The market for large SUVs in the United States has been on the uptick for quite some time now and auto makers have been compromising some of their non-performing models to focus on large SUVs. This is exactly the case with Fiat Chrysler Automobiles NV.
The company announced on Tuesday that it has its eyes now fixed on the lucrative market for large SUVs and for that purpose it would need to bolster the brand through developing and manufacturing new models of Jeeps for an investment of $4.5 billion in five plants in the US. The market for large SUVs in the US is currently dominated by the US rivals of the company including General Motors Co and Ford Motor Co.
While making announcement for the investment, Fiat Chrysler said that 6500 new jobs would be created because of the investment in the give plants in the state of Michigan in the US. This announcement by Fiat Chrysler comes about three months after the announcement by GM that no new product would be allocated by it in five of its plants in North America which are mostly used to make the much low performing sedan models of the company. The likely decision of the company to close down the plants has been severely criticised and attacked by GM employees and political personalities including the U.S. President Donald Trump.
The strategic plan of FCA entails the transformation of a factory currently manufacturing engines into a car assembling pant. The company has also gone back on its decision to moving to Michigan its production of heavy-duty trucks from Mexico in 2020 which would give the company space and machinery to for development of a production line for its Jeep models
The mega plan by the company also entails making investments so that three of the plants in Michigan are able to manufacture hybrid as well as fully-electric Jeep models.
According to the company, work on the construction of the new Detroit factory of FCA would be initiated by the third quarter of 2019. The company also set a target of beginning of production of a new three-row SUV by the end of 2020. Following that, FCA would start production of a rehashed model of the Grand Cherokee in the first half of 2021.
The company also announced that in the first half of 2021, production of its Wagoneer model and the Grand Wagoneer which is a new three-row luxury SUV, would be initiated by the automaker. The company had announced last year that it would begin shifting its production of heavy-duty truck production to that plant but under the changed strategy, the company has now decided to retain the production of those vehicles in the company’s Saltillo, Mexico, plant.
(Adapted from Reuters.com)