Fiat Chrysler Automobiles (FCA US) will eventually discontinue the Chrysler 200 and Dodge Dart, increase Jeep SUV and Ram truck production, and roll out additional hybrids by 2018, the automaker announced as an update to its 5-year business plan.
FCA US is shifting its product strategy in the U.S. market as a response to persistently low gasoline prices and a shift in demand toward utility vehicles and trucks over passenger cars, CEO Sergio Marchionne said during a Jan. 27 conference call with investors. The company is also dealing with higher recall costs.
While discussing the FCA vehicles offered in the U.S., Marchionne said the company has incorporated a "permanent shift in demand" from cars to trucks and utility vehicles. Since 2009, FCA has seen its sales reflect this shift. That year, FCA sold 56% cars, 29% utility vehicles, and 15% trucks. In 2015, FCA sold 46% cars, 37% utility vehicles, and 17% trucks.
"There are two cars in particular, the Dodge Dart and Chrysler 200, which will run their course," Marchionne said. "Without creating additional capacity, we need to reutilize those plant infrastructures to try and deal with the development of Jeep and the Ram brand."
Marchionne perhaps foreshadowed the announcement about the Chrysler 200 earlier this week, when he said the car was "not up to snuff" because of its cramped rear seating.
FCA US executives gave some initial details about their expansion plans for Jeep and Ram. The company hopes to sell 2 million Jeeps globally in 2018. In 2015, FCA US sold 1.2 million Jeep vehicles — the most in the brand's history and a more than 50% increase from 2013.
Marchionne said FCA US is working to open up production capacity for the Wagoneer and three-row Grand Wagoneer expected to arrive around 2018. FCA plans to introduce the next-generation Wrangler in 2017. A North Carolina defense contractor is now negotiating to return a military-spec Wrangler to the battlefield, the Detroit News reported.
The Chrysler 200 is built in Sterling Heights, Mich., and the Dodge Dart is built in Belvidere, Ill. FCA US is expected to move production of its Ram pickup to Sterling Heights and its Jeep Cherokee to Belvidere, reports the Detroit Free Press.
To meet increasingly stringent greenhouse gas emissions regulations, FCA US plans to produce gasoline-electric hybrid and diesel-powered versions of its Wrangler, upcoming Chrysler Pacifica minivan, and Ram 1500.
The business plan updated a 5-year plan announced in 2014.
View the full business plan here.