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* New 5-year business plan to be presented on Tuesday
* CEO aims to make Jeep, Alfa Romeo and Maserati global
* Financing, lack of execution and market headwinds raise
By Agnieszka Flak and Bernie Woodall
DETROIT, May 6 Fiat Chrysler will build
Jeeps in China and Brazil and is expected to invest billions of
euros to revamp its battered Alfa Romeo sports-car brand in a
bid to convince investors it can turn the newly merged automaker
into a thriving global business.
Chief Executive Sergio Marchionne unveils the group's
long-awaited five-year business plan on Tuesday when he is
expected to show how Fiat Chrysler can "go on the attack against
the giants" in the industry.
The focus will be on execution. The group has repeatedly
missed sales targets as it delayed investments, made some bad
design choices and has seen its main European business lose
share and plunge into losses during a six-year market slump.
Apart from repeating its overall goal of growing sales by
more than a third to over 6 million vehicles by 2018, investors
want Marchionne to provide specifics on how and when he plans to
compete with much larger rivals such as Toyota Motor Corp
, General Motors Co and Volkswagen.
"Fiat Chrysler has got to stop saying they will do it and
just do it," said Stephanie Brinley, a senior analyst at
researchers IHS Automotive. "We are waiting for the execution."
Jeep, with ready products and a globally recognised brand in
the fast-growing sport utility vehicle (SUV) segment, is today
Marchionne's best bet to grow sales, boost margins and to gain a
global manufacturing footprint in Fiat's home turf in Europe and
in fast-growing markets such as Brazil and China.
A compact Jeep called the Renegade will go into production
in Italy later this year - the brand's first model to be built
exclusively outside the United States - and that same model will
also be built in Brazil as of next year.
The Renegade is critical for the brand's overall sales
target of 1 million vehicles this year, a jump of 37 percent
While most analysts call the target ambitious, they agree
Jeep is the only truly global brand currently in Fiat-Chrysler's
portfolio and its best opportunity to expand in Asia, the
fastest-growing global car market but also the group's blind
Fiat Chrysler's joint venture in China, Jeep's largest
market outside the United States, also plans to manufacture
three Jeep models locally, with the first due in late 2015.
While Jeep is solidly a rising star within the Fiat Chrysler
family, plans for Alfa Romeo are less clear.
Marchionne plans to revamp the luxury Maserati and upmarket
Alfa Romeo marques to follow bigger rivals such as Volkswagen
by building global brands and strengthening its position in the
fast-growing and high-margin market for premium cars.
He is expected to promise at least six new Alfa models,
including premium-priced sedans and SUVs, with the first to hit
the market by early 2016. Marchionne is betting on Alfa because
he believes it can deliver the global profile that mass market
brand Fiat cannot and far greater sales volumes than Maserati.
But analysts said considerable time and billions of euros
will be needed to erase the weak quality reputation for a brand
that has been kept on life support for years.
Maserati's performance last year was encouraging, with
trading profit tripling and deliveries doubling.
Meanwhile, several attempts at reviving Alfa have stalled,
leaving just three models and sales dropping by more than half
over the past decade to 74,000 cars last year, far below a
500,000 target Marchionne envisaged for 2014 in a past plan.
The success, or otherwise, of an Alfa Romeo renaissance will
be central to whether Fiat survives a difficult European market,
allowing the group to fill idled plants in Italy and reinstate
thousands of workers placed on temporary layoff schemes.
Marchionne's challenges are huge, from finding the money to
fund the plan to implementing it in a cut-throat industry where
demand is still subdued in Europe and is now flagging in some
major emerging markets such as Brazil.
(Editing by Ken Wills)