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Marchionne's 5-year plan fails to impress investors

5K views 42 replies 24 participants last post by  aldo90731 
#1 · (Edited)
FCA stock plummeted 12% after Marchionne revealed its next 5-year plan.

The article says investors are skeptical about his ambitious plans for Alfa Romeo and Maserati, and says he is betting too much on Jeep, at the expense of Chrysler and Dodge.

Personally, the whole thing about Chrysler now becoming a mainstream brand and Dodge a performance brand seems rather schizophrenic, to say the least.

I wished they just picked a 25-year vision for these brands, instead of re-shuffling them every 5 years.

Fiat's Five-Year Plan Fails To Impress Investors, Stock Plummets

EDIT: further news link the drop in stock price to FCA posting a quarterly loss, due to the purchase of the remainder of Chrysler.
 
#2 ·
yep, Chrysler has always been more of the luxury brand of the family (like Lincoln and Cadillac fpr ford and Gm) and Dodge has always been the "Blue collar" AND muscle brand to me...if they had wanted a "Discount" or value brand, they should have kept Plymouth around
 
#4 · (Edited)
Alfa has become a personal vendetta for Marchionne.

Ferdinand Piech, head of VW, likes to mock Marchionne and how he is going to show Marchionne how to build Alfa into a real luxury brand. Marchionne is now determined to show Piech otherwise, one way or another...
 
#6 ·
The plan is very aggressive, and analysts are wondering where the money will come from. Doesn't matter how broad Fiat's shoulders are, their approx 11 billion debt (US dollars) is a heavy load to carry.
Flawless product launches are key, and the track record so far isn't rosy - Fiat 500, Dart, Viper, Cherokee. Too soon to tell with the 2015 Chrysler200, but it looks promising.
Alfa's not doing well in Europe (except Italy), so not sure how it'll do here.
It's all about product, so if Chrysler really buckles down, they may achieve the plan.
If Marchionne steps down in 2018, Carlos Ghosn from Nissan/Renault would be a great successor.

Just my dos centavos.
 
#7 · (Edited)
If Marchionne steps down in 2018, Carlos Ghosn from Nissan/Renault would be a great successor.

Just my dos centavos.
NOOOOOOOOOOOOOOOO!!! NOOOOOOOO!! NO!

LOL...sorry, I just happen to work with Nissan and see all the stupidity coming from Mr Ghosn.

Yes, he is Mr Cost Cutter, but he has no vision besides launching one weird-looking vehicle after another that add little to no incremental sales, while completely missing the boat on key model launches like Sentra. Nissan quality has had some recent setbacks, too.

I will take Marchionne over Ghosn any day. Marchionne, with all his shortcommings, at least is very good at building morale and rallying the troops, which is no insignificant trait in a leader.

Just my two pesos :D
 
#9 ·
Alfa, as a "brand" in the USA, has about as much chance as the "SRT Brand" does, or did.

Some folks at Chrysler need to dump the emotions, and just start making some sense to what Americans drive, and want.

Honestly, I feel that there really is a "golden opportunity" for Chrysler, but merge the best of all the brand engineering, into the American cars.

Force feeding "brands" into America, just doesn't work anymore.
 
#11 · (Edited)
Marchionne loves the ingenuity and work ethic he found at Chrysler, and he detests the Italian government meddling and the entitlement of the labor unions he has at FIAT. It is no coincidence he has been giving North America plants most of the growth.

If anything, he'd probably want to sell of FIAT LOL!!!

However, he seems to have the blinders on when it comes to the US market: he underestimated Dodge, and overestimated FIAT and SRT.
 
#12 ·
Road & Track (latest issue) stopped drooling over the Alfa 4C the minute they stepped inside and it got worse when they drove it.
 
#13 ·
I don't think SRT as a brand really got a fair shake.

Alfa will be about as successful as fiat IMO
 
#14 ·
I don't think SRT as a brand really got a fair shake.
You are right. But I think many inside Chrysler were not convinced SRT should be a separate brand.

