Fiat Chrysler to expand Jeep, Alfa Romeo in company overhaul

Fiat Chrysler to expand Jeep, Alfa Romeo in company overhaul
Though it created the minivan segment in 1984, the Dodge Grand Caravan will be killed off in 2016 when Chrysler Group introduces the next generation of its twin, the Chrysler Town and Country. (Chrysler Group)

Fiat Chrysler Automobiles wants to turn Jeep into a global brand and bring Alfa Romeo back to the U.S. as part of an aggressive five-year plan unveiled Tuesday.

The company is working to meld its Michigan-based Chrysler Group with Turin, Italy-headquartered Fiat to create a more nimble global automaker that can better compete with industry giants such as Toyota Motor Corp., Volkswagen and General Motors Co.


"In a flat world, you can't be secure in your home market if you aren't able to compete in others," said Sergio Marchionne, FCA's chief executive.

The merged company, created by Fiat's gradual acquisition of Chrysler since the U.S. automaker's emergence from bankruptcy in 2009, wants to increase worldwide sales to about 7 million vehicles by 2018, up from 4.4 million last year. Fiat completed the acquisition earlier this year and is creating Fiat Chrysler Automobiles as the parent company for the two businesses.

The storied Jeep brand is the linchpin for the planned expansion. It is intended to account for about half the automaker's growth through 2018.

Marchionne wants to almost double Jeep's global sales to 1.9 million by 2018 -- a substantial jump from the 732,000 it sold last year. The company will do that by going global. About 75% of Jeep sales are in the U.S., but Fiat Chrysler plans to add six factories in Europe, China and Latin America as the automaker targets sales in those markets.

By 2018 the company plans to be building close to 1 million vehicles outside North America, said Michael Manley, Jeep's chief executive. The strategy puts production in the markets where vehicles will be sold and will help it escape heavy import fees and tariffs it would pay to export vehicles from North America.

Jeep's plans include development of a full-size, luxury sport utility vehicle that will debut in 2018. The three-row SUV will resurrect the long-dormant Grand Wagoneer name and will vie with the likes of the Audi Q7, Infiniti QX60 and Lexus GX. Jeep will also introduce a new compact crossover in 2016, which coincides with the brand's 75th anniversary. The unnamed crossover will replace the current Patriot and Compass models.

The company also is looking at its Alfa Romeo brand for growth. While Alfa hasn't sold cars in the U.S. since 1995, it's well known as a sporty upmarket brand in Europe, though it has seen sales slump in recent years.

The brand will return to the U.S. later this year with the Alfa Romeo 4C, a mid-engine sports car that will sell for $55,000 to $70,000 depending on trim and equipment

Moreover, Fiat Chrysler plan to invest about $7 billion in Alfa Romeo over the next four years, adding eight new models with a goal of increasing sales to 400,000 units, from just 74,000 last year.

The automaker also is looking to its core Chrysler brand for growth. It wants to more than double sales to 800,000 vehicles in 2018 from the 350,000 it sold last year.

The automaker expects the surge will be led by several new vehicles. In 2016 Chrysler will debut the 100, a compact sedan to compete in a high-volume segment with the likes of the Honda Civic, Toyota Corolla and Ford Focus.

The company is making a big change in minivans, too, a segment its Dodge Caravan created in 1984. Now known as the Grand Caravan, this model will die off in 2016 when a new Chrysler Town and Country minivan debuts. In addition to an all new design, the minivan will be available as a plug-in hybrid for the first time.

In 2017, Chrysler will debut an unnamed full-size crossover SUV that will also have a plug-in hybrid option. A year later the nex- generation 300 full-size sedan launches, as will a new midsize crossover SUV.

In other changes, the automaker will fold its performance-oriented SRT line into the Dodge brands. Dodge also is targeting 2018 as the year to unveil an all-new subcompact sedan and hatchback to compete with cars like the Honda Fit, Chevrolet Sonic and Ford Fiesta.


Finally, Fiat will expand its lineup with the 500X, a larger, all-wheel-drive version of the four-door 500L.

"The long-term success or failure of Marchionne's plan might take a decade or more to assess," said Karl Brauer, analyst at auto information company Kelley Blue Book, "but today marks the beginning of a new direction for Chrysler that should prove fascinating to watch, either way."