Chrysler will start production of its new Jeep Cherokee, the automaker's
most important new vehicle this year, in late June or about a month later than
The Cherokee is Jeep's entry in the growing midsize SUV segment.
Chrysler CEO Sergio Marchionne said in February that the automaker planned to launch the Cherokee by May 24. But last month, he told analysts the Cherokee would be launched in June, specifically the week of June 24, according to a person familiar with Chrysler's plan.
The reason for the delay is not clear. The Cherokee will be assembled at Chrysler's Toledo North assembly plant, and replaces the Jeep Liberty.
"Chrysler has got a number of objectives, which it needs to execute flawlessly between now and December of this year," Marchionne said. "The launch of the Cherokee, which will roll into framing sometime in the middle of June, is crucial to the success of that plan. We need to get everything right between now and then."
Chrysler spokeswoman Jodi Tinson declined to say when Cherokee production will start.
"The plant is building pilots," Tinson said, referring to vehicles used as practice builds, but not sold. "When the management team says the vehicles are ready to launch, then the plant will launch."
Chrysler's first-quarter profit declined 65% during from a year earlier to $166 million partly because it was launching the larger 2014 Jeep Grand Cherokee SUV and redesigned versions of its Ram heavy-duty pickups. Chrysler expects to make and sell more of those vehicles, as well as the Cherokee to boost revenue and profits in the second half of this year.
Launching the Cherokee will be more complex than most new vehicles because it is designed on an underbody adapted from Fiat, Chrysler's majority owner. The Cherokee also is the first Chrysler vehicle to feature a nine-speed transmission developed with ZF Group.
"It's a complicated industrial launch for us," Marchionne said last month.
Chrysler's Toledo North plant eventually will be able to make 275,000 Cherokees annually -- a big increase from the 75,000 Libertys sold in the U.S. last year.
Jim Hall, managing director of 2953 Analytics in Birmingham, said Chrysler intends to export substantially more of the Cherokee than it did of the Liberty.
"That could be making it even more complicated," Hall said. Vehicles built for export need extra preparation so they comply with safety and environmental regulations in the country where they will be sold.
"They may also just want to nail the quality. I think that they are building slow deliberately," Hall said.
Jeep has revived the Cherokee name because the traditional boxy vehicle sold between 1974 and 2001 was very popular. Sales totaled more than 2.5 million vehicles in that period, peaking at slightly more than 200,000 in 1999.
Chrysler's Tinson said dealers should have a full inventory of Cherokees in the third quarter.
Dan Henneman, chairman of the Jeep unit of UAW Local 12 in Toledo, said about 75% of the plant's first shift is working full-time assembling pre-production Cherokees.
Henneman said workers at the plant will work through the traditional July summer shutdown.
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