Fiat Chrysler Automobiles is losing market share in North America’s crucial crossover market, but the Italian-American automaker is hardly alone. According to a recent report from Bloomberg, all of Detroit’s Big Three automakers – FCA, GM, and Ford – are ceding sales to companies from overseas, and especially those from Japan.
Fiat Chrysler under late CEO Sergio Marchionne put a large portion of its recent crossover focus on premium brands Alfa Romeo and Maserati, whose respective Stelvio and Levante crossover models are hardly a blip on the radar. The Jeep brand received some investment over the past couple of years, too, although only a portion of it went into new crossover products; much of it was spent on a complete redesign of the hardcore Wrangler off-roader, and mid-cycle actions (MCA) for the Cherokee, Grand Cherokee, and Renegade.
Yet that both of Fiat Chrysler’s Detroit-based rivals are also losing market share in the North American crossover segment suggests that the loss of ground has more to do with what Japan is doing right than what America is doing wrong.
“The Asians and the Europeans are taking over crossovers in the U.S. by adding new models and more manufacturing capacity,” says independent auto analyst Alan Baum. “They did the same thing in cars 10 or 20 years ago. In Detroit, this puts even more pressure on trucks.”
How much more manufacturing capacity? According to Bloomberg, Honda will soon have four North American plants building the compact CR-V, with about half-a-million units of total capacity. Those plants also build a range of other models, and can change their output relatively quickly should consumer tastes change.
By contrast, FCA’s plant in Belvidere, Illinois, where the Jeep Cherokee is built, is on-track to put out roughly a quarter-of-a-million units this year. The facility produces no other FCA vehicle models.
As Fiat Chrysler and its Detroit rivals continue to lose crossover market share in North America to overseas competitors, the Big Three is projected by Baum to represent just 35 percent of North America’s crossovers by 2023, down from 61 percent in 2005. That’s not as big a hit as the three automakers are expected to take in the car segment, where Big Three market share could drop from 53 to 16 percent between 2005 and 2023, but it’s still significant, and it could force FCA and its rivals to rely more heavily on trucks and big, body-on-frame SUVs for sales.
At a time when oil is quickly increasing in price, that’s not an ideal position to be in.