A 2013 Dodge Dart moves along the production line at Fiat Chrysler’s assembly plant in Belvidere, Ill., in Feb. 2012. FCA has stopped building the slow-selling compact car and still hopes to find another automaker to build a replacement. Photo credit: BLOOMBERG
Fiat Chrysler CEO Sergio Marchionne said finding another automaker to build its front-wheel-drive passenger cars is still on his agenda, but it’s not as important as preserving the uniqueness of the company’s rear-wheel-drive offerings.
Speaking to analysts on FCA’s third-quarter conference call last month, Marchionne said he continues to look “for a cost-effective solution” to replace the now-discontinued Dodge Dart and soon-to-end Chrysler 200 sedans but even if those efforts are successful it would just represent a “rounding error” in terms of the company’s overall financial goal.
Marchionne announced in January that the automaker planned to end production of the two slow-selling sedans in order to build more Jeep SUVs and Ram pickups.
Though he promised at the time that FCA would replace those offerings in their respective segments for dealers, he said on the call last month that he had “nothing to announce because we haven’t finalized anything.”
Neither the compact Dart nor the midsize Chrysler 200 sold well in its segment. They competed against some of the top-selling nameplates in the industry, such as the Honda Civic and Toyota Camry. Through October, U.S. sales of the Dart were off 47 percent, while Chrysler 200 sales dropped 65 percent from the same period last year.
“The only reason why we have looked at the passenger-car market with some degree of skepticism is because of the pricing power associated with our position,” the CEO told analysts. He said that in terms of FCA’s goal of achieving 9 billion Euros in profit by 2018 the profits from selling fwd sedans built by someone else “would be a rounding error” and “not really the big issue.”
A more important goal is developing the Alfa Romeo Giorgio platform that underpins the new Giulia sedan to cover vehicles from other brands to “preserve the uniqueness of the rear-wheel-drive offering that we have across fundamentally four brands which are Alfa, Maserati, Dodge and potentially Jeep.”
Marchionne repeated his earlier assertion that the market shift away from passenger cars is “a structural change” that will be permanent. “I think we’ve adapted our industrial footprint to reflect what we consider to be a permanent change and I think we need to rely on the economies of scale and capital deployed and invested by others to give us the desired objective.”
“Our search for a front-wheel- drive passenger-car solution to deal with very much of an American problem has got limited impact on our ambitions.” Marchionne said.
“But it’s a matter of time. We will find somebody.”