And Pretty-Boy Ralph managed it like a drunken Trust Fund Baby.
 
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#15 ·
Since there is nothing any of you can say to change things, why not give them a fair chance before you bury them. I cannot count the number of peons on the god damn internet who said that Chrysler would not be around, just 5 years ago. Politicians were claiming Chrysler would not be around much longer. Now, here we go again. I am sure I will lose track of all the BS that will avalanche onto this site and others.
 
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#17 · (Edited)
Since there is nothing any of you can say to change things, why not give them a fair chance before you bury them. I cannot count the number of peons on the god damn internet who said that Chrysler would not be around, just 5 years ago. Politicians were claiming Chrysler would not be around much longer. Now, here we go again. I am sure I will lose track of all the BS that will avalanche onto this site and others.
Fair enough. But the fact that Chrysler survived two close calls is no guarantee it will be around another 10 years.

FCA really needs to stop reshuffling its brands every 5 years. Every time they do, is like hitting the reset button with consumers.

Consistency and persistency builds forward momentum; constant indecision is a waste of time, and inefficient use of money.
 
#19 · (Edited)
Geez,

Never any good thing to say about an American company that's been around 100 years?

Remember that the majority of our current products keep a lot of our citizens (including Our Northern and Southern neighbors) employed.

But then this is the Internet and any one can be a big tuff arrogant know it all - why because we can hide behind screen names :zlurking:

If it wasn't for Sergio and company stepping up with a plan, Chrysler would more than likely have been a memory after the collapse of 2009.

I will give Sergio and company a A+ for their vision.

Anybody remember that in March Ram trucks out sold Chevy!!

So let's give some credit to the folks that build our cars.

:guiness:
 
#20 · (Edited)
this is the Internet and any one can be a big tuff arrogant know it all - why because we can hide behind screen names :zlurking:
DD, talking about yourself, again... :guiness:

Agree, those RAM trucks are awesome...and kicking GM's butt, too!!!
 
#22 ·
I don't think Sergio "reshuffled the deck". It's been obvious for several years that Dodge is the "performance brand" of the company...I don't see how that's surprising to anybody. I think there was ever a clear direction for the Chrysler nameplate...and really, there are only 3 vehicles under that name right now anyway.

I do think Dodge would be in a better position of the Dart hadn't floated-like-a-lead-balloon upon it's launch. The refresh for that can't come soon enough, and they seriously need to re-think what they want to Dart to be. The initial ad campaign tried to sell it as a "hot hatch", and in looking at it's performance, it just isn't.

It's not a bad car at all, but it's competing in a segment with nameplate that have been around forever, so it's hard to make inroads by doing exactly what the "other guys" are doing.
 
#32 ·
I rented a Dodge Dart this weekend to see how it was. It's a base model of course, so I was not expecting.much, but it's black with some pretty nice wheels, so it looks good. The interior is bland of course, but the seats are comfortable.The motor however is a complete turd.
 
#24 · (Edited)
Fiat's don't sell well at all in the U.S. and that is...well...the mother company....this is going to get bad pretty quick. This guy really does not understand what Americans want, at least in my eyes, esp with the SRT\Dodge\Jeep\Chrysler brands....and this sacrafice is really just to bring Alfa Romero which I really don't think will do well at all, to the U.S. I feel like this is the beginning of the end.
 
#25 ·
Just about a week or two ago some of the folks (on this thread) were complaining that Dodge was gone...and now its back as a stand alone, in your face, performance brand. I'm finally seeing a blown v8 Viper in the future too. Hi Corvette.

Jeep sales are crazy across all models. The Cherokee is a hit so all the folks who cried that is was ugly or not a true Jeep, sales of it are proving you wrong. I'm a Jeeper and think the Cherokee is an excellent addition to the brand.

