Fiat and Chrysler CEO Sergio Marchionne, left, and Jeep brand CEO Mike Manley show off a Grand Cherokee in northern Italy ahead of a European launch.
ASSOCIATED PRESS Enlarge
BALOCCO, Italy -- A new rollout of Jeep models for Europe shows the deepening integration between Fiat SpA and Chrysler Group LLC, Chief Executive Sergio Marchionne said Tuesday, the same day the Italian automaker revealed it had increased its ownership of the once-bankrupt U.S. company to 30 percent.
Mr. Marchionne, who heads both companies, said that because Jeep is one of Chrysler's most marketable products outside the United States, it will be key to helping it return to health.
"This is the only true international brand that Chrysler has," he said at Fiat's test track near its Turin headquarters, where three Jeep models were presented to the media in Chrysler's first European event.
Mr. Marchionne has been working to integrate the companies since June, 2009, when Fiat was awarded an initial 20 percent stake in the automaker in exchange for small car technology, cleaner burning engines, and management know-how.
Fiat's attempts to revive Chrysler have so far been helped by a demand rebound after the financial crisis, though the company admitted the earthquake in Japan is expected to lift prices on some models because of delays in component supplies.
Now, Mr. Marchionne hopes Jeep's European comeback can give a boost to Chrysler's recovery, even in the face of higher oil prices.
The Jeep Grand Cherokee can come with cleaner burning diesel engines, Fiat's 3.0 liter Multi-jet 2, reducing consumption by a full 20 percent. Jeep achieved similar results with the Wrangler with the addition of the start/stop technology, which turns off the vehicle automatically at an idle stop and allows easy reignition.
The new Compass, restyled to better reflect Jeep's sturdy image, completes the European lineup.
Mr. Marchionne said reducing consumption in the Jeep brand vehicles is an acknowledgment that European drivers seek fuel economy as much, if not more, than Jeep's off-road capabilities.
Jeep, which was born in 1941 and earned its rugged reputation in the heat of World War II, aims to multiply its European sales to 125,000 a year by 2014, from a meager 15,000 in 2010, brand manager Mike Manley said. Wranglers and the Jeep Liberty are all built in Toledo.
Separately, Fiat's share of Chrysler rose to 25 percent in January when it met the first U.S. government benchmark by making a fuel-efficient, four-cylinder engine at a factory in Dundee. The extra 5 percent stake it received this week was contingent on a rise in Chrysler's sales outside North America, compensation to Chrysler for Fiat's use of its technology, and recruitment of dealers in Europe and Brazil to sell Chrysler models.
Mr. Marchionne hopes to increase Fiat's stake to 35 percent by the end of the year with the introduction of a 40 mpg car. Then Fiat would be clear to purchase an additional 16 percent, raising its stake to 51 percent.
Mr. Marchionne has said that Fiat wants to refinance its government loans before returning Chrysler to the public stock market.
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