FCA’s growth in China and India is hampered by limited product portfolio and reliance on imports.
FCA’s Manley says automaker currently niche player in China.
AUBURN HILLS, MI –Automobiles’ Michael Manley, president and CEO of the Jeep brand and the Asia-Pacific region, says the automaker is a tiny player in China, but is acting to significantly accelerate growth in the world’s largest vehicle market.
Despite a slowdown in growth, Manley says the Chinese market is expected to grow about 7% annually through 2018. Year-over-year increases during this timeframe are expected to exceed 1 million units.
“We have to continue to grow the brand and our product portfolio,” he says today during a business-plan review here. The keys to growth “are the localization of our vehicle fleet and continuing to develop our dealer network.”
C-segment sedans remain the largest segment in China, but the fastest-growing category is utility vehicles, an area of strength for FCA and its Jeep brand.
The automaker sells the Jeep Compass, Patriot, Wrangler and Grand Cherokee and Cherokee in China, but plans call for the discontinuation of the Compass and Patriot in 2015 and the addition of the Renegade small SUV in 2016.
Other FCA products to be introduced to the China market include the500X CUV in 2015 and a new D-segment sedan in 2016.
While FCA sales have been growing in China, the automaker’s reliance on imported vehicles has hurt its profitability.
FCA today has one assembly plant as well as an engine facility and transmission plant in China. By 2018, the automaker plans to expand its manufacturing footprint with two assembly plants, an engine facility and a transmission plant.
Vehicle production capacity will increase to 775,000 units, up from 195,000 today, and engine output will grow from 140,000 units annually to 820,000 by 2018. During that period the automaker’s workforce is projected to grow to 13,000 employees, up from 3,600 today.
The increase in localized production is expected to significantly enhance FCA’s sales and profitability in China, Manley says, noting volume growth is expected to grow 38% by 2018.
India, another key market for FCA in the APAC region, is projected to be the third-largest market in the world by 2018.
Utility vehicles are the fastest-growing segment in the Indian market, and B-segment hatchbacks are the largest segment, Manley says.
FCA sales in India have been on a steady downslide since 2009, but Manley says much of the decline is due to having its distribution network run by Indian conglomerate. That recently changed, with FCA taking control of the network last year.
“Fiat took it back and completely restructured the sales team and networks,” he says. “Since we did, volume increased by 41% and continues to grow.”
To further fuel growth, Fiat plans to add by 2018 three new Fiat models, an Abarth performance vehicle and three new Jeep SUVs.