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FCA Willing To Build Model 3 Fighter If Business Case Makes Sense

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On: Thu, Apr 21, 2016 at 10:27AM | By: Carl Malek

FCA Willing To Build Model 3 Fighter If Business Case Makes Sense

Tesla just recently unveiled its long awaited Model 3 sedan and, with the car expected to take on rivals such as the Bolt EV, it is only a matter of time before other automakers put the futuristic four door in their cross hairs. Case in point is FCA; the has company stated that it is willing to build a Model 3 fighter of its own, but only if it makes sense on a business level, according to recent statements by FCA CEO Sergio Marchionne.

Marchionne revealed this stunning piece of information in a recent meeting with FCA officials in Amsterdam. He elaborated further on the issue to Automotive News when he was asked about the Model 3 and the record number of reservations it has received—which currently stands at over 400,000. "I'm not surprised by the high number of reservations but you have to then build and deliver them and also be profitable." Marchionne added that he does not personally see a way to make the Model 3 profitable especially at its $35,000 base price; he even offered an interesting challenge to Tesla CEO Elon Musk stating that if he "can show me that the car will be profitable at that price, I will copy the formula, add the Italian design flair, and get it to the market within 12 months".

While it remains to be seen what Marchionne's idea of "Italian Flair" will be for the purported EV, expect it to feature much of the same styling cues that have already been seen on recent Fiat and Alfa Romeo models, with the goal of eliminating the function-oriented styling language that has come to permeate much of the electric vehicle segment. When pressed later on whether FCA was late to the race for pure electrification, Marchionne shrugged off such notions, and said that it is "better to be late than sorry". The company's sluggish pace in EVs has been long documented, and while the 500e is currently the sole EV in FCA's lineup, it is not available across the entire U.S.; prior to its arrival in the marketplace, Chrysler experimented with a small number of Lotus-based EV prototypes before it was forced to file for bankruptcy (scrapping the project in the process) and was subsequently acquired by Fiat.

In addition to sharing his commentary on EVs, Marchionne mentioned that the company has received interest from car makers that are willing to help it build mid-sized cars in the U.S,. and a final partner could be decided on by the end of the year. FCA's quest for a partner is mainly due to its decision to utilize more of its production capacity to build trucks and SUVs which have been more profitable than the current generation Chrysler 200 and the Dodge Dart. Both of these models have seen their respective sales slide, mainly due to the lower cost of gasoline, as well as styling and ergonomic flaws that have conspired to keep the duo from achieving a solid foothold in the U.S. car market.

"We have received a couple of overtures and we are analyzing them," Marchionne announced. "We are in no immediate rush. It may happen as early as this year to have it nailed down." This particular statement comes after FCA revealed that it was laying off about 1,300 workers, and was permanently removing one shift from its Sterling Heights, Michigan assembly plant (which makes the slow-selling Chrysler 200). Marchionne did not mention when production for both the Dart and the 200 would formally cease, but hinted that it would entirely depend on how long it takes for the company to bring new models to both Sterling Heights and the Dart's plant in Belvidere, Illinois.


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