Sticking with its bullish profit predictions for 2018, FCA announced today its fourth quarter earnings for 2017 in which net profits nearly doubled to almost a billion dollars.
With a new Ram 1500 waiting in the wings, the old Ram set to print money while selling alongside the new one, and a healthy Jeep brand serving a public thirsty for crossovers, FCAâ€™s cupboard seems particularly full right about now … so long as the company keeps its focus.
Thatâ€™s not the trademark TTAC snark, either. Take it from the man himself. On the earnings call, Marchionne Â â€” not known for mincing words â€” went on to warn that much of this yearâ€™s performance rests on properly rolling out the redesigned Ram 1500 and Jeep Wrangler. “I think the biggest risk,” he said, “…is that we screw up all those launches and we can’t deliver the volumes.â€�
While the company will likely be short of the seven million vehicles it projected in 2014 to sell in 2018, thereâ€™s a great chance its financial targets will be achievable thanks to the levels of profitability at Maserati, Jeep, and Ram.
Consider it: FCA will have two distinct Rams to sell, both of which are likely to infuse the automakerâ€™s books with scads of cash. Itâ€™s doubtful the new Ram will have any cash on its bulging hood during this calendar year, as new customers will rush to showrooms in an effort to sign their name to the note for what is the latest and greatest Ram pickup. I fully expected the 2019 Ram would debut on dealer lots as high-priced, high-margin Crew Cabs in Laramie and Rebel trims; comments from honcho Marchionne seem to confirm it.
Your author also believes that the current-bodystyle Ram will continue to make bank for the company, with its tooling and RD having been paid for by now. Loyal Ram customers who arenâ€™t cottoning to the 2019â€™s styling can surely be counted on to step up and buy a new truck before the mini-Kenworth look is gone for good. Fleet sales of workaday 2018-style Rams are also bound to be healthy.
Transaction prices for the Ram pickup, Grand Cherokee, and Wrangler have been marching steadily upward since 2014. With two of those names borne by new machines, thereâ€™s little reason to think that trend will stop in 2018. In fact, Marchionne opined that â€œThereâ€™s a very strong likelihood that we will outperform Ford in terms of operating earnings in 2018.â€�
Bold claims. But, after discarding the Chrysler 200 and Dodge Dart like a rolled up Forbes magazine, the company definitely has the capacity to sell more of these high-margin machines than ever before. The plants that used to make those two sedans have been retooled to make Jeeps and Ram, meaning the company should have plenty of inventory for buyers.
On that same call, Marchionne also said the automaker would show details of its five-year plan at a June 1stÂ event in Balocco, Italy. Marchionne plans to retire early next year after seeing the business plan through 2018 to completion but has said he will not name his successor until after the Balocco meeting. The black-sweatered mogul, who has run Fiat since 2004, has indicated his successor will likely come from the ranks of the automaker’s global executive council.
[Image: Fiat Chrysler Automobiles]