RAM took out Chevy in March/April and now gunning for Ford. RAM is doing it without fleet sales dependencies (Ford owns this space) or incentives. Work trucks get dents and fixing dimples on aluminum cans is expensive. Ford's aluminum F150 may become a commercial cost inhibitor because of insurance costs - they will skyrocket so stay tuned to that segment. RAM is using better power trains to fix their CAFE numbers.

Chrysler is not a luxury brand, it is an affordable luxury brand like Hyundai - yes, I said it - without the stigma of that low cost foreign brand. Chrysler is generally thought of as higher end than Chevy and positioned better to compete vs. Toyota.

Maserati sales are growing in the states (thanks to the LX platform). Alfa may start slow like Fiat but that family will need each other to sell more units.

More good news: our cars are getting awesome power trains, awesome interiors and revised suspensions. Three things Daimler never did so the 5 year plan looks great.
 
#26 ·
The biggest mistake they are making is trying to make all the cars look alike. What's wrong with diversity in the looks department? Does the 200 have to look like a mini 300 and have the same grill. Do the Charger and Journey have to look like a Dart? It's the same thing Ford has been doing and I guess it's working for them but I don't care for it. Dodge should have given the Charger a front end like the 68' and just slightly updated the tail lights. The new hood is a step back as well. Lastly, they should also come out with a hatchback based on the Dart under the Doge nameplate.
 
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#28 · (Edited)
The biggest mistake they are making is trying to make all the cars look alike. What's wrong with diversity in the looks department? Does the 200 have to look like a mini 300 and have the same grill. Do the Charger and Journey have to look like a Dart?
Yes, they do. BMW, Audi, Kia, and now Ford, have made tremendous gains by finding a design language that works, and applying it to the whole lineup successfully.

In addition to all the things customers have going on in their busy lives, we are bombarded daily by all kinds of marketing messages. Maintaining a cohesive brand identity is critical to standing out in consumers minds, and consistency of product and marketing is a key part of that.
 
#27 ·
Not to mention that nobody really thinks about the engineering that goes into building a new car/truck. Its only been a few years since we pulled our selves up out of the crap we were left to build. Chrysler has gotten way more right then they have wrong in that time.
 
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#29 ·
Jeep will do fine, that Renegade will be a hit - saw it at the auto show. Maserati and Alfa are the problems - they cannot produce that many new cars and keep the quality up, and going head to head against the German brands are a tall order. And the dealer networks for those cars just aren't there - they have to break away from the Ferrari dealer network because those aren't car dealers, buying a Ferrari is like joining a snooty country club, and that won't fly when selling cars in a competitive segment.
 
#30 · (Edited)
Maserati and Alfa are not meant for the "American" market. They are meant for the SF, LA, NY and maybe a few other markets. Count the ratio of imports to domestic cars on SF roads. And what Marchionne might be betting on is that some of those buyers are getting bored with MB, Audi and BMW. That's his chance when it comes to Alfa and Maserati. Chrysler is finally above 5% in California: "Chrysler Group retail share increased to 5.8 percent in 2012, up 0.9 percentage points from 2011."

And Fiat now sells almost as many cars as MINI (now that their sales have declined). Of course, it does seem a little ridiculous that someone like Porsche sells almost as many cars as Fiat or Mini.
 
#35 ·
In fairness to Dart and its peers in that segment: driving a Challenger can be sensory overload of the best kind.

From that starting point, we're bound to find pretty much every other car out there pretty bland and nondescript by comparison.
 
#38 ·
Very true...and therein lies the reason for the Dart's poor sales. It's peers are well established and have a built in customer base. In order to steal those customers away from the Focus, or the Civic, the Dart needed to burst out of the gates and make a point of saying "See, we can do what they have been doing better for less money". But it didn't...instead it idled out of the gate wearing a custom license plate that says "CIGOT12". It's a completely middle-of-the-road car for middle-of-the-road money, so with nothing to differentiate itself from the pack, the Civic and Focus loyalists have no reason to go buy a Dart.
 
