The follow up to the current the Dodge Dart and Chrysler 200—if there is one—will use the vehicle platform from another automaker, FCA has revealed. Anyone feel like tangoing with Uncle Sergio?
In an update Wednesday on the company’s 2014-2018 plan, CEO Sergio Marchionne said those two models would be allowed to “run their course” in order to expand production capacity for Jeep and Ram models. FCA will then “withdraw the current Chrysler 200 and Dodge Dart from the marketplace over a prolonged period of time, during which we will be continuing discussions with potential partners that will be able to allow us to access that architecture and effectively provide us the product from their facilities,” Marchionne said.
The 200 is currently built at a dedicated plant in Sterling Heights, Michigan, while the Dart shares space in Belvidere, Illinois, with the Jeep Compass and Patriot. The tentative plan, as Marchionne had indicated months ago, would be to move Cherokee production to Belvidere and out of the Jeep plant in Toledo, Ohio, in order to accommodate more Wrangler models, including a new Jeep Wrangler pickup. To build more Ram pickups, FCA will use Sterling Heights as overflow for its current facility in Warren. Both moves could effectively kill the Dart and 200, at least temporarily until FCA finds a partner automaker, but Marchionne isn’t worried.
“The partnered vehicles that will replace, over time, the passenger cars that are currently in production in the U.S., we assume to have negligible margin contribution to the overall plan,” he said. “Even in the absence of those vehicles, we are not going to drastically change our forecast.” Meaning, the cars aren’t profitable enough for their absence to significantly affect the company’s overall financial performance.
Marchionne, citing lower gas prices as a “permanent condition,” is insisting the company improve profit margins on compact and midsize cars while it shifts U.S. production to crossovers and trucks. Last year, two out of every five cars FCA sold was a Jeep; across the industry, compact crossover sales (including the Renegade) ballooned by 57 percent. To keep up with demand, FCA is “running flat out in Toledo” to build the Wrangler, a practice he called “unsustainable” and “unhealthy.” Marchionne did not mention the fate of the Chrysler 300, Dodge Charger, or Challenger. Those cars are all built in Brampton, Ontario.
So far, however, FCA has yet to find a partner to build the 200 or Dart. Remember how Marchionne personally emailed General Motors CEO Mary Barra, asking her outright to merge with him? Marchionne likes to be blunt like that, but as yet his negotiating charm hasn’t worked. No automaker other than Mazda has signed up with FCA, and even then only for the Fiat 124/Mazda MX-5 Miata roadsters.
Given FCA’s investment in the current 200 and Dart models, abandoning the compact and midsize sedan segments and then assuming gas prices will remain permanently low might make financial sense in the short term, but it sounds like a risky long-term strategy. If Marchionne believes Jeep and Ram sales are the only vehicles that can drive FCA’s growth going forward, then there may be bigger problems at FCA than we’re led to believe.
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