[Martinjlm]

Originally Posted by Gunkk

Ouch. FCA boned itself.... again.

https://carbuzz.com/news/77-million-...lenger-hellcat

As an industry analyst, I can say that we have for quite some time wondered what FCA's strategy was. Many of us have come to the conclusion that the strategy was "full steam ahead....by the time the penalties become real either FCA will be 'parted out' or the regulations will be dialed back".

"Hemis, Hemis, everywhere" can ring the cash registers, but at some point the fines tip the scales. Tesla can only sell Zero Emissions Credits. These help with CAFE but cannot solve the problem. They are more useful for satisfying the Zero Emissions regulations in the states that follow CARB regulations. Eventually, the CAFE regulations will not allow for paying of fines. The result will be inability to sell vehicles that do not comply for companies that do not balance their portfolio to meet CAFE.

[rocket403]

Giving the people what they want has a cost and my respect

[RobbyBeefcake87]

Originally Posted by OLD_GOAT

Honest question, did GM finally fix the overheating problem that was a problem for some C7Z's? Did/does the ZL1 and C7Z still have this problem or was it corrected? My guess is that this problem was fixed on the C7Z and was OK when the ZL1 was introduced.

I know there is even a class action lawsuit against GM concerning the overheating problems on the C7Z.

That was corrected by 2017, and zl1s have great cooling, that was big positive about them. The early z06s that overheated were only the autos and typically only after extended track use.

[hotlap]

Originally Posted by Martinjlm

As an industry analyst, I can say that we have for quite some time wondered what FCA's strategy was. Many of us have come to the conclusion that the strategy was "full steam ahead....by the time the penalties become real either FCA will be 'parted out' or the regulations will be dialed back".

"Hemis, Hemis, everywhere" can ring the cash registers, but at some point the fines tip the scales. Tesla can only sell Zero Emissions Credits. These help with CAFE but cannot solve the problem. They are more useful for satisfying the Zero Emissions regulations in the states that follow CARB regulations. Eventually, the CAFE regulations will not allow for paying of fines. The result will be inability to sell vehicles that do not comply for companies that do not balance their portfolio to meet CAFE.

Very interesting post. Marchionne's five year plan didn't present a long term for Dodge or Chrysler. It does look like "full steam ahead" until they simply can't. Recent Dodge product looks like they are turning up the heat full without regard for the kettle boiling over.

[bobby35ny]

I've said the below many times on these forums.
Tons of profits on these and other cars.

FCA made almost 2 BILLION profit on 2016, what's a 77 million dollar fine??? NADA!!
They knew damn well they weren't going to make the EPA target numbers.
People think making cars works off retail profit margins of 20% on a car that costs $60k
The car cost 60-65k because PEOPLE will pay it. It doesn't mean the car cost 45k to build, FAR from it! The car business is a tough biz for sure but the profits are HUGE.

[rocket403]

It is all part of doing business in the ever changing North American market

"What FCA, and likely other automakers as well, is for regulators to freeze fuel economy requirements starting for the 2020 model year that will remain in place through 2026."

"What’s also interesting about FCA’s $77 million penalty is the amount itself. For example, the civil penalty in 2014 was just $2.3 million. In 2011 it was $40 million."

"another reason for FCA’s regulatory troubles stems from the fact that some "front-wheel-drive utility vehicles previously classified as trucks were moved to the car fleet, which have much tougher fuel-efficiency requirements.” In any case, unless the Trump administration makes the regulatory changes FCA and others want, expensive penalties could continue."

GM doesn't have the nerve to go balls to the wall they way FCA has and as bobby has said there must be huge profits on these cars, sure FCA would have liked to pay less but they are milking all they can out of this platform for as long as they can.

[DevilsReject97]

Originally Posted by rocket403

GM doesn't have the nerve to go balls to the wall they way FCA has and as bobby has said there must be huge profits on these cars, sure FCA would have liked to pay less but they are milking all they can out of this platform for as long as they can.

Well considering it's predominantly their only profits, it's not a surprise. Dodge has nothing but the Charger/Challenger that sells well at all. Ram trucks are solid, but they always were. Jeep is it's own thing and has been for years...

Chrysler has the Pacifica/Caravan which is okay..

And honestly, GM has a different approach than Chrysler. They're focusing on building 1/4 mile cars while GM has focused on building complete performance cars... We can all argue that perhaps GM should have thrown a bone to drag racers with an expensive option, but the truth is, we dont really need it..

[oldman]

I think a working auto with transbrake would be very helpful.

[ChefBorOzzy]

Manufacturing cars is not an overly profitable business. We're talking about 5-10 percent profit margins in the end.

[Martinjlm]

Originally Posted by bobby35ny

I've said the below many times on these forums.
Tons of profits on these and other cars.

FCA made almost 2 BILLION profit on 2016, what's a 77 million dollar fine??? NADA!!
They knew damn well they weren't going to make the EPA target numbers.
People think making cars works off retail profit margins of 20% on a car that costs $60k
The car cost 60-65k because PEOPLE will pay it. It doesn't mean the car cost 45k to build, FAR from it! The car business is a tough biz for sure but the profits are HUGE.