#36 · (Edited)
The problem with SRT as a brand is not that it never should have happened, I think it could have been done, and done well if executed properly, the issue was they were never committed to it, they dipped in a toe instead of jumping in, and that is always the fastest way to failure. A brand has it's own marketing, which they did, albeit not that successfully, it needs it's own image, which I think they were doing a good job of cultivating. However a brand means, having its own dealers, service and cars. The cars part started with the viper, which of course wasn't a huge seller, and they were starting to brand the other vehicles as SRT more than in the past. Where the disconnect is/was the fact they were trying to make a premium brand to compete with mercedes, bmw, porsche etc, but at the end of the day you have the unfortunate experience of having to purchase your car at an existing dodge dealer, and even worse have it serviced there.nyiu can't charge nordstrom prices and have a walmart experience. No loaner cars, no premium experience, just cattle call, sales people that know little, and techs and service writers that typically don't care about the difference of an SRT from a minivan. If they committed the resources they did to making the separate fiat dealerships, which IMO is a great concept, and applied that to SRT, that would be a big move In the right direction for actually having a brands that was never going to happen though, we discussed this at length with Ralph, and as much as he wanted to do things like that, it was never going to happen. FCA never committed to SRT as a brand so it was doomed from the start.
 
#41 ·
I think that is spot on. I mean they didn't even remove the dodge, Chrysler and jeep name plates. I would have thought by 13 models they would have been SRT. They never committed is right on.
 
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#37 ·
We are all CEOs on this forum saying what we would do or what they should do going forward. Sergios plan is very agressive I must say. But, in the 2009 the 5 year plan a lot of people thought the same thing.

SRT as a brand was a dumb idea if you ask me. But, again, I think the trucks should have stayed as Dodge trucks too.

Chrysler as the mainstream brand I don't really like either. To me this should be Dodge, mainstream vehicles and performance vehicles. Chrysler should be upscale. Jeep is on a roll there is no doubt.

I guess we will see how it all works out over the next 5 years. I hope they are right and 90% of it all works as planned.
 
#40 ·
They need the sales to the masses first... performance is a small piece of the pie. A screaming performer isn't going to drastically help Dart sales.
 
#43 · (Edited)
Until someone writes a book, we won't know for sure how it happened.

But based on how things played out, my guess is that stripping Viper from Dodge, and making SRT a stand alone brand was all part of Ralph's bid to Marchionne to save Viper.

Ralph may have figured he was unlikely to get the required attention from the Dodge organization (i.e., product planning, marketing, etc.) to help him save Viper. Especially in the wake of the bankruptcy, when everyone was tossing dead weight overboard, and trying to salvage more important models.

I can see Ralph pitching a "business plan" by which he got his wish to turn around Viper, and the SRT brand to help him do it. In return, he was to use Viper to make SRT a self sustainable brand. The problem was, the SRT organization did not have the resources to do much.

As others have said, it may have worked if SRT had gotten more money and attention. But I suspect that from the start this was a low priority to Marchionne: if Ralph made it work, all the better; if not, no big loss.

The other part of the problem is that Ralph seemed to believe that he would be able to kick start SRT with Viper and his personal celebrity status. The problem is, he mistook the allure of Viper: awesome brute American power for less money than the competition. By focusing on adding refinement instead of adding power, and by jacking up the price ridiculously, he turned Viper's value proposition upside down. In the process, he positioned Viper as a more direct competitor against models of more pedigree, instead of emphasizing what had made Viper so unique, warts and all. Stripping Viper off its brand didn't help matters, either. Then GM launched the new Corvette, and Viper became last year's news.

The moment Ralph went to Marchionne asking for money to develop Viper into a Corvette killer, Sergio must have brought up the hundreds of unsold Vipers collecting dust on dealer lots, and decided for all the visionary talent, passion and stamina Ralph brings, he lacks in business sense and execution. Time to take Viper and SRT away from Ralph, and give it back to the professionals at the Dodge Bros. business organization.

And the rest, ladies and gentlemen, is history...
 
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