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Old 01-29-2016, 06:03 PM   #3
mryan55
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Join Date: Mar 2013
Posts: 595
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I think much of this will come to fruition. The Cherokee going to Belvidere has been assumed since the UAW deal last year, same for the increase in Metro Detroit Ram production and possibly bringing small SUV like the Journey "home" from Toluca, but we will see what happens.

The only thing that I have a hard time wrapping my head around is dropping the Dart and 200. Are they perfect vehicles in the segment? Heck no. Is market and registration where it needs to be on these models? Nope, except maybe in lease-heavy markets, but even Chrysler Capital and Ally learned their lessons on the Dart and have totally dropped the lease program over the last 18 months.

But to concede an entire segment to the competition? No it's not even a question of if the Mitsubishi Lancer or Dodge Dart is the 'better' car in the battle of the "most mediocre midsizer." We will just concede what little share we have to everyone else.

I know, gas prices are low and everyone is trending back toward SUVs and pickups. This is fine -- it has happened before when energy prices are low, but this puts FCA in a very precarious position if we see an near-overnight doubling in gas prices as we did in April and May of 2008.

A knee-jerk reaction will everyone rush to 'trade down.' We've been there before. We will be there again. FCA dealers have probably felt it more than anyone. It led the Cerberus-era Chrysler Group LLC to bankruptcy, near extinction, and guaranteed extinction for 789 dealerships, including our Jeep-only point.

Fiat was supposed to bring its small car expertise to the table in this marriage. They certainly have. The Dart is a huge step from the Caliber and the and the UF body 200 is a huge step from the JS body Sebring and 200. Why would we give up on those improvements now? Especially after huge investment in SHAP for the production of the UF 200 in 2014.

Our only 4-door sedans will be the Charger and 300. Granted, pricing largely overlaps the current 200, but only in rear-wheel drive packages. Even an AWD Charger SE has an MSRP of $32k+ with no options.

We will see what happens. At the end of the day, with cheap gas, SUV and truck craziness right now, the discontinuation of the Dart and 200 product lines will not even put a dent in most of our pocketbooks. Combined, they are less than 5% of my store's volume. But what will happen if there is another 2008?

I don't know if counting on a partner to source small cars is the best solution either. It is definitely possible, but why partner with someone else when the investment has already been made in WCM facilities in the US? How much more will it cost to retool SHAP for something else when you consider $1B was just spent a few years back.

It will be interesting to see how things pan out, but it looks like Fiat's small car expertise in this joint company is giving way to salivating corporate folk looking at the prospects of Jeep and truck profits.
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