Fiat Chrysler Automobiles (FCA) is adjusting its product plans announced in May 2014, reports Bloomberg News, citing sources familiar with the matter. Specific changes include delaying the launch of a new sports car from Maserati, the Alfieri, and a sport utility vehicle (SUV) and a full-size sedan from Alfa Romeo. FCA CEO Sergio Marchionne has reportedly decided to update the Alfa Romeo MiTo supermini, which had been slated to be dropped, and the Giulietta small family car, now slated for the market in the first half of 2016. The Alfa Romeo sedan had been expected in 2017 and the SUV in 2016, and the Maserati Alfieri had been expected in 2016. Marchionne will announce the changes in January 2016, according to the report. Bloomberg's sources say that the reason given for the changes is the slowing Chinese market, which FCA counted on for a substantial source of new sales. Products on track include the Maserati Levante SUV, due to be revealed at the 2016 Geneva Motor Show, and a new mid-size SUV for Jeep.
Significance: The Alfa Romeo full-size sedan was planned largely for the Chinese market. Delaying the Alfa Romeo SUV and the Maserati sports car means delaying high-margin, high-profit products. FCA is struggling with EUR10.3 billion (USD10.8 billion) of debt and is losing reliable profits from its accounts by spinning off the Ferrari brand. FCA's 2014 five-year plan also included a target of increasing sales in the Asia-Pacific region from 200,000 units in 2013 to about 1.1 million units in 2018. FCA's Chinese sales were down 26% in the third quarter, in part because of the temporary closure of a port in the country. The third-quarter Asia-Pacific sales for all FCA brands, including joint ventures, reached 62,000 units, compared with 48,000 units in the third quarter of 2014. The ambitious plan laid out in May 2014 has been under intense pressure because of project delays and missed production targets. Jeep remains the company's success story, delivering consistently improving global sales and profits.
