Fiat&#x27s &#x27Baby&#x27 Jeep Renegade Hails From Italy

The small Jeep Renegade is far more than a domesticated line extension of a car brand that created its status on off-road ruggedness. The modest sport-utility car, introduced on March 4 at the Geneva Worldwide Motor Demonstrate, is also a crucial check for the carmaker becoming formed from the merger of Fiat (F:IM) and Jeep mother or father Chrysler Group. The American brand’s new entry-level model will be produced in Italy and share underpinnings with the 500X, a 4-door crossover version of the trendy Fiat 500 city auto. “The Renegade and 500X are excellent examples of something Fiat and Chrysler couldn’t have accomplished alone,” says Roberto Verganti, a management professor at Polytechnic University of Milan. “They are exploiting Fiat knowledge in tiny vehicles to launch a Jeep model in a section that’s truly booming.”

Chief Executive Officer Sergio Marchionne completed a decade-prolonged search for a companion with the obtain in January of the 41 percent of Chrysler that Fiat did not personal. The marriage gave the 2 auto firms a chance to greater compete with bigger rivals this kind of as Common Motors (GM) and Volkswagen (VOW:GR). Marchionne’s challenge now is to show that his skills extend past dealmaking to making automobiles clients want.

The Renegade, which is about 7 inches shorter than the Jeep Patriot, will vie with Nissan Motor’s (7201:JP) Juke and Kia Motors’ (000270:KS) Soul for the developing ranks of urban buyers looking for tiny automobiles with outside flair. The SUV will draw on Jeep’s off-road tradition with optional 4-wheel drive and a boxy design that is a nod to Jeep’s Wrangler. The outdoor really feel comes from 2 removable roof panels that can be stored in the trunk. The small SUV marks Jeep’s initial new model line because the midsize Compass in 2007. It will probably be less costly than the $ 15,995 Patriot, Jeep’s current entry-degree model, to lure a broader selection of buyers—even if some purists balk at its diminutive dimension.

“You may well have a number of Jeep fanatics say it’s not a Jeep, but Jeep has been hearing that for many years with the Compass and Patriot,” says Jeff Schuster, an analyst at researcher LMC Automotive. “They need to bring fresh new consumers into the brand to hold the brand moving.”

The Renegade will be assembled in Melfi in southern Italy, generating it the only Jeep to be presently created outside North America. It will go on sale in Europe this summer season and be exported to the U.S. by yearend. The factory option is component of Marchionne’s method to fill underused plants in Fiat’s home nation with versions that can be exported throughout the world. The aim is to operate profitably in Europe, exactly where demand is at virtually a 2-decade lower and Fiat lost €520 million ($ 714 million) last year. The Italian carmaker’s market share in western Europe dropped to 6.2 % in 2013 from percent in 2007 due to the fact of a lack of new designs. “This car actually displays you a blend of resources and technological innovation,” says Mike Manley, head of the Jeep brand. Use of Fiat cars’ underpinnings “helps us to get to market quicker and cuts fees.”

Researcher IHS Automotive (IHS) forecasts that product sales of the infant Jeep will hit 121,000 cars in 2016, assisting Fiat Chrysler obtain a 20 % jump in income, to 5.2 million autos, that year. Renegade demand is probably to be evenly split amid the U.S., Europe, and Asia, says IHS. With the addition of the Fiat 500X, Fiat Chrysler will possibly deliver 204,000 small SUVs in 2016, beating Nissan’s 186,000 Jukes although trailing Ford Motor’s (F) EcoSport product sales of 288,000 cars, IHS predicts. Says IHS analyst Ian Fletcher: “It’s most likely the initial time in several years that the carmaker has managed to get the proper products in the market place at the correct second.”

Marchionne said on March 4 that Fiat also will develop the Renegade in Brazil beginning this 12 months and has strategies to commence China production in 2016. “The Renegade’s a auto you can promote anywhere,” says Jesse Toprak, chief analyst at internet site “That’s the beauty of the segment. There is universal demand for it.”

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