The folllowing is an excerpt from Eric Sylvers | October 27, 2015 | WSJ.com |
Fiat Chrysler Automobiles NV’s successful initial public offering last week of Ferrari, its sports car maker, presents the Italian-American auto maker with a new challenge: turning its Jeep marque into the company’s next big global brand.
With the Ferrari business now trading on the New York Stock Exchange with a $10 billion market value, Fiat Chrysler Chief Executive Sergio Marchionne can redouble his efforts to turn Jeep into a global franchise that he predicted last year will sell 1.9 million vehicles in 2018.
But analysts say it is a risky strategy. Unlike Ferrari, a luxury, niche brand little exposed to market fluctuations, Jeep’s current success rides in part on low gasoline prices in the U.S. Coming new models and new sales regions—his plan calls for more than half of Jeep’s volumes by 2018 to come from outside the U.S.—could dilute the brand and profit margins, analysts said.
Jeep, like Ferrari, enjoys a devoted following. Rob Mackechnie, president of the 200-member Melbourne Jeep Owners Club in Australia, says there is no equivalent to his Wrangler JK Unlimited for going into the wilderness.
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