Jeep continues to fuel FCA’s global expansion

The first half results revealed that FCA is becoming more dependent on US car market and Jeep. The group’s revenue, profits and shipments recorded mix results as the good results in Europe were offset by the drop in Brazil, while North America heads to stabilization. What is clear is that this year FCA will not grow in terms of units sold and Jeep will continue to be a key player in its future.

Jeep 1Jeep sold around 720.000 units in H1 2016, which is about 100.000 units more than in the same period of 2015. The good result was possible thanks to North America, China and Europe, where Jeep continues to grow at strong rates because of different reasons. Sales in North America posted a 15% rise to 523.000 units boosted by the continuous shift of consumer towards SUV and big trucks. In fact the US and Canadian markets keep growing thanks to these two segments. Jeep is one of the brands to post the highest market share so far this year thanks also to the arrival of the Italian made Jeep Renegade, which is having success.

Jeep 2In China the Jeep boom is being generated by the arrival of localized production of the Cherokee and more lately the Renegade. After the flop of Chinese-made Fiat Viaggio and Ottimo, FCA decided that the best way to gain some market share in the world’s largest market was by selling SUVs. The imported Jeeps were are not only expensive but they started to record sales fall due to tougher competition (from Chinese and foreign brands) and the slowdown in growth. Till June 30th, Jeep had already sold 51.700 units of its Cherokee, while the Renegade is expected to increase that volume from July.

Jeep 3Europe is another example of how fast the Jeep growth can be. The brand has sold almost 46.000 units in the first six months of this year, up by 28% over the first half of 2015. Its market share jumped from 0,61% to 0,68%. The reason for this is again localized production with the Renegade made in Melfi, Italy and strongly boosted by FCA Europe. In fact the small SUV counted for around 80% of the brand’s sales in this region. Jeep’s market share in Italy was 2,13%, outpacing other important markets like Mexico and Australia.

Jeep 4But the growth doesn’t stop there. While Brazil deeps into its worst economic and political crisis in years taking the car market to very difficult times, Jeep made its debut with its first locally produced product in May 2015. The results are stunning with more than 26.000 units sold in the first half, becoming one of the top 15 best-selling models in Brazil. In fact the Renegade has not only beaten other popular small SUVs like the Ford Ecosport or Renault Duster, but it has helped FCA to offset the drop on sales of Fiat. The problem here is that FCA built Pernambuco plant (where the Renegade is made) thinking of a 3-4 million units market, and this year the market won’t surpass the 2 million units mark.

If FCA wants to grow more and attract investors, it must continue boosting its Jeep operations worldwide. The Renegade has done an excellent job but it won’t be enough. Jeep must launch the new C-SUV, a all-new Grand Cherokee and add the Grand Wagoneer to its range.

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16 responses to “Jeep continues to fuel FCA’s global expansion

  1. EMEA region is unexpected profit market. Yes, in terms of numbers that’s not good bu in terms of margin they(FCA) are ahead of many other groups in this industry. The problem is that European market is much smaller in sales numbers compared to the past.
    But Tipo is much better than expected. Tofas is working seven days a week with all three shifts. Recently they had record braking day for produced cars in their history. And some thought that Tipo will be a failure. Now they are weighing a introduction of Tipo based sedan under a American brand name in a US market. And also some people believe in Tipo based Lancia model.

    Major concern for FCA are LATAM and APAC regions. LATAM is in state as it is. APAC with China is a market were FCA came to late. They also made a mistake with introduction of FIAT brand vehicles in China. With that they missed the mark because Chinese people have a fetish toward American brands. They need to introduce a Chrysler as a mass market to upscale brand in China for sedans. That could also provide lifeline for Chrysler brand in a USA with exports from China.
    The only one mass market Italian band which could succeed in China is Alfa but for that they will need locally produced cars.

    • As incredible as it may seem, FCA in EMEA has been profitable for a year. And with the Tipo success in Europe, they’ll probably have even bigger profits.
      And they are strongly considering introducing the Tipo as the new Dodge Neon in the US, besides Mexico. They have plant capacity to produce it in Mexico.

