FCA Sees Jeep Becoming Quite Big In Sales

Trying to figure what is going with Fiat Chrysler Automobiles and Jeep could be a full-time job. This week has seen Chinese Automaker Great Wall announce its intentions of possibly buying Jeep from FCA, before backtracking on that a day later. Then rumors surfaced that FCA is considering spinning off Maserati and Alfa Romeo, along with its components operations. Now there is another twist.

According to a report from Bloomberg, FCA believes Jeep could sell as many vehicles as a standalone automaker thanks to the increased demand for SUVs. The company forecasts that Jeep's annual sales will rise 30 percent to two million next year. FCA CEO Sergio Marchionne told analysts that the brand could deliver up to seven million vehicles a year if demand for SUVs keeps rising. 

But for Jeep to reach that ambitious sales goal, they would need to have their lineup (including the new Wrangler, Wagoneer, Grand Wagoneer) to sell 50 percent more vehicles than what FCA delivered last year.

“It seems pretty pie-in-the-sky at this point,” said Richard Hilgert, an autos analyst at Morningstar.

Hilgert does also note most observers thought it was crazy that Jeep could expand to 2 million in annual sales by 2018 - something that is likely to happen.

Marchionne also talked about why it would be a bad idea to split Jeep away from FCA.

“We do need to worry about the stump that’s left behind,” Marchionne said.

“If we start picking away all the things that appear to be interesting to people, then I think we’re going to end up with a sub-optimal business that cannot run.”

It should be noted that only a few months ago, Marchionne floated the idea of spinning off Jeep.

Source: Bloomberg