Detroit show: $US1b investment for Jeep

FIAT Chrysler Automobiles (FCA) will pump $US1b ($A1.4b) into its United States manufacturing facilities to move production of the Ram large truck out of Mexico, as well as boosting capacity for the now official Jeep Wagoneer, Grand Wagoneer and a seven-slot-grilled ute model.

While the move is in line with the car-maker’s production expansion strategy, the Ram announcement could be in response to increasing pressure from United States president-elect Donald Trump and threats to impose a 35 per cent tariff on Mexican-built cars.

It follows a decision by Ford in December last year, when it announced it had cancelled the completion of a new Mexican factory, redirecting funds to projects on US soil instead.

FCA’s significant investment will boost capacity at the Warren Truck Assembly Plant in Michigan where production of the Dodge Ram will be relocated, while also preparing the factory for the birth of the new Wagoneer and Grand Wagoneer Jeep SUVs.

Capital will also be shared with the Toledo Assembly Complex in Ohio to tool-up for the new Jeep ‘pickup’ model which, like the Wagoneer, has not been ruled out for the Australian market.

Right-hand-drive production versions were still hanging in the balance three months ago but an official announcement from FCA Australia said the company was still considering the potential of all three models for local showrooms.

“We are excited to confirm Jeep's commitment to expand its range with the Jeep Wagoneer, Grand Wagoneer and a Jeep pickup,” it said. “While it’s early days, we are in the process of creating a business case to expand the Jeep line-up in Australia, to bring these great new products to Australian consumers.”

More than 2000 jobs will be created with the site expansions and the upgrades, including modernisation, with both facilities expected to be complete by 2020.

None of the additions to the Jeep line-up have yet been revealed and technical details are thin on the ground, but the return of the Wagoneer name would end a hiatus of more than 25 years. In its previous generation, the SJ Wagoneer was put out to pasture in 1991.

FCA CEO Sergio Marchionne said the latest allocation of funds to US manufacturing was in line with a long-term strategy and pre-dated the discussions by the incoming US government to change import tariffs.

“The conversion of our industrial footprint completes this stage of our transformation as we respond to the shift in consumer tastes to trucks and SUVs, and as we continue to reinforce the US as a global manufacturing hub for those vehicles at the heart of the SUV and truck market,” he said.

“These moves, which have been under discussion with Dennis Williams and the rest of the UAW leadership for some time, expand our capacity in these key segments, enabling us to meet growing demand here in the US, but more importantly to increase exports of our mid-size and larger vehicles to international markets.”

A Jeep-branded one-tonne ute would appear to be a safe bet for the Australian market where the Toyota HiLux has just topped the tables as the country’s favourite car, and models such as the Ford Ranger consistently attract healthy sales figures among a growing range of models in the segment.

Mr Marchionne hinted that Australia may be in line for an expanding Jeep range as the company targets untapped potential in overseas markets.

“The expansion of our Jeep line-up has been, and continues to be, the key pillar of our strategy. Our commitment to internationalise the Jeep brand is unwavering, and with these last moves, we will finally have the capacity to successfully penetrate markets other than the US which have historically been denied product due to capacity constraints,” he said.

“In addition, these all new products will reach new consumers as well as those that have been part of the Jeep tradition”.