Fiat Chrysler Automobiles chief executive Sergio Marchionne has a rearrangement of North American factories to favour truck and Jeep production over car output will be completed by early 2018.
According to Reuters, he also said the company would build, by the second half of 2016, a new compact Jeep SUV in Toluca, Mexico. The new model will also be built in Brazil and China, the company had said earlier. The new model would replace the current Jeep Compass and Patriot SUVs in North America.
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The report noted North America accounted for nearly 90% of FCA's profit in the first quarter, as low fuel prices increased consumer preference for pickup trucks and SUVs over fuel-efficient cars.
The new Jeep, the name of which has not yet been announced, will go on sale early in 2017 in the US, Marchionne said.
Production of the profitable Ram 1500 pickup truck would be shifted to Sterling Heights Assembly from Warren Truck (both in suburban Detroit), Reuters said.
Marchionne emphasised no truck or Jeep SUV production would be lost as the company restructures its North American manufacturing footprint. He reaffirmed truck and SUV production would be prioritised over less profitable car making.
"As the relevance of passenger cars decreases in the US it helps profitability," Marchionne was quoted as saying on a conference call after the company issued quarterly earnings.
He also said that, once the reset of North American production is completed, the number of workers represented by the United Auto Workers union will rise although there will be temporary layoffs at plants such as one already announced at Sterling Heights.
He also reaffirmed comments made earlier this month in Amsterdam, where the company is registered, that he expected to have more news by the end of this year on FCA's search for a partner to help it build the Dodge Dart and Chrysler 200, Reuters added.
FCA – especially during the previous DaimlerChrysler era – used Magna Steyr to contract-assemble Chrysler 300C sedan and wagon, the Voyager/Grand Voyager [Town and Country] minivan lines and the Jeep Grand Cherokee in Austria as well as low-volume variants of the Mercedes E-class. Magna Steyr built diesel versions of the Chrysler and Jeep models designed primarily for Europe, using European-sourced engines from Mercedes and VM Motori.
