Fiat Chrysler Automobile (NYSE:FCAU) has announced plans to expand on their leading Jeep brand as it looks to offset slowdown experienced in the auto industry. In the next three years the American-Italian car maker is planning to increase its Jeep sales through the addition of larger sport-utility cars to their showrooms.
Reintroduction of the Grand Wagoneer
The company also seeks to reintroduce the Grand Wagoneer and also reignite growth in the Chinese market. Equally the company will roll out plug-in hybrid car versions of its Models in Europe and the US, regions where the company has had to purchase credits in order to comply with carbon emission rules. Fiat Chrysler is focused on phasing out the manufacture of diesel engines in the regions by 2021. This is a systemic transformation and the company has so far committed $10.5 billion towards electrification of their top cars through 2022.
According to company executive Mike Manley the Fiat Chrysler has a clear strategy that they have and are planning to invest in. The company is seeking collaborations with other companies and Manley indicates that with the partnerships they are thinking about the customer-car interface.
Fiat Chrysler seeks to improve margins with expansion
In the second quarter 2019 the company’s operations in the Middle East, Europe and Africa were marginally profitable and in 2018 they attained a 1.8% profit margin. There are plans to overhaul the company’s European mass-market that is mostly dependent on its Fiat brand. The company has projected 3% profit margins in other regions compared to the 10% they have predicted in their North American Market.
The company is expanding the Jeep sport utility cars in Europe as it looks to meet demand and increase profitability. Manley indicated that the launch of the redesigned Fiat 500, hybrid and electric models as well as other larger vehicles will also increase their margins in the market.
Going forward the company will seek to increase margins even if it means sacrificing sales volumes. Manley indicated that margins in Europe will be very vital for the company in the next five years.