Monday, June 15, 2015

Summer 2015 Product Launches Part I and Fiat-Chrysler Automobiles' Catch 22

Alexander Carabitses

I'm finally back, I know it has been a while since my last post and for that I apologize, but I'll have some exciting content coming in the next few weeks so stay tuned.

Before I get into my editorial rant, I think its a good idea to highlight the new products that automakers have unveiled this summer, so let's jump right into that.

2016 BMW 3 series: A very minor and unimpressive refresh to BMW's cash cow.
2016 BMW X1: BMW's worse crossover is currently the X1, but its been redesigned and it looks like an improvement.
2016 BMW 7 series: Does anyone else find it odd that BMW's most significant introductions happened this summer, and not the past auto show season?  Anyway, just as I predicted in my last post, BMW unveiled the new 7 series.  It looks good for sure, but it isn't pushing the needle by any stretch of the imagination.  It features some new technology, such as gesture control for the I-Drive system, but it isn't as much of a technology breakthrough as the S-Class which can drive itself for about 13 seconds.  None the less, it looks like a great car, and given how much BMW has been focusing on electric cars, M cars, and crossovers, it is nice to see that the mainline of cars is getting attention again.

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2016 Mercedes G Class: This is nothing more than a refresh, which adds powertrain upgrades and a slew of new colors.
2016 Mercedes SLK:  There is one new powertrain, the manual transmission is gone, and that's about it.
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2016 Chevrolet Camaro: New powertrains, handling upgrades, and a complete redesign inside and out, make this car quite desirable and freakin' awesome!
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2016 Dodge Viper ACR: It's a road legal track car, like the Porsche 911 GT3.  The only difference is the crowd that this model will appeal to. 
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2016 Hyundai Santa Fe Sport: The new Santa Fe Sport made its South Korean debut, and seeing as how its only a light refresh, there isn't anything worth noting
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2016 Jaguar XJ:  Jaguars flagship sedan receives a very light refresh for the 2016 model year, with minimal design and powertrain upgrades.
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2016 Volkswagen Jetta GLI: The new Jetta GLI receives the similar updates with those received by  the rest of the Jetta line, last year.  However, it also adds the same turbo 4-cylinder thats available in the new GTI.

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That is all for now, but both the 2016 Chevy Cruze and Alfa Romeo's new sedan are debuting on June 24, 2015, while the new Mercedes-Benz GLC will debut on June 17th. On July 4, Fiat will unveil the facelifted version of the 500 and 500c, so stay tuned.  On a side note,  Ford is considering bringing the Ecosport subcompact crossover to the U.S. in 2017.

Part II:  God Help FCA U.S. LLC

While studying for the last of my six final exams last Wednesday, I persuaded myself to visit AutomotiveNews.  While on the website, I had a horrible discovery.  Remember that 5 year product plan that FCA showed last May?  Well, there were a lot of products on that portfolio, many of which analysts expected to be delayed, and for a good reason.  Fast forward one year and almost the entire portfolio of future products is changing, for the Chrysler brands at least.  Here are the changes.

VehiclePlanned LaunchNew Launch Date
Chrysler 30020182019 or later
Chrysler D-segment Crossover2018Idea shelved
Chrysler E-Segment Crossover2017Idea shelved
Dodge Charger20182019 or later
Dodge Challenger20182019 or later
Dodge Dart20162019 or later
Dodge D-segment crossover20162019 or later
Jeep Grand Cherokee20172018
Jeep Grandwagoneer20182019 or later
Jeep C-segment CrossoverSpring 2016late 2016/early 2017
Jeep WranglerEarly 2017Summer 2017(July)
Ram 1500Mid-2017Late 2017(November)

Just to clear the air for a second, both the Dodge Dart and the Dodge Journey will receive mild refreshes in 2016 before their 2019 redesigns ( we can hope that they go a little further on the Journey refresh than a new foglight and grill.  A refresh like the one received by the Challenger and Charger would be welcomed for sure).

Many people thought Alfa Romeo's product portfolio would be delayed based on past experience, but FCA CEO Sergio Marchionne wanted to prove the media wrong.  Anybody who questioned his dream of matching Audi's sales numbers by 2018 would be crushed.  So one day Sergio gathered all of his Fiat-Alfa Romeo dealers and said, "This time there will be no delays at all.  I can afford to build these models, here are the financial numbers, see for yourselves."  After looking at the numbers the dealers believed him and said "Okay, that's great!"  "However", said Sergio, "There is a catch."  "What's the catch" asked one of the dealers.  Sergio responded, "Well, for years I have starved your Fiat dealers from product, but now to stop that trend and to give you product in that area, your Chrysler Jeep Dodge Ram dealers will be starved from the new products we promised last year."  

My story could point to one possibility of why there are so many delays, but there is another strong case to be made for why all of this is going on.  FCA is making money on Jeep and Ram pickup trucks in the U.S.  European sales are slow, and Chrysler lacks a strong presence in China.  This means that Chrysler is low on cash.  Anyone who hasn't been living in a cave knows that Sergio is looking to merge with another car company, while saying that consolidation is the future, as it serves as a means of sharing product development costs.  According to, it is quite likely that Sergio wants to delay new product launches to save money, so he can negotiate in a position of strength if he finds a partner.  

There are two problems with this though.  First of all, no car company wants to merge with FcA, and his recent bid to win GM over is the equivalent of a desperate high school nerd, begging the hottest girl in school to go to senior prom with him.  Many expert analysts say that Sergio should look to merge with a Chinese car company, given how week Chrysler's presence in China is, and I agree.  In many ways, its scary that FCA lacks a presence in the world's biggest car market.

Here is the second problem.  If nobody wants to merge with FCA, they are shooting themselves in the foot as they hold back more products.  On top pf that, Sergio is delaying the products that will actually be profitable right off the bat, like the next-gen Grand Cherokee, the new Ram 1500, the Jeep C segment crossover that will replace the Compass and the Patriot, and the Dodge Journey replacement.  The delay of the Wrangler isn't that bad, as it would be very patriotic if the thing launches on July 4 2017.  Some will also argue that the delays of the Jeep C-segment crossover and Ram 1500 aren't that bad either, but everything else is astonishingly bad.  Year long delays are bad, and when the two words "or later" follow the new launch date, your immediate thought is, "Geez they must be struggling financially."  Whether Sergio is trying to save money, or is being sneaky in order to trick another car company that FCA is financially weak, so they'll go along with anything, is anybody's guess, even though the latter would more than likely end with FCA being sued and Sergio going to jail.  Still, if Chrysler wants to delay products, they should delay certain Alfa models that the world doesn't need right now.  That means launch the new sedan on the 24th of this month, launch the 2 Alfa crossovers, and call it a day.  As exciting as the other Alfa models seem, the next generation Grand Cherokee is much more important for the company's overall health.  Any Alfa product that could overlap with a new Maserati product should be delayed, in my opinion.

FCA is trying to find a company to merge with, while also trying to prove the automotive media wrong, that Alfa Romeo's new products will launch on schedule and sell like hotcakes.  But in doing this, Sergio Marchionne may be proving the automotive media right.  After all, many auto journalists did predict delays in the 5 year product plan, and that some products wouldn't happen at all.

Have a good week.

1 comment:

  1. Thank you for compiling this list of car updates. I enjoyed reading through all of the changes for some of the new models. I am excited to see some of the updates in these vehicles and a little disappointed in the lack of upgrades and much needed changes in others. I am looking forward to what next year might have in store.