FCA bets big on SUVs and pickups, plans to end Dodge Dart, Chrysler 200 production

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2015 Chrysler 200

2015 Chrysler 200

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In a presentation made to investors this week, Fiat Chrysler Automobiles [NYSE:FCAU] revealed some changes to its original company-wide strategy announced in 2014. Among the changes is a delay in the product schedule for Alfa Romeo as well as the addition of new diesel and hybrid models to meet tougher fuel economy and emissions regulations. The presentation also revealed that FCA plans to shift is focus more towards SUVs and pickup trucks as opposed to cars.

In the presentation, FCA pointed out that car sales made up around 46 percent of the market in the United States in 2015, down from 56 percent in 2009. Over the same time, combined SUV and pickup sales had grown from 44 percent of the market in 2009 to 54 percent in 2015. FCA sees this as being a permanent change. The “shift from cars to trucks and [utility vehicles] is now seen as permanent shift in demand,” FCA CEO Sergio Marchionne said in the presentation.

In response, FCA plans to increase capacity for its Ram and Jeep brands whose sales last year were hurt by limited supply.

2016 Dodge Dart

2016 Dodge Dart

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But FCA won’t be adding additional capacity. Instead, the automaker will free up capacity by ending production of its less popular car models like the Dodge Dart and Chrysler 200. Combined sales of the two cars totaled just 15,310 units in December. That compares with 24,049 sales for the Jeep Cherokee, which shares much of internals with the Dart and 200.

A date for the end of Dart and 200 production wasn’t mentioned but Marchionne said each model “will run their course.” Marchionne added that the automaker is seeking a partner to build successor models. Recall, FCA already tapped Mazda as a manufacturer for its MX-5 Miata-based Fiat 124 Spider sports car.

FCA is so confident in rising sales of SUVs and pickups that it has revised its 2018 target for worldwide Jeep sales from 1.83 million vehicles to 2 million vehicles. It will also add a pickup truck to the range, most likely based on the next-generation Wrangler.

 
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