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Jeep has lead role in Chrysler’s foreign growth strategy

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Jeep has lead role in Chrysler’s foreign growth strategy

BY MARK PHELAN

FREE PRESS COLUMNIST

SAN FRANCISCO — Jeep hopes to build vehicles in Russia and China and export growing numbers of SUVs from the U.S. to other countries around the world as the iconic American brand plays a lead role in Chrysler’s growth strategy.

The launch of the all-new 2011 Grand Cherokee SUV is the first step in a plan that is expected to give the brand famous for its rugged off-roaders at least three more new models by 2013. The Grand Cherokee just began arriving in U.S. dealerships. Jeep plans to sell it in 120 countries around the world. Exports from the Detroit plant that builds the Grand Cherokee begin later this year.

Rising sales in Europe and South America also figure prominently in Jeep’s plan, thanks to the sales and distribution networks of Fiat, the Italian automaker that owns 20% of Chrysler and will supply technology and parts to build a range of more fuel-efficient vehicles for the Jeep, Chrysler and Dodge brands.

“It’s a match made in heaven,” said Jim Hall, managing director of 2953 Analytics, a Birmingham forecasting firm. “Fiat doesn’t make the kind of vehicle that Jeep sells, and many of the markets where Fiat is strong are perfect for Jeeps.”

Chrysler expects Jeep to be the engine that drives its overseas sales to nearly a fifth of the automaker's business by 2014. The automaker wants its total sales outside North America to rise from around 100,000 last year to 500,000 in 2014.

"Jeep is obviously the brand with the biggest growth opportunity," said Michael Manley, the executive who runs both Jeep and Chrysler's international sales. "Jeep is our only brand that's known all around the world."

I spoke with Manley at a California state park south of San Francisco last week, after a daylong drive testing the new 2011 Grand Cherokee's off-road ability and on-road manners.

The Chrysler, Dodge and Ram brands all aim to sell some vehicles outside North America, but the emphasis will be on Jeep as Chrysler looks to grow and return to profitability.

"Jeep is the brand that has the most appeal globally," agreed Rebecca Lindland of consultant IHS Global Insight. "It has the most brand recognition around the world, but the vehicles must offer the unique capabilities people expect from a Jeep."

Jeep's high profile and strong image began with the Willys Jeep in WWII and continue today. It's a truism in the auto industry that Jeep is an under-utilized asset, a popular brand that should sell more vehicles and make more money than it does.

Previous attempts to cash in on that potential failed. DaimlerChrysler tried unsuccessfully to take Jeep in new directions. One, embodied by the rounded Compass compact, would appeal to urban buyers. The other would rely on boxy looks to convey rugged back-country appeal.

Under new management, Jeep is still looking to boost sales, but off-road capability and four-wheel drive are cornerstones of its new international push.

"The key in all foreign markets is 4x4 capability," said Jim Morrison, the marketing chief for Jeep. "Every Jeep must be the most capable 4x4 in its segment. That's the Jeep proposition."

The combination of go-anywhere capability and the comfort and advanced features of models like the new Grand Cherokee gives Jeep an appeal no brand but Land Rover approaches.

Russian production of Jeeps will play a major role in Chrysler-Fiat's new alliance with automaker Sollers. Jeep assembly in Chelny, east of Moscow, could begin in a couple of years and quickly reach 150,000 vehicles annually.

A return to production in China is also high on Jeep's priority list. Jeep was the first Western brand to build vehicles in China.

It began production in the 1980s, but never capitalized on its head start in what has become the world's largest market for cars.

Chinese Jeep production ended when the DaimlerChrysler alliance dissolved. Jeep will play a major role as Fiat tries to catch up with other automakers in China.

In addition to manufacturing vehicles in Russia and China, Jeep expects Fiat's far-flung sales network to increase sales in South America and Europe.

Italian reports say Fiat may build Jeeps at a plant near Turin, and Chrysler's U.S. plants will continue to build Jeeps for export.

While Manley expects the Wrangler and Grand Cherokee to sell well overseas, he sees more growth potential from the fuel-efficient midsize, compact and smaller models Chrysler will develop using Fiat platforms, engines and transmissions.

Those vehicles, which will replace the current Liberty, Patriot and Compass, should hit the road in 2012 and '13.

"We understand the capabilities and styling that make a vehicle a Jeep. We have access to the technology," Manley said. "Our engineers and designers have license to use that technology, as long as they use it to make a Jeep."

link:

http://www.freep.com/apps/pbcs.dll/article?AID=/20100620/COL14/6200498/1210/business01/Jeep-has-lead-role-in-Chryslers-foreign-growth-strategy&template=fullarticle

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Jeep to take global lead as Chryslers become Lancias in Europe

Automotive News Europe -- June 21, 2010 12:57 CET

(Bloomberg) -- Chrysler Group's Jeep brand will become the subsidiary's primary global make in the first half of next year as Fiat S.p.A. emphasizes the Lancia nameplate in Europe, a top executive said.

Chrysler's minivan, the Sebring and 300 models will be rebadged as Lancias across most of Europe at the end of the first quarter or early in the second, Michael Manley, Chrysler Group's international chief, said in an interview.

Sharing models among the brands is part of a plan outlined by Fiat and Chrysler CEO Sergio Marchionne in November, Manley said.

Chrysler aims for Jeep to account for half of Chrysler Group's international sales, up from closer to a third historically, he said.

The goal will be to have two brands -- Jeep and one other -- from the Chrysler Group in every market, Manley said at an event to introduce the new version of the Jeep Grand Cherokee last week in California.

“The brand is global, it's very well known everywhere around the world,” Manley said. “With our partnership with Fiat we can now focus on Jeep as an international brand.”

Fiat, which also owns Maserati and Ferrari, is trying to share engines and other parts among models from Fiat, Chrysler, Dodge, Jeep and Alfa Romeo brands to save $2.9 billion over five years.

Fiat controls the U.S. automaker through a 20 percent stake granted as part of last year's U.S.-backed bankruptcy.

U.K. keeps Chryslers

In Europe, some Dodge models will also be sold and the Chrysler name will be kept on the minivan in the U.K., Manley said.

Most of Lancia's approximately 125,000 sales annually are in Italy. Chrysler-badged vehicles will continue to be sold in Latin America and Asia, while the North American use of Chrysler won't change, he said.

Marchionne said April 21 that he plans to double revenue from cars and light-commercial vehicles to 51 billion euros ($63 billion) by 2014.

Fiat aims to boost deliveries by 73 percent in the period by expanding in Europe and emerging markets, re-entering North America and relaunching the Alfa Romeo and Lancia brands.

Fiat has a worldwide sales target of 3.8 million cars and commercial vans in 2014, compared with 2.2 million last year, Marchionne said April 21 in a strategy presentation. Combined with Chrysler Group, deliveries would total 6 million cars.

Read more: http://www.autonews.com/article/20100621/ANE/100629994/1193#ixzz0rV2BEYP6

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