The Ch The rysler, Dodge and Fiat brands survived Friday's announcement of the five-year investment plan Fiat Chrysler, and will be maintained for as long as the administration does not see how to earn more money without them.
That's one of the conclusions of the marathon briefing in Italy. The FCA dedicated reams of paper and promised billions of dollars to brands that now earn more money and can generate higher returns in the future: Jeep, Ram, Alfa Romeo and Maserati.
Chrysler and Dodge have shrunk so much that keeping them running is easy and economical according to the automotive industry's cash consumption standards. Chrysler sells only two vehicles: the 300 sport sedan and the Pacifica minivan. Dodge has five: the performance-oriented Charger and Challenger; SUV Journey and Durango, and Grand Caravan minivan.
Unlike Pontiac and Oldsmobile, which had larger model lines, dedicated design and engineering teams and dealerships, the incremental cost of keeping Chrysler and Dodge in business is not much more than light bulbs for Dodge and Chrysler They sign in front of dealers that already sell many more Rams and Jeeps.
Until they require a significant investment to develop new models, Chrysler and Dodge can work more or less with inertia, with some money budgeted for updates every year.
In spite of that, I would not advise buying futures in Dodge and Chrysler. The crucial moment is coming.
Fiat Chrysler CEO Sergio Marchionne is obsessed with capital efficiency, so when he said in Italy on Friday that 75% of FCA's investments in the next five years will go to Jeep, Ram, Alfa and Maserati, you can figure that 25 percent is the ceiling for other brands, not for the floor.
Every Chrysler and Dodge vehicle has a future, as long as FCA believes that continuing to produce them produces more cash than dropping them in favor of something else.
The Pacifica, 300, Charger and Challenger are safe for the time being. If it were Durango or Journey, I would not use long-term parking.
Marchionne in each movement of the last three years has directed financial and engineering resources to vehicles that generate more money. That's why Jeep added new models and replaced the old ones. That's why FCA no longer builds the Dodge Dart, and the factory that made the Chrysler 200 convert to build the new Ram 1500 2019 truck.