Sergio's challenge: Build Jeep into FCA's top global brand by 2018

Tue Oct 14, 2014 3:38pm EDT
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By Ben Klayman, Paul Lienert and Jeffrey Dastin

DETROIT/NEW YORK (Reuters) - Auto analysts are skeptical that Sergio Marchionne, the hyperbolic chief executive of Fiat Chrysler Automobiles (FCHA.MI: Quote)(FCAU.N: Quote), can meet his most ambitious goal: to nearly double Jeep's global sales over the next four years.

Marchionne reiterated his aggressive target for boosting Jeep's annual volume to 1.9 million, while pacing the floor of the New York Stock Exchange on Monday during the newly merged company's first day of trading.

That's nearly 700,000 vehicles more than the average of analysts surveyed Tuesday by Reuters, who believe FCA is more likely to boost Jeep volume to just over 1.2 million by 2018, from a projected 1 million this year.

"I have all the best intentions" of hitting the 1.9 million mark, Marchionne said in an interview Monday with Bloomberg TV. "We may even blow through it."

Counters longtime auto analyst and consultant Maryann Keller: "Realistically, he's not going to make the numbers."

Even if Jeep realizes only the more modest growth projected by analysts, it still is likely to emerge as the company's largest brand, accounting for 25 percent or more of total volume. Marchionne is expecting FCA sales to reach 7 million by 2018; analysts are expecting 5.1 million.

The success of FCA's Jeep growth strategy hinges not on a huge expansion of the brand's product portfolio, but rather on an expansion of its manufacturing and sales presence outside North America, Jeep's traditional stronghold since its post-World War II metamorphosis from military to civilian use.

FCA currently builds five Jeep models in four U.S. plants and is just adding a sixth model, the Jeep Renegade subcompact, in Italy. The Renegade is slated to go on sale in North America early next year.   Continued...

Sergio Marchionne, chief executive officer of Fiat Chrysler Automobiles, speaks with the media before ringing the closing bell to celebrate the company's listing at the New York Stock Exchange, October 13, 2014.  REUTERS/Eduardo Munoz