Jeep Cherokee productionEnlarge Photo
Fiat Chrysler Automobiles’ [NYSE:FCAU] five-year strategy announcement made a year ago may have been a little too ambitious, as we’re already starting to hear about possible delays of a number of key vehicle redesigns. A fortnight ago, FCA CEO Sergio Marchionne let slip that the redesigned Jeep Grand Cherokee may be delayed beyond its promised 2017 launch so that it can be jointly developed with a new Grand Wagoneer due out in 2018. Both vehicles are expected to ride on an updated version of the current Grand Cherokee’s platform.
Reuters, citing supplier sources, is now reporting that as many as a dozen vehicles may be delayed, although it also reports that some vehicle programs may be accelerated. One of the possible reasons for the delays is to provide Marchionne with time to find a partner that could co-invest in some of the development, particularly in areas such as powertrains and transmissions. Marchionne has made little secret of his desire for further consolidation within the industry, and FCA chairman John Elkann recently confirmed that Marchionne had sent an email to General Motors Company [NYSE:GM] CEO Mary Barra about a possible tie-up, which Barra turned down.
Other possibilities for the delays include late design changes, something that has plagued the Alfa Romeo brand in particular, as well as possible sources of funding for all of the separate vehicle programs. During the first quarter of the year, FCA’s net debt rose to 8.6 billion euros (approximately $9.6 billion) from 7.7 billion euros ($8.6 billion).
In a statement to Reuters, FCA said the 2014 five-year strategy announcement was only “a five-year snapshot” and that the plans “need to be flexible and fluid, with the potential to add some vehicles, pull some forward and extend the life cycle of others.”
Key vehicle program changes mentioned by the supplier sources are listed below:
As grim as this sounds, the supplier sources said some Alfa Romeo vehicle programs may be accelerated. It should also be noted that none of this, apart from the Grand Cherokee program, perhaps, has been confirmed by FCA.
You can see FCA’s original plans made during its 2014 five-year strategy announcement in the links below: