When the CEO of Fiat Chrysler, Sergio Marchionne, announced earlier this week that production of the Chrysler 200 and Dodge Dart would soon end, we were surprised to say the very least. Some might say that Marchionne is simply crazy to get rid of the two volume sedans, but as Autoblog explains, the decision is all part of a bigger, long-term plan.
Under FCA’s newly formed strategy, the automaker will rely more heavily on Jeep and Ram sales to bankroll its business. It currently can’t produce enough Ram pickups and Jeep Wranglers, Cherokees and Grand Cherokees to satisfy demand, so making the products the focus of their business is a no-brainer.
FCA won’t be building any new plants to accommodate new products from Jeep and Ram going forward, however, so it must make changes in its production to accommodate them. With slow Dart sales (87,392 units sold in 2015), it’s no surprise it was killed off to accommodate more Jeeps and Rams. Sales of the 200 weren’t as weak (177,889 units sold in 2015), but FCA has recently had to idle the Sterling Heights, Michigan facility that builds the 200 due to the vehicle being overstocked, while the platn could be building more profitable Jeeps and Rams.
The death of the Dart and 200 are representative of Marchionne’s long-term plan for FCA. By trimming the automaker of rather unsuccessful products like the 200 and Dart, it may make it more appealing to a fellow company when Marchionne or his successor decides to seek out a merger with another automaker, just as Marchionne did with General Motors last year.
“This is FCA’s diet plan before the wedding to shed unwanted weight and to pad the bank account,” AutoPacific analyst David Sullivan told Autoblog. “It’s not a long-term plan but more of a Hail Mary pass to tidy up their appearance for an imminent tie-up with someone. There are plenty of brands with car-heavy lineups that Jeep and Ram would match up well with, but no one wants to deal with the baggage that is 200 and Dart.”
The only flaw in the logic is that it relies heavily on two somewhat-unpredictable factors. Gas prices must stay low in order for FCA’s truck and SUV-intensive plan to work. But if FCA doesn’t get into a merger with another automaker, it will be left with a bare-bones lineup that lacks compact and mid-size sedans, two of the industry’s core segments. To that end, Marchionne believes low gas prices are permanent, however, and he’s expectedly confident in FCA’s ability to execute a merger or find a partner.