Exclusive: Fiat Chrysler delays many future vehicle programs
By Paul Lienert
DETROIT (Reuters) - Fiat Chrysler Automobiles in the past year has delayed the redesign or release of at least a dozen current or new vehicles in North America, according to suppliers familiar with the company's plans. The unusual number of delays could let the automaker defer billions of dollars in investment while searching for a partner.
FCA Chief Executive Sergio Marchionne is shuffling product plans even as he seeks a partner for his company, the seventh largest global automaker. Marchionne says consolidation in the auto industry is inevitable, because automakers are burning capital investing in overlapping engines and vehicles. [ID: L5N0YJ2L1] [ID: L5N0YK320]
Among the North American vehicles FCA has delayed updating are high-margin models including the Ram 1500 pickup and the Jeep Wrangler utility vehicle, according to five people familiar with the company's plans. Sales of pick-ups and utility vehicles account for more than half of FCA's pre-tax profit, according to industry analysts.
At the same time, FCA is accelerating development of certain vehicles. The Alfa Romeo brand may be getting more models on a faster schedule than originally planned, suppliers told Reuters.
FCA made its future model plans the centerpiece of a five-year, $50 billion plan that Marchionne outlined to investors in May 2014, including boosting annual global sales to 7 million by 2018 from 4.75 million last year.
Since Marchionne came out with his plan, at least 12 future vehicle programs have been delayed at Jeep, Ram, Dodge, Chrysler and Maserati, in some cases by a year or more, suppliers said.
Suppliers cited several possible reasons for the delays, among them last-minute design and engineering changes, including some that could reduce FCA's overall investment. FCA's cash and marketable securities fell by 1.1 billion euros ($1.2 billion) between Dec. 31, 2014, and March 31, while its net debt rose to 8.6 billion euros from 7.7 billion euros.
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. Continued...