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Jeep and Ram could be spun off from FCA, says Marchionne

Jeep is surely the biggest single feather left in the cap of the Fiat Chrysler Automobiles portfolio. Under Sergio Marchionne's leadership, Jeep went from fewer than 500,000 annual sales in 2008 to 1.4 million in 2016, and is on track for 2 million by 2018. Add in the brand's legacy, status as one of the most recognizable nameplates in the world, and rabid fan base, and Jeep has extraordinary monetary value to its parent company. Investors and analysts have certainly noticed Jeep's inherent value. According to The Detroit Free Press, Morgan Stanley's Adam Jonas asked FCA chief Sergio Marchionne if he would ever consider spinning Jeep and Ram, FCA's dedicated truck brand, into a separate corporate entity, and he responded with a simple "Yes." Jonas estimated Jeep's worth in January of this year at $22 billion. Ram was valued at $11.2 billion. Marchionne has a history of spinning off brands while keeping them part of FCA's corporate umbrella. The most noteworthy example of this value maximization was with Ferrari, which now trades on the New York Stock Exchange and rakes in $3.4 billion in annual revenue and close to $435 million in net income, reports the Free Press. Marchionne still serves as chairman and CEO of Ferrari, and Fiat heir John Elkann owns 22 percent of the Italian marque's shares. Even if the offloading of Jeep and Ram into a separate entity would amount to little more than a profit-driven ownership change on paper, it would be huge news to the brands' loyal fanbases. In any case, such a move would likely take years to actually happen and probably wouldn't mean much at all to the products that Jeep and Ram produce. In other words, Jeep fans can keep the pitchforks in the shed ... for now. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.

Is a Jeep Renegade Hybrid coming soon?

We've known that Jeep is working on an updated Renegade. We've seen prototypes with updated front and rear fascias and with updated interiors. But it seems that the next Renegade will have more than just cosmetic updates. One of our spy photographers caught Jeep testing a Renegade Trailhawk that looks like a normal current one, but it has an electric shock warning sign in the window. Can we therefore assume it'll be a Jeep Renegade Hybrid? This sign seems to indicate that the Renegade will offer some sort of electrified powertrain. And its use on a lifted, off-road oriented Renegade Trailhawk seems to indicate that it'll be available throughout the trim level lineup. The question is, will it really be a hybrid or something like the Wrangler four-cylinder that features a 48-volt electrical system and a starter/generator for mild electrical assistance? This system is becoming more and more common as a way for car companies to eke out a few more mpg as well as adding some performance gains. Then again, we never saw this sign in any prototype Wranglers, so it could be possible this Renegade is using a more traditional hybrid system like you would find in a Prius or Ioniq. FCA certainly has experience with full hybrids, as evidenced by the Pacifica PHEV. The Wrangler will be getting a PHEV iteration, too. We probably don't have long to find out what sort of electrification the Renegade will receive. The visually updated prototypes we've seen aren't radically changed, so it likely won't take long to finish testing and release them. We're expecting to see the little SUV revealed by the end of the year, and probably on lots early in 2019. Related Video: This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings. Featured Gallery Jeep Renegade hybrid spy shots Image Credit: KGP Photography Green Spy Photos Jeep Crossover SUV Economy Cars Hybrid Off-Road Vehicles jeep renegade

Fiat Chrysler dumped 40,000 unordered vehicles on dealers

In a move that echoes recent history, Fiat Chrysler has been making more cars and trucks than dealers in the U.S. are willing to accept, with Bloomberg reporting that at one point the automaker had built up a glut of around 40,000 unordered vehicles. That’s led some dealers to accuse FCA of reviving the dreaded “sales bank” accounting practice of obscuring inventory to improve the balance sheet. The company reportedly began building up its inventory of unordered cars this summer despite an industrywide slowdown in sales and an eagerness by some dealers to thin their inventories because rising interest rates are making it more expensive to hold unsold cars. The inventory build-up also coincided with Fiat ChryslerÂ’s efforts to find a merger partner, first with Renault, which fell through, then last monthÂ’s announcement that it will merge with FranceÂ’s PSA Group. FCA denies any such scheme and tells Bloomberg the rising inventory is down to a new predictive analytics system designed to better square supply with demand from dealers that is helping the company save money and narrow the numbers of unsold vehicles. The company recently agreed to pay a $40 million civil penalty to the U.S. Securities and Exchange Commission to settle a complaint that it paid dealers to report fake sales figures over a span of five years. While no one is suggesting that FCA is in dire financial straits — the company saw higher than expected earnings in the third quarter and record profits in North America — the practice has strong historical precedent by Chrysler, which built up bloated inventories in the run-up to its two federal bailouts, in 1980 and 2009. It was also common at GM and Ford during the 2000s, when all three Detroit automakers struggled with excess manufacturing capacity and plummeting sales in the lead-up to the Great Recession. Back in 2012, CFO Magazine wrote about a report that explained automakersÂ’ rationale for the practice and how it works: Say fixed costs for a given factory are $100, and that the factory can make 50 cars. Consumers, however, demand only 10. Under absorption costing, if the company makes all 50 cars, its cost-per-car is $2. If it makes only up to demand, or 10 cars, the cost-per-car is $10. Although each car adds variable costs for steel and other parts, if those costs are low, the company still has an incentive to make more cars to keep the cost-per-car down.