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FCA goes all-in on Jeep and Ram brands on cheap gas bet

It's no surprise that as SUV and truck sales remain strong in the wake of unusually cheap gas, Jeep and Ram sales are taking off. What is a surprise is that FCA CEO Sergio Marchionne thinks that cheap gas will be a "permanent condition," and feels strongly enough about it to change up North American manufacturing plans. Jeep appears to be the biggest beneficiary of the product realignment. In addition to increasing the sales estimates for the brand worldwide upwards to 2 million units a year by 2018, the brand will get a flood of investment for new product and powertrains. Consider the Wrangler Pickup to be part of the salvo, as well as the Grand Wagoneer three-row announced in 2014 as part of the original five-year plan. The Wrangler four-door will get at least two new powertrains, a diesel and mild hybrid version, in its next generation. That mild hybrid powertrain may utilize a 48-volt electrical system like the one that's being developed by Delphi and Bosch – which the suppliers think will be worth a 10 to 15 percent fuel economy gain at a minimum. Down the road, in the 2020s, the Wrangler could adopt a full hybrid system. The diesel powertrain is planned for 2019 or 2020. The Ram 1500 is also pegged to receive a mild hybrid system, again potentially based on 48-volt architecture, sometime after 2020. Lastly, Jeep and Ram will take over some of the production capacity of existing plants. The Sterling Heights, MI, plant that builds the Chrysler 200 will now build the Ram 1500; the Belvidere, IL, facility that produces the Dodge Dart will take over Cherokee output; the big Jeep facility in Toledo, OH, will be used for increased Wrangler demand. In 2015, according to FCA's numbers, car and van demand went down by 10 percent, but SUV demand went up 8 percent and truck demand 2 percent. Considering that these are high-margin vehicles, FCA can't ignore the math. FCA also won't build any new factories to supplement production to meet demand, but instead are reshuffling production priorities. Think of it this way: FCA is gambling on cheap gas being a permanent part of our lives, at least into the 2020s. By doubling down on SUVs and trucks, the company stands to win big, unless a spike in gas prices changes the landscape. FCA isn't talking about a Plan B, so they're all in. It'll be interesting to see how this plays out.

Fiat 500L gets a much needed update for 2018

The Fiat 500L is one of those love-it or hate-it vehicles. Fiat's largest US vehicle has been knocked for questionable styling, poor build quality, and reliability concerns. That's why the new mid-cycle refresh is so important, as the Fiat says 40-percent of the components on the 500L are all new. Styling is much more aggressive, and a new trim level promises some semblance of off-road readiness. The 500L still keeps the general not-quite-a crossover shape, but the front and rear fascias have been redone. The front is more upright, losing that slack-jawed look of the current model. The lower air intake and foglight surrounds are big and wide, with contrasting chrome and black plastic. The lighting is similar to the current model but has been updated with LED accents. Of course, the requisite Fiat badge and mustache are in place. It's a similar story out back. The 500L retains the same general shape, but it's a little more masculine and angular. There are new chrome accents on the bottom of the bumper along with new reverse and rear foglights (for Europe). There are 10 colors available for the 500L, with three options for the roof: body color, gloss black or white, or matte black. All in, Fiat says there are 37 color combinations. Like the exterior, changes to the interior are more refreshed than all-new. Up front, the biggest changes are to the steering wheel, instrument cluster and infotainment system. A speedometer and tachometer flank a 3.5-inch color display. Like the Fiat 500X, the 500L will have a multitude of menus and options to flip through. The infotainment has been updated with the latest version of FCA's excellent UConnect system. That means standard Apple CarPlay and Android Auto. For Europe, there are three basic configurations: the five-passenger Cross, and optional seven-passenger Wagon, and Urban. There are various trim levels within each configuration, though the long-wheelbase seven-passenger versions are unlikely to make it to the US market. The big news is the Cross, which gets a 25mm lift, skid plates, unique front and rear bumpers, and new wheels and tires. While there are new drive modes, Fiat doesn't make any mention of all-wheel drive. Customers with the need can step up to the smaller but more traditional 500X. The 500L has been a slow seller here in the US. It's unclear when the new model will go on sale, but it's good to see Fiat breathing some life into a slim product line.

Major automakers post mixed US June sales figures

General Motors, Ford and Fiat Chrysler Automobiles NV posted declines in US new vehicle sales for June on Monday, while major Japanese automakers reported stronger figures. Once again, demand for pickup trucks and crossovers offset a decline in sedan sales. Automakers' shares rose as overall industry sales still came in above Wall Street expectations. The US auto industry is bracing for a downturn after hitting a record 17.55 million new vehicles sold in 2016. Analysts had predicted that overall, US vehicle sales would fall in June for the fourth consecutive month. As the market has shown signs of cooling, automakers have hiked discounts and loosened lending terms. Car shopping website Edmunds said on Monday the average length of a car loan reached an all-time high of 69.3 months in June. "It's financially risky, leaving borrowers exposed to being upside down on their vehicles for a large chunk of their loans," said Jessica Caldwell, Edmunds' executive director of industry analysis. GM said its sales fell about 5 percent versus June 2016, but that the industry would see stronger sales in the second half of 2017 versus the first half. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." GM shares were up 2.4 percent in morning trading, while Ford rose 3.3 percent and FCA shares jumped 6 percent. "US total sales are moderating due to an industry-wide pullback in daily rental sales, but key US economic fundamentals clearly remain positive," said GM chief economist Mustafa Mohatarem. "Under the current economic conditions, we anticipate US retail vehicle sales will remain strong for the foreseeable future." Ford said its sales for June were hit by lower fleet sales to rental agencies, businesses, and government entities, which fell 13.9 percent, while sales to consumers were flat. But it sold a record 406,464 SUVs in the first half of the year, with Explorer sales increasing 23 percent in June. And sales of the F-150 had their strongest June since 2001. On a media call, Ford executives said an initial read of automakers' sales figures indicated a seasonally adjusted annualized rate of around 17 million new vehicles for the month, which would be better than 16.6 million units analysts had predicted. FCA said June sales decreased 7 percent versus the same month a year earlier.