The managerial style of Sergio Marchionne, when it comes to his light-handed way of handling numbers, has always been up for discussion. We could refer back to the various promises he made to bring Alfa Romeo’s production back to 300 thousand units, or we could mention his 2010 announcement of a plan to invest 20 billion in the construction of italian production plants.
The most recent chapter of the saga has to do with Jeep. A few weeks ago in Detroit, Marchionne declared that he thought it possible that Jeep — the most famous brand of the newborn FCA — could cross the finish line of 2014 by having sold a million units, a prediction which would be a full year ahead of actual sales projections. In 2013 Jeep sold 732 thousand units, thereby taking this huge, hypothetical increase in future sales up to 268 thousand vehicles for this year—a 37 percent increase. Is this the same old song and dance?
If we take a look at the market in the USA for the month of January, we might be surprised to find a 38 percent growth in Jeep sales. Compared to last year’s figures for the month of January, sales jumped from 30 to 42 thousand vehicles. However, it’s a little early for Marchionne to cry victory.
Meanwhile in Canada, (responsible for 6 percent of the total sales of 2013) sales increased by only 100 units with respect to January of 2013. Additionally, the figures reported in the U.S. for January of 2013 appear not to be exactly accurate, if we consider the fact that the re-styled models of Jeep Grand Cherokee and Jeep Compass didn’t arrive on the U.S. markets until last spring.
All things considered, Jeep has three cards to play. The first is the new Cherokee, which during the months of November and December 2013 and January 2014, consistently exceeded the 10 thousand-vehicle monthly quota, and in the U.S. alone could potentially total 150 thousand vehicles sold (120 thousand more vehicles than in 2013).
However, an article in Consumer Reports — the most widely read magazine of American consumers — put a damper on all of this optimism coming out of Auburn Hills. The article defined the new Cherokee as “half-baked,” while most of the negative criticism was reserved for the 4-cylinder model, awarding it only 56 out of 100 points.
Sales from Europe are expected to contribute to a rise in numbers, as the Cherokee should hit European markets in April. It will be principally sold in its diesel version (1.6 and 2.0 Multijet Fiat). Then there will also be an increase in the production of the Jeep Wrangler (producing 223 thousand units—more than were actually sold in 2013) and the Jeep Grand Cherokee (at 261 thousand), which Marchionne maintains could be responsible for 20 percent of growth (80/90 thousand vehicles).
The Italian mini-Jeep is the third card they’re holding. It was introduced in Geneva, and starting in July it will be rolling off of Melfi assembly lines. According to the trade unions, production could reach 30 to 50 thousand units. When we add together 120, 90, and 40 thousand, we get 250 thousand. The one million mark might just be within reach.