any remaining sales were minimal, so Chrysler Group's
best-selling brand did not have a midsize SUV, the largest entry
in the American SUV market. Cherokee was only sold in the final
two months of 2013 and Marchionne said all signs point to the
company making up for lost sales this year.
"And we've got the small Jeep coming out of Europe," he
said, pointing to some late-year sales for the unnamed compact
SUV to debut at the Geneva auto show in March.
Also helping Chrysler hit its 2014 sales target, Marchionne
said, will be increased production of Grand Cherokee, the
top-selling Jeep in 2013, because some of the bottlenecks have
been eliminated at the Jefferson North plant in Detroit.
Finally, there is some more output expected to be wrung out
of the Wrangler plant in Toledo, Ohio, he said.
"So we'll see. It should add up to a million," Marchionne
Not everyone is a believer that Jeep can jump that much from
last year's global sales of 731,565, up 4 percent from 2012 and
the second straight full-year record for the brand.
Jeff Schuster, senior vice president of forecasting at LMC
Automotive, said Jeep will hit 1 million in sales by 2020, but
not this year.
"All the planets would have to perfectly align, even those
we don't yet know about, to hit the target in 2014, so we just
don't see that happening," he said.
Mike Manley, head of the Jeep brand, agrees that Jeep has to
avoid setbacks to reach a million in sales this year.
"I'm very focused on getting to the million number, but I
want to get a few months under my belt before I say 'yes we're
going to be there,'" he said in an interview at the auto show.
"I want to see a couple of months of Cherokee," he added.
"We're just beginning to ship to international markets."
'ACTING AS FOREIGNERS'
Fiat's deal to acquire the remaining portion of Chrysler
from the healthcare trust for retired Chrysler workers is
expected to close next week. After the companies are merged, the
main goals will be expanding Jeep globally and relaunching the
sporty Alfa Romeo as a luxury brand, Marchionne told reporters
at the show.
Marchionne has said for several years that Jeep and Alfa
Romeo are Fiat and Chrysler's only possible global brands, but a
lot of work remains to expand Jeep's reach, particularly in
"We are true novices," he said of Asia. "We have a very long
way to go."
He said Fiat and Chrysler have performed particularly poorly
in South Korea.
"We need to strengthen our resources" in Asia, he said. "We
have been acting as foreigners in those markets for a long
period of time. We need to correct it."
BUILT IN CHINA
While Manley pointed to increased sales of U.S.-made
Cherokee in international markets and better distribution in
America, Jeep still has a ways to go before it can move many
vehicles in the world's biggest car market, China.
Chrysler intends to build a Jeep in China for that market,
but Marchionne and Manley could not say how soon the Chinese
government would give the go-ahead for those plans.
Manley said there are signs the approval could come at the
end of the first quarter, which would mean that production could
start by the end of 2015 or in the first half of 2016.
"You can never be totally confident until it comes," he
said, referring to the Chinese government's approval for
Jeep is expected to add Cherokee production to the plant
Fiat runs with partner Guangzhou Automotive Group.
The Fiat Viaggio sedan built at the Changsha plant in
south-central China sits, like the Cherokee, on the underbody
architecture of the Alfa Romeo Giulietta.
Marchionne reiterated that the Wrangler and the Grand
Cherokee will not be built outside the United States.
"That leaves the Cherokee by definition and the little
Jeep," he said, referring to the subcompact SUV.