DETROIT –Group LLC’s road to China runs through Auto SpA’s partnership with Guangzhou Automobile Industry Group Co Ltd., Sergio Marchionne says.
Marchionne, CEO ofand , also says building exports is a key priority for Chrysler as the auto maker seeks to erase the stain of last year’s bankruptcy filing.
In board rooms around the world, various strategies are evolving as OEMs draw a bullseye on China’s rapidly developing new-vehicle market.
“Chrysler’s future in China without Fiat is going to be a lot more difficult,” Marchionne says, conceding the Italian auto maker’s track record for car sales has been “less than stellar.”
In contrast, Fiat has a healthy presence in China’s truck market.
Marchionne’s comments come in a candid, wide-ranging discussion with journalists today at the North American International Auto Show here.
“We finally have a viable joint venture now with Guangzhou Automotive, and our objective is to get Chrysler connected into the joint venture,” Marchionne adds.
Last July, Fiat entered into a 50-50 JV with Guangzhou to produce car engines in China. The previous month, Fiat acquired a 20% stake in Chrysler following the Detroit auto maker’s emergence from Chapter 11 protection.
In other overseas markets where Fiat is well-established, such as Europe and Latin America, the Italian auto maker’s retail network will accommodate Chrysler’s expansion.
Jeep, Marchionne adds, offers the most likely chance of initial success because it is “the most global” of Chrysler’s brands.
He also says Chrysler will record an operating profit this year if its global vehicle sales hit 1.65 million. He suggests 1.1 million of that total will come from the U.S.
Last year, Chrysler says it delivered 1.32 million vehicles worldwide – a 9.3% drop 2008’s 1.45 million. Sales in the U.S. totaled 931,402, marking the auto maker’s first sub-million year since 1962, according to Ward’s data.
In 2009, burdened by bankruptcy-induced shutdowns that crimped supply, Chrysler recorded 386,226 deliveries in Canada, Mexico and overseas markets, a 30.3% plunge from prior-year’s 553,959.
The auto maker’s Chapter 11 protection applied only to its U.S. operations.
Chrysler’s presence at the Detroit auto show is relatively subdued, with just one of its nine planned new-vehicle launches for 2010 on display, the ’10 Dodge Ram Heavy-Duty pickup.
With the notable exception of the scheduled spring launch of the redesigned-for-’11 Jeep Grand Cherokee midsize SUV, most of the auto maker’s product introductions will take place in the fall.
Until then, Marchionne says, he and his management team are prepared to accept criticism for the pace of change at Chrysler. “We are not crybabies,” he says. “We’ll take it on the chin. But there are limits.”
A measure of caution is required to ensure the auto maker achieves the goals set out in its 5-year plan for renewal, Marchionne adds.
The executive is keen to nurture talent and cultivate a new regime of optimism. When Fiat took the reins at Chrysler following successive ownership reigns by the former DaimlerChrysler AG and Cerberus Capital Management LP, employees were demoralized.
“In a lot of ways, they lost their pride,” Marhcionne says, “which, by the way, is probably the most damaging thing that you can do within an organization.”