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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.

FCA CEO says the Ram 1500 Classic will live on, might even get an update

Ram intends to keep selling the 1500 Classic pickup truck for an unknown amount of time. According to a report from Motor Trend, FCA CEO Mike Manley during the company’s second-quarter earnings call said there are no plans to discontinue the old truck. Not only this, but Manley also suggested that Ram could give the Classic an update. In case you werenÂ’t familiar with RamÂ’s strategy of selling the 1500 Classic alongside the regular 1500, weÂ’ll lay it out for you: Ram released a completely new 1500 for the 2019 model year. Instead of discontinuing the truck it was selling before the new model, Ram continues to produce it under the 2019 Ram 1500 Classic name. Despite it being a 2019 model year truck, the Classic is the last-generation Ram. This is done so that Ram can offer customers a full-size truck option than is cheaper than the fancy new truck is capable of dipping down to. The 2019 Ram 1500 Classic starts at $29,340, whereas the regular 1500 has a base price of $35,135. If that makes a difference for enough people, then it makes financial sense for the old truck to stick around. However, Ram appears to be considering giving the old truck some new tricks, according to Manley. If that idea comes to fruition, then the Classic will start to look like an even better value proposition than it is today. Ram would have to act quickly, though, as the old truck just accelerates its aging by the day as each new pickup hits the market. Sales of the Classic were certainly an important contributor in the battle with Chevy to takeover the number two spot in the pickup wars. An even more attractive offering for the same low price sounds like a short-term winner to us. If Ram does refresh the 1500 Classic for 2020, donÂ’t expect it to last much longer beyond that model year, though. ItÂ’s already on life support at this point, and the new 1500 feels years ahead of it in every way.

Submit your questions for Autoblog Podcast #321 LIVE!

We're set to record Autoblog Podcast #321 tonight, and you can drop us your questions and comments regarding the rest of the week's news via our Q&A module below. Subscribe to the Autoblog Podcast in iTunes if you haven't already done so, and if you want to take it all in live, tune in to our UStream (audio only) channel at 10:00 PM Eastern tonight.
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