As CEO Sergio Marchionne reportedly searches for a partner for the automaker, Fiat Chrysler Automobiles in the last 12 months has delayed the redesign or release of at least 12 current or new vehicles in North America alone, a news agency reported.
Reuters, citing suppliers “familiar with the company’s plans” said the unusual number of delays could let FCA defer billions of dollars in investment while searching for that partner.
Go deeper with GlobalData
Discover B2B Marketing That Performs
Combine business intelligence and editorial excellence to reach engaged professionals across 36 leading media platforms.
Attempting to woo GM, Marchionne reportedly suggested that there would be large cost-savings to follow such a combination. He has said auto industry consolidation is inevitable because automakers are burning through capital with their spending on overlapping engines and vehicles.
Five sources told Reuters FCA has delayed the high-margin Ram 1500 pickup and the Jeep Wrangler utility vehicle – sales of such models account for more than half of FCA’s pre-tax profit.
But Alfa Romeo may get more models on a faster schedule than originally planned, suppliers also told Reuters.
The report noted Marchionne highlighted product proposals in a five-year, US$50bn plan he outlined to investors in May 2014, including boosting annual global sales to 7m units by 2018 from 4.75m last year.
But, since then, at least a dozen future vehicle programmes have been delayed at Jeep, Ram, Dodge, Chrysler and Maserati, in some cases by a year or more, suppliers told the news agency.
Suppliers cited several possible reasons for the delays including last minute design and engineering changes, including some that could reduce FCA’s overall spend.
FCA declined to comment on specific delays. The product plan outlined to investors in 2014 was “a five-year snapshot of our plans,” the company said in a statement to Reuters.
“Those plans need to be flexible and fluid, with the potential to add some vehicles, pull some forward and extend the life cycle of others,” the company said. “We look at these programmes on a vehicle by vehicle basis.”
The automaker appeared to be focusing resources on updating its most profitable vehicles, including the Ram, Wrangler and Jeep Grand Cherokee, while pushing back planned redesigns of slower selling, lower margin models as the Dodge Dart.
Redesigns of some of the company’s most popular models are being slowed, suppliers told Reuters.