      And you hit the nail on the head with China. They should’ve sold Dodge and Chrysler cars in China and not Fiats. That would strongly increase their presence in China. They could position Chrysler as a Buick rival there.

      In LATAM, they’ll be introducing there the new Jeep C-SUV first.

    • Absolutely correct, FCA missed more than one opportunity in China. Jeep models should have been produced there first -not a watered down Fiat version of the Dart, and with their interest in US brands Chrysler should have been promoted more than Fiat.

      Europe is doing surprisingly well after languishing for years, but at the cost and destruction of two brands -Lancia and Chrysler. Both brands represented a significant niche that could have grown, if Marchionne had not foolishly combined them. There’s always been reasonable demand for American brands in Europe also, and the Voyager MPV which has always been recognized as a Chrysler -not as a Lancia. Chrysler was well positioned to continue global growth on all continents, until it was marginalized by Fiat to and in the the US.

      With Chevrolet diminished and Chrysler gone from Europe, these sales have now has been picked up by grey-market importers.

      • @ ClasicBob

        This is classic US-centric opinion from you. We call it nationalism in Europe contrary to you which label it as a patriotism.

        Believe me that Alfa has much better chances to succeed in USA than any US-brand except Jeep has chance in Europe. Heck, even a Jeep sold lees cars in Europe through to end of July this year.
        Chrysler had mixed success in the past but almost every car sold better with Lancia badge and even that was at to low numbers. Back in the past when Chrysler brand had a more Euro-centric models like Neon, LH cars or short wheelbase minivan they had somewhat better sale numbers but yet again it was to low.

        The good part of Alfa’s US re-birth is in showrooms. It seems that more than a half will be shared with Maserati and not with Fiat.

        And FCA needs global premium and luxury brands.

  2. Fca should focus effort on EV and Hybrid otherwise should merge with some tech partner with desire to develop American market and Jeep brand.

    • The Pacifica will do as well as the Town&Country, Caravan, etc, but current and future consumers may not be as interested on MPVs as before. Chrysler needs SUVs

      • Thanks Juan for replying But will Chrysler brand have SUV’s in the future?

    • Stateside sales are picking up with the Pacifica Minivan:-

      April – 487
      May – 2495
      June – 7207
      July – 7911

  3. Good analysis, FCA is indeed becoming more dependant on Jeep and North American sales (in fact without it, Fiat would be in dire straights).

    The biggest question is why must Jeep carry FCA, when there are other strong iconic brands that could contribute a much more balanced portfolio for FCA if they had more current product. Chrysler and Dodge are being whittled down to nothing, Lancia has already been left for dead, while niether Alfa nor Maserati are in a position to make any significant contribution to FCA (and may never be). They are in fact are more of a financial drain than anything else.

    I think the current management is doing a great injustice to not only historic brands, but to shareholders by neglecting strong brands and putting all their eggs in a Jeep basket and gambling on the Alfa basket.

      • Without question the trend is towards crossovers and SUVs, -which perplexes me why FCA has been ignoring the fastest growing segment for Chrysler, Dodge, and also to an extent Lancia. Not everyone wants a Jeep branded crossover, nor a Fiat branded one. If each brand had a modern compact crossover, these iconic brands would not be as endangered.

        Is FCA on a deliberate path to destroy three historic brands?

      • And that`s why Fiat needs a C-Segment SUV based on the new jeep… like the sucessful 500X/Renegade

    • Lancia is dead and buried for the foreseeable future.
      They barely have a dealer network anymore in Europe. Chrysler and Dodge still have an extensive dealer network in the US so I’m sure new products will come.

      I think they are still defining new direction for those brands because of the failure of the 200 and Dart…
      I hope they remove Fiat from China, take Chrysler there and expand Jeep.

      Would love to have Dodge in Europe again, so that we could have the Challenger in this continent.

  4. It is a very smart move if FCA. brings the Dodge Neon back to the U.S.A. for 2018
    replacing the Dodge Dart!

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