Once a mainstay on American highways, Chrysler is now driving toward an uncertain future. Its partnership with Daimler-Benz has been replaced by one with Fiat, and while Fiat Chrysler Automobiles (FCA) has kept its head above water (thanks to America’s obsession with pickup trucks and the unyielding power of Jeep brand loyalty), the rest of the business raises more than a few questions. What is Fiat’s true future in the U.S. market? Will Alfa Romeo and its Giulia succeed today after a reputation for unreliability sunk them in 1995? And with only a midsize sedan with a questionable future, a full-size stalwart in a shrinking segment, and the 2017 Pacifica in a crossover-crazy era, can Chrysler stay afloat?
Is Chrysler ready for another merger?
The U.S. automaker recently wrapped up a takeover by Italian automaker Fiat and was subsequently renamed Fiat Chrysler Automobiles, or FCA.
Now FCA CEO Sergio Marchionne has his eyes on another merger:
A takeover of General Motors.
It’s probably the strangest Ferrari ever built.
The Ferrari Sergio looks like it’s facing the wrong direction—it has the rear haunches of a Veyron and the front dimensions of a poorly designed Hot Wheels model.
The irony behind the Sergio’s odd design is that it was built to honor Sergio Pininfarina, the legendary designer who created many of the trademark Ferrari shapes.
Even crazier, Ferrari will build only 6 copies of the Sergio, each of which is already spoken for, at a price that probably exceeds $2.5 million each.
Needless to say you can’t buy one. But soon you’ll be able to buy a part of Ferrari itself, as the company will be sold out from Fiat’s ownership. Sort of.
Thanks to some arguing and name-calling in Europe, used Volkswagens just went up in value by a thousand bucks in the U.S.
How can a European tiff turn into a financial incentive in the United States? Because the auto market is truly international, and when an Italian automaker wants to prove a point against a German competitor, it looks to assets in the U.S. to drive that point home.
The throwdown in question is between Chrysler/FIAT CEO Sergio Marchionne and the entire Volkswagen empire.
On a flight from Los Angeles to Portland yesterday, I sat near actor Sam Elliott, he of “Ghost Rider” and “We Were Soldiers” fame. I thought that was pretty cool, but quickly forgot about Mr. Elliott when I noticed that my seat-mate looked an awful lot like Sergio Marchionne.
I couldn’t figure out why the FIAT/Chrysler CEO would be on a commercial flight, much less sitting all the way back in seat 27E, but there were a few moments there when I was sure I’d struck car-blog gold and would have two hours of Sergio to myself.
Upon further review and a few awkward questions, I discovered that the Italian man in the sweater was not Mr. Marchionne, but rather a perfectly friendly engineer on his way to see his new baby granddaughter in Oregon. Dang-it.
Had I been fortunate enough to sit next to the real Sergio, there are some questions I would have loved to ask him.
In the category of things that are long overdue, let’s place this:
While speaking at the Chrysler Belvidere Assembly Plant, Marchionne said the Compass will continue to be built at the facility through August 2014, at which point it will be replaced by a new model. He also said the Grand Caravan will be the automaker’s only minivan moving forward. Marchionne also let slip his company’s intent on the development of a Dodge Dart SRT model, saying the performance-oriented vehicle is coming just as soon as they figure out how big an engine to put in it.
We thought it might be enlightening to look at the CEOs of three of the largest car companies so you can decide whom you want to replace Henrik Fisker (Monday joke, of course). We didn’t include Alan Mulally, because most of you know his record at Ford.
Dan Akerson, 63, came to General Motors in 2010 after five years in the Navy and wide business experience, mostly as head of global buyout for the Carlyle Group and in telecommunications. He had a track record in private equity but not in manufacturing or autos.
So, despite coming in cold, Akerson is a turnaround guy and, according to most analysts, has done extremely well in bringing back GM from the dead, paying back government loans, and making saleable and respected product again.
It has been a dramatic transformation, one not without costs to those whom GM’s bankruptcy burned. Most of you know about the success of cars like the Chevy Cruze and the Buick Verano. The Volt has been a disappointment but was an experiment that may yet pay off.
The tougher U.S. fuel economy (CAFE) standards have forced some radical rethinking by two of the world’s largest auto companies.
They really have no other choice, as long as the government commits to the flawed idea of CAFE, with all its loopholes, contradictions and costs of enforcement.
The 54.5-mpg requirement for passenger cars by 2025 (really around 40 mpg per EPA window sticker) has forced Chrysler to start making and selling hybrids and diesels. In 2013, the Chrysler 300 (above) will have a hybrid version, and the Jeep Grand Cherokee will offer diesel. The Fiat 500 EV will be coming next year.
Last year, Chrysler trailed all 14 major carmakers with a 19.2-mpg average. Regarding CAFE, CEO Sergio Marchionne has said, “I have no other way of getting to 2025 numbers than by going to hybrids.” He is also hopeful that CNG infrastructure will take hold.
As the world economy sags (or sinks, some would say), the car czars are finally taking note. Pent-up demand has kept the big guys afloat, and so has China. But the European crisis and the endemic sickness of the U.S. economy are hard to ignore.
Looking at next year, Carlos Ghosn (above) forecasts “very great uncertainty for the time being.” The CEO of Renault and Nissan says customers are presently skeptical but not yet “defensive.”
Both his companies are currently doing well, but who would not be uneasy, given the signals from around the world, including slowing demand for cars in China?
Dan Akerson, the GM CEO, looks for flat U.S. sales in 2012. Like others, he “sees the EU crisis as the biggest threat to auto sales and to the global economy.” Akerson predicts 2012 light-vehicle sales will be similar in numbers (12.7 million) to this year’s.
But, in what looks to be a major sign of big changes to come for Dodge, the Grand Caravan will apparently exist only on the used market come 2014.
According to the reputable and journalistically conservative Automotive News, Chrysler will kill off its mainstay minivan sometime in 2013. That would leave the Chrysler Town & Country as the only van under the Pentastar’s roof; a vehicle that consistently sells fewer copies than the Grand Caravan.
It doesn’t make sense. It’s known that Chrysler/FIAT CEO Sergio Marchionne wants to consolidate brands at dealers and eliminate duplication on the sales floor. While I appreciate any plan to end the much-maligned practice of re-badging at Chrysler, dumping a perennial best-selling icon like the Grand Caravan could be a troubling sign for the Dodge brand. With plans to bring Alfa Romeo to the U.S. (someday), could it be possible that Marchionne is laying the groundwork to phase out Dodge and replace it with Alfa?