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Fiat Chrysler Automobiles' new CEO Mike Manley has a lot on his plate. He has address multiple challenges in the U.S. that were left by the passing of Sergio Marchionne last month - moving forward with the five year plan, figuring out the future of Chrysler and Dodge; and getting new vehicles out the door. But that doesn't compare to the challenges in Europe. The Wall Street Journal reports that Manley has a number of issues that need be addressed. The biggest one is improving the overall profitability in the region. Last year, FCA had an operating profit of $5.96 billion in the U.S. In Europe, only $840 million. A key reason for this is that three-quarters of FCA's European sales are made up of Fiat models that have razor-thin profit margins. Each Fiat sold makes an operating profit of €250 ($288), compared to the average of €2,850 ($3,274) for every Jeep and Ram model sold. Alfa Romeo was seen as a possible way to help boost profits, but sales have fallen very short of targets in a market where the likes of the Audi, BMW, Lexus, and Mercedes-Benz dominate. “FCA would need a merger to improve the profitability in Europe,” said Martino De Ambroggi, an analyst with Equita told the journal. Marchionne tried his best to court FCA to other automakers such as GM, but to no avail. Earlier this year, FCA said the search for a possible partner was taken off the table and that it could survive on its own. There is also the question as to whether FCA has too many workers in Europe. The region makes up about 36 percent of FCA's workforce, but only a tenth of its profit. A key example is FCA's Mirafiori plant which employs 13,000 people, but is on track to build 50,000 vehicles this year. In 1997, the plant produced 463,000 vehicles. Source: Wall Street Journal (Subscription Required) -
Fiat Chrysler Automobiles' new CEO Mike Manley has a lot on his plate. He has address multiple challenges in the U.S. that were left by the passing of Sergio Marchionne last month - moving forward with the five year plan, figuring out the future of Chrysler and Dodge; and getting new vehicles out the door. But that doesn't compare to the challenges in Europe. The Wall Street Journal reports that Manley has a number of issues that need be addressed. The biggest one is improving the overall profitability in the region. Last year, FCA had an operating profit of $5.96 billion in the U.S. In Europe, only $840 million. A key reason for this is that three-quarters of FCA's European sales are made up of Fiat models that have razor-thin profit margins. Each Fiat sold makes an operating profit of €250 ($288), compared to the average of €2,850 ($3,274) for every Jeep and Ram model sold. Alfa Romeo was seen as a possible way to help boost profits, but sales have fallen very short of targets in a market where the likes of the Audi, BMW, Lexus, and Mercedes-Benz dominate. “FCA would need a merger to improve the profitability in Europe,” said Martino De Ambroggi, an analyst with Equita told the journal. Marchionne tried his best to court FCA to other automakers such as GM, but to no avail. Earlier this year, FCA said the search for a possible partner was taken off the table and that it could survive on its own. There is also the question as to whether FCA has too many workers in Europe. The region makes up about 36 percent of FCA's workforce, but only a tenth of its profit. A key example is FCA's Mirafiori plant which employs 13,000 people, but is on track to build 50,000 vehicles this year. In 1997, the plant produced 463,000 vehicles. Source: Wall Street Journal (Subscription Required) View full article
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For the past few years, luxury automakers have been trying to fill every single niche they could think of. It's why we have such models as the BMW 5-Series GT and Mercedes-Benz GLC-Coupe for example. But now, BMW and Mercedes-Benz admit they have too many models and are planning to cut some. “The checkerboard of body styles and segments is rather full, although there are still a few to be finished. We’ve got an X2 and an X7 coming, and there are a few others, but I also know—because we’ve taken decisions—that some body styles will be removed in the future,” said Ian Robertson, BMW’s head of sales and marketing, to Car and Driver. “There’s definitely more of a move toward four-door coupes. We’ve done the Gran Coupes; they’ve really worked. People like the lower seating position and the sporty dynamics but also the fact there’s a door in the back. It’s fair to say that when we look at the checkerboard, because of the new things we’re putting in, there are some things we can take out,” Robertson went on to say. Dieter Zetsche, head of Mercedes-Benz cars harbors the same thoughts. “The specialty cars, these coupes and convertibles, were always niche cars. The expansion into China and other emerging markets [has given] huge opportunities for sedans, but they did not take up these specialty cars. Which makes the business case for these vehicles less easy.” Yep, it seems coupes and convertibles are on the chopping block - not the SUV-coupe things you were likely hoping for. Now Zetsche did say that would still offer two-door models, but it would not be “in the variety we are having them right now.” Taking into consideration there are coupe and convertible versions of the C, E, and S-Class, along with the SLK and SL roadsters, and the AMG GT coupe and convertible, we wouldn't be shocked if a couple of those models disappear. Source: Car and Driver View full article -
BMW and Mercedes Admit They Have Too Many Models, Plan Cuts
William Maley posted an article in Automotive Industry
For the past few years, luxury automakers have been trying to fill every single niche they could think of. It's why we have such models as the BMW 5-Series GT and Mercedes-Benz GLC-Coupe for example. But now, BMW and Mercedes-Benz admit they have too many models and are planning to cut some. “The checkerboard of body styles and segments is rather full, although there are still a few to be finished. We’ve got an X2 and an X7 coming, and there are a few others, but I also know—because we’ve taken decisions—that some body styles will be removed in the future,” said Ian Robertson, BMW’s head of sales and marketing, to Car and Driver. “There’s definitely more of a move toward four-door coupes. We’ve done the Gran Coupes; they’ve really worked. People like the lower seating position and the sporty dynamics but also the fact there’s a door in the back. It’s fair to say that when we look at the checkerboard, because of the new things we’re putting in, there are some things we can take out,” Robertson went on to say. Dieter Zetsche, head of Mercedes-Benz cars harbors the same thoughts. “The specialty cars, these coupes and convertibles, were always niche cars. The expansion into China and other emerging markets [has given] huge opportunities for sedans, but they did not take up these specialty cars. Which makes the business case for these vehicles less easy.” Yep, it seems coupes and convertibles are on the chopping block - not the SUV-coupe things you were likely hoping for. Now Zetsche did say that would still offer two-door models, but it would not be “in the variety we are having them right now.” Taking into consideration there are coupe and convertible versions of the C, E, and S-Class, along with the SLK and SL roadsters, and the AMG GT coupe and convertible, we wouldn't be shocked if a couple of those models disappear. Source: Car and Driver
