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European woes dent Chrysler

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By Mark Phelan
Saturday, Feb. 9, 2013, 12:01 a.m.
 

Make no mistake about this: Chrysler would not exist today without Fiat. Chrysler owes its existence to the technology, talent, charisma and cash Fiat provided during the Great Recession.

But last week, Chrysler-Fiat CEO Sergio Marchionne had to admit the ambitious new-model plan he laid out in 2009 for Chrysler, Dodge, Jeep, Ram and SRT will suffer as Europe's debt crisis hammers Fiat.

“Suffer” is a relative term, of course. Neither Chrysler nor any of the vehicles it will introduce in the next five years would exist if not for Fiat, but Chrysler was going to get more cars, crossovers and trucks faster before the European debt crisis gutted Fiat's new-model plan.

This is a blow to Chrysler.

The automaker has already proven more resilient than I expected, but keeping aging models like the Chrysler 200 and Jeep Compass on the market will hurt.

The fast rollout of a brace of new vehicles might have reshaped the brands' images. Instead, Chrysler can hope for a brief buzz from introducing fewer new cars and trucks over a longer period than it wanted. Not the best way to build momentum and boost the profile of an automaker that's fallen off many buyers' shopping lists.

Unlike the ugly reign of DaimlerChrysler, this is not a case of foreign bosses who undervalue or actively undermine Chrysler. Fiat is committed to its American business. Chrysler has access to its best and brightest management and engineering, two considerable assets.

The problem is that Fiat is struggling desperately as European sales hit 30-year lows. The deterioration of Europe's market has been worse than even the smartest and best-informed foresaw. Marchionne scoffed last summer when I asked whether Fiat's problems could delay the new Chrysler vehicles.

That was then. This is now. Here are the ex-new Chryslers:

• A pair of small cars the Chrysler brand expected this year has been axed.

• Two small Dodges due this year have also been eliminated.

• The replacement for the Chrysler 200 sedan intended for 2013 has been shoved back to 2014.

• The small crossover Fiat was going to build for Jeep is delayed to 2014.

• A small commercial van for Ram promised for 2012 slips to 2014. Ram promises two more new models in 2016.

• The replacements expected for the Chrysler and Dodge minivans have been pushed back from an expected 2014 release to 2015. Another Dodge and two new Chryslers should debut in 2015 and ‘16.

• The Jeep Grand Wagoneer luxury SUV expected next year slips to 2015. Another new model, maybe the Patriot replacement, is due then, with two more in 2016.

In all, Chrysler Group promises 12 new vehicles in 2015 and ‘16.

So what can we expect from Chrysler Group this year?

The replacement for the Jeep Liberty — possibly in line to resurrect the hallowed Cherokee name — arrives this spring.

The Jeep Grand Cherokee gets welcome new features, including a powerful and fuel-efficient V6 diesel and an eight-speed automatic transmission.

Mark Phelan is the Detroit Free Press auto critic; mmphelan@freepress.com.

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