US Chrysler to 'Break-Even', 75 Percent Of Line-Up All-New Or Renewed By Year End: Marchionne Photo:
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Tim O'Brien | Apr, 01 2010 | 0 Comments

ACCORDING TO Chrysler Group CEO and Fiat boss, Sergio Marchionne, a reinvigorated US Chrysler would “break even on an operating basis” in 2010, with profit increasing “to $US5billion by 2014”.

He also said that Chrysler would double its global sales to 2.8 million units by 2014, and have repaid “every penny that Chrysler Group has borrowed from the American and Canadian Governments”.

These claims, made in a bullish speech yesterday (US time) to the National Automobile Dealers Association (NADA), may surprise some industry observers.

After all, it was on March 31 2009 that the US Government rejected both Chrysler and GM's original so-called “turnaround plans”, resulting in both companies being sent into Chapter 11 bankruptcy to re-organise and restructure.

Canadian-Italian Marchionne also outlined the model plans and platform-sharing between Fiat and Chrysler Group on which the company's future rests.

There are some surprises there also.

According to Marchionne, seventy-five percent of Chrysler's vehicle line-up will be all-new or renewed by the end of 2010, with “100 percent of the line-up refreshed or renewed by the end of 2012”.

And how will this be achieved? It may have the Dodge Brothers turning in their graves, but by 2014, Fiat platforms will be sitting under no less than half of Chrysler's vehicle line-up while more than 40 percent of models will be fitted with Fiat powertrains or utilise Fiat technology.

For Fiat, of course, there are also benefits to its model line-up from the alliance with Chrysler. As Marchionne outlined to the dealer body, Fiat is to “turn over responsibility for development of all large vehicles in its product portfolio to Chrysler”.

Chrysler's efficient new Pentastar V6 engine, the first of which rolled off Chrysler's new Michigan engine plant this month, will also be shared with Fiat.

Marchionne said that the first “tangible results” of the Fiat and Chrylser alliance will hit US roads later this year, when the Fiat 500 makes its appearance in Chrysler showrooms.

While the tiny 500 (or Cinquecento) might be hard enough now for a Dodge Ram driver to wrap his head around, it will only get harder when the all-electric US-market version arrives in 2012.

But will Marchionne's grand vision for Fiat and Chrysler work? In a global vehicle market which – as Marchionne observes – is still plagued with production overcapacity (capable of producing no less than 30 million more cars annually than the market can possibly digest), there are no easy paths for any manufacturer.

And, with a US market in a long but slow recovery from near collapse, time is on no-one's side. There may yet be more still to play out for the 'big three' US manufacturers.

For Australian motorists, Marchionne's speech would indicate that we may see a new model line-up in local Chrysler/Jeep showrooms a little sooner than we might otherwise have expected.

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