Newly-merged firm Fiat Chrysler is putting its Jeep brand at the heart of a five-year plan to build a global carmaker capable of taking on industry leaders.
Unveiling its long-awaited business plan for 2014-18 at an investors' day in Michigan, USA, the firm said today it aimed to more than double sales of Jeeps to 1.9 million by 2018 from 732,000 last year, with plans to expand production outside the USA and launch new models such as a small sport utility vehicle (SUV).
Italy's Fiat took full control of Chrysler earlier this year to create the world's seventh-biggest carmaker, hoping the profitable US business and economies of scale would help to revive its loss-making European operations and close the gap on bigger rivals such as Toyota and General Motors.
Fiat Chrysler boss Sergio Marchionne wants the company to follow competitors such as Volkswagen by building global brands and strengthening its position in the rapidly-expanding and high-margin market for premium cars.
He plans to revamp the luxury Maserati and upmarket Alfa Romeo marques, while building on the success of Chrysler's Jeep, and use all three brands to expand in Asia – the fastest-growing global car market, but currently a weak spot for Fiat Chrysler.
But analysts expect the revamp is likely to require capital spending of at least €8bn (£6.5bn) a year – a big burden for a group with €9.8bn euros of net debt.
This comes at a time when Europe's car industry is battling to recover from a six-year slump in sales, while demand in some of Fiat Chrysler's most important emerging markets, such as Brazil, is faltering.
Marchionne has also failed to deliver a string of ambitious targets in ten years at Fiat's helm, with its main European business losing market share amid delayed investments and some bad design choices.
Jeep, with ready products and a globally recognised brand in the fast-growing SUV market, is seen as Fiat Chrysler's biggest opportunity, especially in Asia. The brand traces its roots to the iconic World War Two Military vehicle.
Fiat Chrysler, which currently builds Jeeps at four US plants said it would increase the number of manufacturing operations to 10 plants in six countries over the five years, including already announced factories in Brazil and China.
"China and Brazil are forecast to represent 32 per cent of the global (SUV) market, and today we're a niche player because we are an import-only brand," said Jeep brand boss Mike Manley.
"Now, with the full merger of Fiat Chrysler and the investment that Fiat has already made, we are in a position to rapidly eradicate that," he said on plans to expand production outside the US.