Chrysler-Fiat’s lengthy to-do list CEO Marchionne should make some moves
NOW that Chrysler and Fiat are fully merged, they should be able to move much faster with newmodel development, investment and more.
That’s fine; but remember, DaimlerChrysler looked good on paper, too.
The proof’s in the doing. Here are some things I’m watching for as CEO Sergio Marchionne builds this new global automaker: More new vehicles, faster New vehicle introductions have slowed to a trickle at Chrysler and Fiat. The European market is such a mess, Fiat halted the development of vehicle architectures and drivetrains Chrysler and its South American and Asian units need. With Europe finally showing signs of recovery from the Great Recession, it’s time to put the hammer down.
“The full combination of Fiat and Chrysler is likely to open up the product pipeline in terms of speeding vehicles to the showroom and offering shoppers a greater diversity of choices,” said Bill Visnic, senior analyst with Edmunds. com. “As a fully integrated company, Fiat and Chrysler can do more together faster.”
Till now, Chrysler has fallen short of the ambitious plan for new models based on Fiat vehicle architectures.
“An incomplete merger throws a spanner in the works from a product planner’s point of view,” said Eric Noble, president of the Carlab, a product-development consultancy. Follow the money Forget paranoid talk about “Chrysler money going to Fiat.” It’s all one pot of money, but a good management team will invest it where the return is highest. That means product development for vehicles that can be sold around the world. Repairing Fiat’s struggling Italian operations at the expense of moneymakers such as North and South America, China and Russia is a bad idea.
“It’s now one company. One cash supply,” said IHS Automotive analyst Stephanie Brinley. “The money should go where it’s needed for long-term strategic purposes.” Fix the brands The Chrysler brand’s lineup is shockingly thin — the 300 and 200 sedans and Town & Country minivan. Brand boss Al Gardner acknowledges it needs more, but what models? A crossover? A compact? A convertible? Chrysler probably needs all those and more, and soon.
Alfa Romeo is another weakness. It’s past time to either make Alfa work or eighty-six the troubled brand. I’ve lost count of how many Alfa reboots Fiat management has demanded and dismissed while the brand’s sales and relevance dwindle.
Alfa has a glorious history, but if this May’s new-product plan isn’t rock-solid, Sergio should sell Alfa to brand-hungry Volkswagen for a king’s ransom. Then invest the money in Maserati, a luxury brand that has a present and a future as well as a past. Technical, design leadership Chrysler has batted .500 with its Fiatbased vehicles so far. The Dodge Dart is a good car, but nothing about its design, features or fuel economy propelled it to the top of buyers’ lists. The Jeep Cherokee looks like a clear-cut winner, combining classic Jeep capability with eye-catching looks, new technology and good fuel economy.
Chrysler needs more hits like the Cherokee. It can’t afford to be “as good as” the competition. There’s no room in Chrysler dealerships for vehicles with me-too styling, unexceptional fuel economy or features.
The challenge is neither Fiat nor Chrysler has consistently been a leader in compact and mid-size cars. That
must change. The 200 is the next test. So far, so good, Sergio The DaimlerChrysler disaster left us all understandably gun-shy about foreign owners at Chrysler, but Sergio Marchionne isn’t Juergen Schrempp. Fiat has already co-operated more fully and eagerly with Chrysler than Mercedes-Benz ever did.
“It’s time to have a little trust based on how Marchionne’s performed so far,” Brinley said. “He’s proven to be a good leader.”
Marchionne has been a fine steward of Chrysler’s interests. Chrysler got ac- cess to Fiat’s best technology, but also had the freedom to seek innovations from suppliers Fiat doesn’t use, such as American Axle Manufacturing, inventor of the Cherokee and 200’s fuelsaving all-wheel drive system.
“Chrysler’s on the right track,” said Drew Winter, editor in chief of the Ward’s Auto World web magazine. “It’s in a better place for the future than it’s been for decades.”
U.S. Vice-President Joe Biden in a Chrysler product, listens to Chrysler-Fiat CEO Sergio Marchionne at the Detroit auto show.