Marchionne Says Chrysler Group Will Play to Its Strengths

Despite all the talk about Fiat-influenced vehicles infiltrating Chrysler Group’s U.S. model lineup, the company now says that its vehicle mix will remain, for the most part, unchanged for the short term.

Fiat – Chrysler CEO, Sergio Marchionne was quoted as saying, "I think it will be very stupid for us to assume the same type of European style and sizing which has driven the automobile portfolio of Fiat Group will prevail in the U.S." He went on to indicate that Chrysler Group’s vehicle mix will remain fairly truck-heavy.

Marchionne said that, although Chrysler’s model lineup will continue to be centered on large cars, minivans and full-size pickup trucks, Fiat’s advanced engine technologies will improve the fleet’s overall fuel efficiency by as much as 25%. He said that he expects the increased fuel efficiency to generate a profit margin of up to 7.7% within the next four years. Marchionne’s goal would equal the profit margin realized by Chrysler in 1997, the automaker’s last full year before being acquired by German automaker Daimler-Benz. That year Chrysler posted an operating profit of $4.7 on $61.1 billion in revenue.

Chrysler has traditionally been associated with power, performance and durability and Marchionne sees these attributes as viable assets even as many rival automakers are working to expand their fleets of smaller vehicles. Marchionne said, “I still think the heart of the U.S. market would continue to be in the C and D segment."

Those segments include the Chrysler Sebring and Dodge Avenger and Caliber – none of which have been strong sellers against competitors like the Honda Civic and Accord. During the first 10 months of this year Honda sold 244,579 Accords in the U.S. compared to a combined total of just 51,531 Sebrings and Avengers. The Sebring will receive a major design overhaul next year and Marchionne is confident the modifications will reverse the current downward trend in sales.

Marchionne also said that Chrysler’s Jeep brand will broaden its efforts to sell the off-road image to consumers who rarely, if ever, actually go off-road. He contends that positioning Jeep as a strictly off-road brand was too limiting and hurt sales. "Staying in the corner where it stayed, Jeep has allowed everybody else to occupy a space which probably does not belong to them. We have to go back and reclaim that territory," he said.

Chrysler also plans to launch four new C- and D-sector vehicles in 2012-2013 and to expand its model lineup to include 14 Fiat-derived nameplates; mostly small and mid-size models.

In 2012, Chrysler will also introduce two new all-wheel-drive crossover models on Fiat platforms. In contrast to Marchionne’s stated commitment to focus on C- and D-sector vehicles, one of the new AWD vehicles will be a U.S.-engineered version of the Fiat Panda subcompact which is smaller than Honda’s Fit.

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