The fines are one thing. The problem comes when taking a fine is no longer an option. It will be “meet regulation or stop selling vehicles that don’t”.

The profit margin thing is sorta all over the place. I remember years at GM when I was in a position to see the profit margins on a vehicle line by vehicle line basis. This was not long before the bankruptcy. Trucks and Suburbans made double digit profit margins. Pretty much everything else was under water. I was in meetings on at least two or three occasions where Corvette was killed because there was not even a glimmer of hope for a positive business case. Now Corvette puts up some pretty healthy numbers.

Today, I’m not as close to seeing the financials of any vehicles, but I am more than certain that all the domestic automakers make double digits on trucks and utilities. Both in percent profit margin and in terms of thousands of dollars of profit per vehicle sold. Not too many years ago cars were teetering in the 2 - 6% profit margin range. I have more reason to believe that this has deteriorated than I have reason to believe it has improved. Part of the reason companies are dropping low margin cars with declining sales in favor of high margin crossovers that they have to run plants overtime to build. Tag on to that the inflation of truck prices and the fact that it hasn’t slowed sales one iota and it’s not hard to predict how domestic automakers will behave. More luxury crossovers (Lincoln Aviator, Cadillac XT4 and XT6, Jeep Grand Wagoneer) and pickup trucks that sticker over $70,000.

[rocket403]

Originally Posted by DevilsReject97

Dodge has nothing but the Charger/Challenger that sells well at all. Ram trucks are solid, but they always were. Jeep is it's own thing and has been for years...



We can all argue that perhaps GM should have thrown a bone to drag racers with an expensive option, but the truth is, we dont really need it..

I guess the 300000 Durango, Dodge caravans, and Journeys that Dodge has sold under their banner don’t apply? Dodge sold 452k vehicles last year, and at one time Ram was under the Dodge Banner as well.

GM should have done more than they did but corvette is not to be upstaged. One time it was upstaged by Buick but never again.

[bobby35ny]

Originally Posted by Martinjlm

The fines are one thing. The problem comes when taking a fine is no longer an option. It will be “meet regulation or stop selling vehicles that don’t”.

The profit margin thing is sorta all over the place. I remember years at GM when I was in a position to see the profit margins on a vehicle line by vehicle line basis. This was not long before the bankruptcy. Trucks and Suburbans made double digit profit margins. Pretty much everything else was under water. I was in meetings on at least two or three occasions where Corvette was killed because there was not even a glimmer of hope for a positive business case. Now Corvette puts up some pretty healthy numbers.

Today, I’m not as close to seeing the financials of any vehicles, but I am more than certain that all the domestic automakers make double digits on trucks and utilities. Both in percent profit margin and in terms of thousands of dollars of profit per vehicle sold. Not too many years ago cars were teetering in the 2 - 6% profit margin range. I have more reason to believe that this has deteriorated than I have reason to believe it has improved. Part of the reason companies are dropping low margin cars with declining sales in favor of high margin crossovers that they have to run plants overtime to build. Tag on to that the inflation of truck prices and the fact that it hasn’t slowed sales one iota and it’s not hard to predict how domestic automakers will behave. More luxury crossovers (Lincoln Aviator, Cadillac XT4 and XT6, Jeep Grand Wagoneer) and pickup trucks that sticker over $70,000.

I'm sure FCA was praying that more Fiats would sell to help the offset CAFE....

[Martinjlm]

Originally Posted by bobby35ny

I'm sure FCA was praying that more Fiats would sell to help the offset CAFE....

That was part of it, but not a big part. They never have had enough capacity to build enough 500s to offset Ram and Jeep fuel economy. Maybe Dodge. I think they originally had higher hopes for Dart and 200, but those cars were not competitive in their segments and were the heaviest, lowest fuel economy entrants in their respective market segments.

Add onto that Sergio’s continued statements that he didn’t want people to buy one more of their 500e than it took to get the ZEV credits. That just made it clear that electrification was NOT on their strategy page. At least not while Sergio was alive. Now that he isn’t, they are taking an aggressive run at 48V Mild Hybrids. I got to drive a Wrangler with 48V eTorque system for a couple days last week. Pretty decent system. I expect it will appear on a lot of FCA products over the next few years.

[newmoon]

Originally Posted by DevilsReject97

Well considering it's predominantly their only profits, it's not a surprise. Dodge has nothing but the Charger/Challenger that sells well at all. Ram trucks are solid, but they always were. Jeep is it's own thing and has been for years...

Chrysler has the Pacifica/Caravan which is okay..

And honestly, GM has a different approach than Chrysler. They're focusing on building 1/4 mile cars while GM has focused on building complete performance cars... We can all argue that perhaps GM should have thrown a bone to drag racers with an expensive option, but the truth is, we dont really need it..

Yes and that strategy of building a complete performance car is working out well for them, if it weren't for the interior and exterior design it might be no. 1 in sales instead of no. 3