Australia a linchpin in Fiat Chrysler juggernaut
BY BARRY PARK | 3rd Jun 2014
In an interview with GoAuto this week, Fiat Chrysler Group Australia chief executive Veronica Johns said a big jump in sales for a number of the group’s brands, which includes US brands Jeep, Chrysler and Dodge, and European marques Alfa Romeo and Fiat, had already taken significant steps in achieving its parent company’s plans.
“We’re obviously on a big growth spurt, and we have been for three years, so we’ ve already doubled sales,” Ms Johns told GoAuto at a pre-launch event for the group’s next crucial model, the Jeep Cherokee small SUV.
“If you look back, in 2009 we sold 9500 cars and last year we sold 34,000 cars, so we’ve been on a very big growth plan for the last three-and-a-half years.
“We’re already doing really well. I don’t like to talk numbers because it is irrelevant to anyone outside of our four walls.” Based on the group’s Australian sales so far in 2014, this year is also looking to be a big one, potentially snaring more than 40,000 new-car buyers if the momentum continues as expected.
This will come off the back of key new volume-selling vehicles such as the Cherokee, all-new halo cars like the stunning Alfa 4C coupe and the continuation of an aggressive, big-budget sales and marketing strategy that has brought updated models, major price cuts and a high-profile position in the marketplace.
Australian sales for most of the group’s brands have already grown significantly in the first four months of this year, with May providing “another strong month” of sales for the company.
VFACTS figures for May are due out tomorrow (June 4), but in the first four months of this year sales for the Alfa Romeo brand (909 units) were up 122 per cent on last year, Fiat (1979) was up by a massive 427 per cent and its all-important flagship brand Jeep (8758) was up 31 per cent on last year.
Dodge, which is limited to the Journey people-mover, and Chrysler, with the 300 large car and Voyager MPV, have both softened so far this year.
However, Ms Johns said plans were already in place to build sales across the board, and in line with its US parent’s expectations.
“I’ve been at Jeep for the last 16 years, and they always plan out seven years in advance every year – it’s like a rolling program,” she said.
“We’re always working on new things, current models, and the future is always being spoken about.” Central to the company’s ambitions is Jeep, which accounts for two-thirds of Fiat Chrysler’s sales volume in Australia and under the recently released global five-year plan was designated a “lead brand” that will grow its manufacturing base, add new model lines and double production to 1.9 million vehicles by 2018.
With the new city-oriented Renegade joining the Cherokee in 2015, followed by another still-to-be-named compact model (replacing both Compass and Patriot) in 2016, an all-new Grand Wagoneer seven-seater due in 2018 and a heavily upgraded Grand Cherokee thrown into the mix as early as next year, Jeep is hell-bent on reclaiming the title of world’s biggest SUV brand.
Australia will be a key part of this, with global Jeep chief Mike Manley making it clear to Australian journalists, including GoAuto, at the Geneva motor show in March that he wanted to see Jeep as not just the top SUV brand in Australia but in the top 10 of overall vehicle sales.
Ms Johns played down those expectations this week, saying that a top-10 position was less of a priority for the company than achieving its internal goals.
It also has issues such as supply of Grand Cherokee – easily Jeep’s biggest-selling model – to iron out, although once that occurs Jeep’s sales volume is expected to improve even further.
“We joke because it is quite funny how they come out with the top 10, because it is the top 10 of what?” Ms Johns said. “We add all ours together and we’re at number nine.
“It (being in the top 10 Australian brands) is not really a priority for us. We don’t look at what everyone else is doing and we don’t try and be better than the next competitor.
“We just want to be the best that we can be and as soon as you come out and start making statements such as, ‘We want to sell X amounts of cars’ or ‘We want to get X amount of market share’ and all of that, what’s the point? “You’re only going to sell as many as consumers buy, and anyone that thinks any differently than that…” On Grand Cherokee supplies, Ms Johns said: “We’re going to do as many as we can get in as many numbers as we can take.
“For Jeep, we haven’t hit that (high-water) mark yet because you’ve still got backorders for three to six months on some models – on Overland, SRT, Limited and Laredo. It’s just production (limiting numbers).
“I think Grand Cherokee will continue to do what it is doing because we haven’t been able to supply demand even now.” Australia is currently the second-largest market for Grand Cherokee outside of North America.
However, plans to start building the large SUV in China to cater for Asian buyers’ discerning tastes could soon bump Fiat Chrysler Group Australia from that ranking.
The Grand Cherokee will also face a new enemy within, with the smaller, more stylish Cherokee expected to become a volume seller for the brand, potentially eating into the cheaper end of the bigger SUV’s sales.
The Cherokee, which launches late this week, reintroduces Jeep to a market segment it has stood outside for the past 18 months.
Ms Johns said the car-maker may have to look at the size of its dealership network to accommodate expansion plans, with Renegade coming late next year and other models following close behind.
“Three years ago we had 59 dealers and now we’ve got 104 for Chrysler, Jeep and Dodge,” she said.
“We’ve obviously got a lot of dealers around the country putting their hands up for the brands … and there might be a few open points that we need to close off.” However, she said most of the company’s plans for how it would expand would remain confidential.
“I can’t give away all the secrets,” Ms Johns said. “I don’t want everyone else taking the recipe.”
