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Fiat Group suffers from increased sales of SUVs

rebecca eisert | wirtschaftswoche | 19 august 2016

Read the article in German

PA automotive expert, Thomas Goettle, is quoted in an article in Wirtschaftswoche explaining why Fiat, due to their increased sales of their SUV brand Jeep, is struggling to meet the EU’s emissions limits within the next five years. 

Jeep’s sales have increased by more than 100 per cent – from 42,000 vehicles sold in Europe in 2014 to 89,000 in 2015. During the first half of 2016, Jeep’s sales rose by another 20 per cent compared to same point the previous year. Despite these positive sales figures, FiatChrysler is facing fundamental challenges – a lack of innovative technology and a lack of investment in the future portfolio. 

Thomas says: "FiatChrysler was hit by the changes in consumers’ behaviour – they’re now going for huge and more expensive cars. This is good for business but bad for their CO2 targets. FiatChrysler’s average CO2 emissions in Europe were on good track but now the outlook seems uncertain.”

Thomas expects the demand for heavier Jeep models will increase the total average of CO2 emissions within FiatChrysler’s fleet by several grams – significantly above the forecast: "The group is in danger of missing their CO2 targets within EU by 2021, leading to potential penalties.”

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Jeep models have higher CO2 emission themselves than Fiat’s smaller cars – but more importantly, each Jeep model and engine is facing between 15 and 30 per cent more CO2 emissions than comparable BMW SUVs. 

Thomas adds: "FiatChrysler is far behind the competition in this respect. Their engines lag behind by at least one decade when it comes to technology, but the group also does not have the money to close this gap. Developing a new engine requires €1-2 billion and takes five years. Sergio Marchionne, CEO of FiatChrysler Group, only has two options: to find a partner to develop engines with, or buy more advanced Diesel engines or hybrid systems."

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