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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.

Feds chastise Marchionne over Jeep recall, only 13% repaired so far

Following the significant outcry surrounding the General Motors and Takata airbag safety crises this year, the National Highway Traffic Safety Administration seems to be taking a much more aggressive role in pushing owners to repair their recalled vehicles. In the agency's latest move, it's urging Jeep drivers to get their models fixed. Acting NHTSA administrator David Friedman even sent a letter to Fiat Chrysler Automobiles CEO Sergio Marchionne pressing him to get more of the SUVs fixed. The problem goes back to the recall of the 2002-2007 Liberty and 1993-1998 Grand Cherokee because of the possibility for the fuel tank to rupture in some rear crashes. The campaign affected over 1.5 million vehicles, but Chrysler initially refused NHTSA's request for a repair campaign. The automaker eventually came up with a fix that involved adding a trailer hitch to provide extra protection to the tank. The feds believe the danger "will be reduced by the remedy now offered by Chrysler," according to the statement. However, this latest push comes out of NHTSA's concern that only three percent of the affected vehicles are repaired, although Chrysler maintains some 13.4 percent have actually been fixed. The agency is asking the automaker to reach out to owners "proactively," and get them to bring the Jeeps in dealers. According to the the feds' statement, the company "has nearly 400,000 parts available" to perform the fixes, and it's still producing more. Friedman's letter to Marchionne goes even further, alleging NHTSA has received reports that dealers are turning customers away who request the recall. He asks the CEO to prove within 15 days that these claims are false. "Given the low rates of repair that Chrysler has reported more than a year after the recall, significantly more aggressive steps are required," says a portion of the note. According to The Detroit News, Chrysler has subsequently promised to speed up the recall work, vowing that all dealers will have at least 12 repair kits in stock by Monday. Further, it has announced plans to ramp up its notification campaign with Facebook ads and public service announcements. Scroll down to read NHTSA's full statement on the matter, and Friedman's letter to Marchionne can be read in PDF format, here.

Hendrick wants to put Jeep Wranglers back on the battlefield

The Jeep Wrangler could be headed back to the battlefield. According to reports, negotiations are currently under way with the US Army to adapt the iconical American off-roader for military use. The Wranglers would serve as inexpensive, lightweight, unarmored vehicles that could be more easily airlifted into remote locations than costlier, heavier, and bulkier options. The proposal is not being fielded by the Jeep brand itself or its parent company Fiat Chrysler Automobiles, but by Hendrick Dynamics. The Charlotte-based offshoot of NASCAR racing team Hendrick Motorsports calls its modified Wrangler the Hendrick Commando. Instead of the 3.6-liter Pentastar V6 found in most US-market Wranglers, the Commando version employs the 2.8-liter diesel four built by VM Motori, modified to run on any type of diesel fuel or on JP-8 jet fuel to maximize its deployment versatility and comply with the Army's Single Fuel mandate of 2012. It would also support a variety of modular attachments for specific jobs, ranging from machine gun mounts and counter-mine rakes to radar arrays and advanced communications equipment. Hendrick says the Commando could also be deployed by helicopter or in cargo planes. And because it's based on a civilian platform, the Commando would also benefit from the latest advancements introduced by its manufacturer, the parts and service network already in place, and the thorough testing that's already gone into developing the Wrangler for civilian use. Hendrick has reportedly built 14 prototypes to date, including the two-door Commando 2 (based on the standard Wrangler), the four-door Commando 4 (based on the Wrangler Unlimited), and even a pickup conversion called the Commando S. It is not, however, the only company adapting Jeep Wranglers for military application. Israel-based Automotive Industries Ltd has been producing successive versions of the Wrangler-based Storm for use by the Israel Defense Forces and other militaries overseas since 1990. If the US Army awards the contract for the Commercial Off-the-Shelf (COTS) vehicle to Hendrick Dynamics, it would bring the iconic Jeep back to the battlefield where it got its start. The brand and its most prolific model trace their roots back to the Willys MB, launched in 1941 on contract from the US Army for deployment in World War II.