MICHIGAN/MILAN (Bloomberg) – Chrysler Group LLC, the U.S. automaker operated by Fiat S.p.A., said its refreshed Jeep Compass SUV will play an important role in the automaker's expansion outside of North America.
The SUV, updated to resemble the larger and higher-priced Jeep Grand Cherokee, should appeal to non-U.S. drivers who prefer smaller vehicles, said Mike Manley, head of the Jeep brand and Chrysler's international organization. The new Compass will make its auto-show debut in Detroit on Jan. 10.
Chrysler has said it wants to more than double its sales in Europe and South America to almost 200,000 this year, in part by taking advantage of Fiat's distribution network. Jeep accounts for half of Chrysler's deliveries outside of North America and sold 13,050 Compasses in those markets last year, a 26 percent gain from 2009, said Todd Goyer, a Chrysler spokesman.
The Compass “will really fuel growth for us in the international markets, coming in underneath, hopefully, an equally strong reception for the Grand Cherokee,” Manley said in an interview late last year.
The Compass's interior space, smoother ride and competitive price may make it attractive to European drivers, said Rebecca Lindland, an analyst with IHS Automotive. The Compass starts at $19,295 in the U.S., compared with $30,215 for the Grand Cherokee, according to the company's website.
“It has a lot of space in it for a vehicle of that size, and on the European market that's a really important criteria,” Lindland said. “It could be very competitive in the European market.”
Rivals for the Compass in Europe include Toyota Motor Corp.'s RAV4, Ford Motor Co.'s Kuga and Nissan Motor Co.'s Qashqai.
Chrysler emerged from bankruptcy in 2009 with Fiat owning 20 percent of the company. The automaker now aims to hold an initial public offering in the second half of the year. Chrysler's global sales last year rose 15 percent to 1.5 million, including 1.09 million in the U.S., Ralph Kisiel, a company spokesman, said in an e-mail.
CEO Sergio Marchionne's five-year turnaround plan calls for Chrysler's global sales to rise to 2.8 million in 2014. The Jeep Grand Cherokee played an important role in improving Chrysler's business in the U.S. last year, with sales increasing 68 percent from 2009.
“The potentiality of the Jeep brand is recognized worldwide -- it's appealing also to European customers,” said Edoardo Liuni, an analyst at IlNuovoMercato.it in Rome. Fiat plans to build cars and SUVs for the Jeep and Alfa Romeo brands in a joint venture with Chrysler at its Mirafiori plant in Turin, Marchionne said in November.
The carmaker plans to use Chrysler's vehicle platforms and make as many as 280,000 autos a year at the plant. New Jeep and Alfa models will be ready by the fourth quarter of 2012.
Manley said Jeep's ambitions extend beyond Western Europe, with the rough roads and extreme temperatures in Russia and China also providing opportunities for the brand.
“If you look at the profiles of the markets, each of those markets suits the Jeep brand very well,” he added.