2014 Jeep Grand Cherokee Laredo on 2040-cars

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China-FCA merger could be a win-win for everyone but politicians

NEW YORK — Fiat Chrysler boss Sergio Marchionne has said the car industry needs to come together, cut costs and stop incinerating capital. So far, his words have mostly fallen on deaf ears among competitors in Europe and North America. But it appears Marchionne has finally found a receptive audience — in China. FCA shares soared Monday after trade publication Automotive News reported the $18 billion Italian-American conglomerate controlled by the Agnelli family rebuffed a takeover from an unidentified carmaker from the Chinese mainland. As ugly as the politics of such a combination may appear at first blush, a transaction could stack up industrially, and perhaps even financially. A Sino-U.S.-European merger would create the first truly global auto group. That could push consolidation to the next level elsewhere. Moreover, China is the world's top market for the SUVs that Jeep effectively invented, so it might benefit FCA financially. A combo would certainly help upgrade the domestic manufacturer; Chinese carmakers have gotten better at making cars, but struggle to build global brands, and they need to develop export markets. Though frivolous overseas shopping excursions by Chinese enterprises are being reined in by Beijing, acquisitions that support the modernization and transformation of strategic industries still receive support, and the government considers the automotive industry to be strategic. A purchase of FCA by Guangzhou Automobile, Great Wall or Dongfeng Motors would probably get the same stamp of approval ChemChina was given for its $43 billion takeover of Syngenta. What's standing in the way? Apart from price (Automotive News said FCA's board deemed the offer insufficient) there's the not-insignificant matter of politics. Even as FCA shares soared, President Donald Trump interrupted his vacation to instruct the U.S. Trade Representative to look into whether to investigate China's trade policies on intellectual property. Seeing storied Detroit brands like Jeep, Chrysler, Ram and Dodge handed off to a Chinese company would provoke howls among Trump's economic-nationalist supporters. It might not play well in Italy, either, to see Alfa Romeo and Maserati answering to Wuhan instead of Turin — though Automotive News said they might be spun off separately. Yet, as Morgan Stanley observes, "cars don't ship across oceans easily," and political considerations increasingly demand local manufacture of valuable products.

For his last act, Marchionne will outline an EV/hybrid roadmap this week

MILAN/LONDON — Fiat Chrysler (FCA) boss Sergio Marchionne is expected to outline new plans for electric and hybrid cars in a strategy presentation on Friday, aiming to ensure the world's seventh-largest carmaker remains in the race in the absence of a merger. The 65-year-old will present FCA's strategy to 2022, his final contribution to the company he turned around and multiplied in value through 14 years of canny dealmaking. After failing to secure a tie-up he said was necessary to manage the costs of producing cleaner vehicles, Marchionne needs to show the group can keep churning out profits on its own, even as emissions rules tighten, SUV competition intensifies and worries around his succession abound. Marchionne had long refused to jump on the electrification bandwagon, saying he would only do so if selling battery-powered cars could be done at a profit. He even urged customers not to buy FCA's Fiat 500e, its only battery-powered model, because he was losing money on each sold. But Tesla's success and the need to comply with tougher emissions rules have forced Marchionne to commit to what he calls "most painful" spending. "FCA is way behind rivals in terms of hybrid and electric vehicles and they need to hit the accelerator to convince investors they can close that gap," said Andrea Pastorelli, a fund manager at 8a+ Investimenti. Germany's Volkswagen, Daimler, BMW and U.S. rivals GM and Ford have committed to spending billions of euros each in coming years to try produce profitable cars powered by cleaner fuels. FCA needs to present a clear roadmap, just like Volvo Cars, which ditched diesel from its best-selling XC60 SUV, launched a new electric brand and pledged to shift all brands to hybrid by 2019, a banking source close to FCA said, noting: "The tech divide determines winners and losers in the industry." Marchionne has already said half of the wider FCA fleet will incorporate some elements of electrification by 2022, while luxury marque Maserati will spearhead FCA's electrification drive by making all new models due after 2019 electric. But its plans remain vaguer and less advanced than most big rivals and some investors wonder about the capital required to make vehicles compliant, and what share of spending can go to electrification given FCA's numerous demands.

2013 Jeep Wrangler Unlimited Rubicon 4X4

Ice skates are spectacular on frozen water, yet they are dreadful everyday footwear. I consider the Jeep Wrangler equally as specialized.
I recently spent a week with a 2013 Jeep Wrangler Unlimited Rubicon 4X4. Introduced for the 2007 model year, the Wrangler Unlimited is a standard JK two-door with 20.6 inches added to its wheelbase and two additional doors bolted to its passenger compartment. While Jeep offers the Unlimited in seven different trim levels, the desirable Rubicon is the most capable when the pavement ends, as it boasts a slew of hardcore off-road tools including front and rear electronic locking differentials and a front sway bar that can be disengaged at the touch of a button for improved articulation. My I-Look-Like-A-Traffic-Cone test model started with a base price of $34,095 (plus $995 destination). Options including a five-speed automatic transmission, Uconnect, tow package and a premium soft top, drove the bottom line up to $38,630.
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