* FCA targets global Jeep sales of 1 million in 2014
* Jeep to help FCA turn around in Europe by 2016
* Analysts say Jeep truly global brand, but challenges ahead
By Agnieszka Flak
GENEVA, March 4 The Jeep Renegade, which debuted
at the Geneva auto show on Tuesday, will be the first true test
of the recent marriage between Italian carmaker Fiat and its
U.S. unit Chrysler, meant to allow both to share technology,
cash and dealer networks.
Fiat Chrysler Automobiles' new small Jeep should
help the carmaker reach an ambitious sales target of 1 million
vehicles for the brand this year and will test the world's
seventh-largest auto group's ability to compete globally.
Through the alliance, brands like Jeep hope to gain a global
manufacturing footprint in Fiat's home turf in Europe and in
fast-growing markets such as Brazil, which has long been one of
"The investment that Fiat has already made, now gives the
opportunity to Jeep to expand its manufacturing footprint at
lightning speed," Mike Manley, head of the Jeep brand, said at
the launch of the Renegade.
Even though analysts believe Jeep is the only truly global
brand in FCA's portfolio, they are cautious about the 1 million
target, a 37 percent jump from 2013.
"Even though sales in Europe will grow, it won't be easy to
make huge volumes with Jeeps in the region because the market is
very different from the U.S. one," said Andrea Giuricin, head
of TRA Consulting. "Asia is still a big blind spot for Fiat, and
they need to rapidly grow their market share there to be able to
maximise on the potential of the Jeep brand."
The brand traces its roots to the iconic World War Two
military vehicle and has had multiple owners over the past seven
While the Wrangler and Grand Cherokee models are the
best-selling Jeeps, it is through models like the Renegade that
FCA hopes to expand the brand outside North America.
Manley said the small, entry-level Jeep is not only fuel
efficient, but its compact size is better matched to narrower
European roads than some other models in the brand's family.
"This Jeep will enter a segment that's estimated to grow to
more than 2 million vehicles on a global basis by the end of
2015 and in Europe alone, sales of small SUVs will reach nearly
700,000 within a year," he said.
The Jeep Renegade will be produced at the Melfi plant in
southern Italy, making it the first Jeep built exclusively
outside the United States. Sales in Europe are expected to start
in the third quarter of this year and in the United States later
in the year.
The small SUV retains many classic Jeep characteristics,
with squared-off nose, boxy design and round headlights
reflecting its Wrangler-derived DNA.
The Renegade will also be built in Brazil as of 2015, FCA
Chief Executive Sergio Marchionne said. The carmaker plans to
start making Jeeps in China the following year, hoping to tap
fast-growing demand for sport utility vehicles in both markets.
The China plan, which is expected to add a Jeep to the plant
Fiat runs with partner Guangzhou Automobile Group,
is still conditional on government approvals.
At the Melfi plant, the Renegade will share underpinnings
with the Fiat 500X, a crossover version of its popular 500 model
that is expected to be unveiled later this year.
Both the Jeep and the Fiat 500X are part of FCA's plan to
turn around its ailing European operations by 2016, using idled
Italian plants and creating jobs for thousands of workers who
have been kept on temporary layoff arrangements for years.
FCA is investing 1 billion euros ($1.37 billion) to produce
the new Jeep and a new 500 in Melfi. Investments and models
planned for its other plants in Italy, including a relaunch of
the sporty Alfa Romeo brand, will be presented in early May.
Unions at Melfi are hopeful brands like Jeep will create
jobs and boost an economy struggling to recover from its longest
postwar recession. But they are also worried what will happen if
demand for the cars does not pick up as expected.
"There is no certainty over what share of the SUV market in
Europe and elsewhere Fiat will be able to take, nor that they
will manage to reinstate all the furloughed workers," said
Emanuele de Nicola, the FIOM union's general secretary for the
southern Basilicata region. "There are still too many