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Fiat Chrysler Automobiles is all set to prepare India for a huge global role with the launch of the Jeep Compass in the coming months. The SUV was showcased at the Ranjangaon plant near Pune on Wednesday. Production is scheduled to kick off in June.
India will be one of the four global manufacturing hubs for the Compass and will join Brazil, China and Mexico in this endeavour. Vehicles manufactured at Ranjangaon will be exported to all right-hand-drive markets from the UK and Australia to Japan and key regions in the ASEAN region.
India will remain a priority market for the Compass given that it is in the midst of a big SUV growth wave and the FCA will be keen on leveraging this with its new offering. The key will be its pricing but indications are that the company will pull out all stops to ensure that the Compass offers a value-for-money proposition.
The project was conceived nearly four years ago with an eye on expanding the Jeep brand to a host of rapidly developing emerging markets. The fact that India was chosen in a select club of just three other locations is an acknowledgement of the engineering and manufacturing skills available here.
The Compass produced in Brazil will be shipped to other parts of South America as part of the growth plan. Brazil, on its own, is a sizable market but is going through hard times and it just makes sense to have a larger spread in the beleaguered Latin American region.
As for Mexico, the plan is to cater to North America and Europe apart from the domestic market. Production of the left-hand-drive Compass will, in fact, kick off from the Mexico facility next week.
It remains to be seen if US President, Donald Trump, will carry through his promise of withdrawing from the North American Free Trade Agreement. If this were to happen, it could result in tariffs being levied on car imports from Mexico into the US.
How this, in turn, will impact Compass shipments remains to be seen.
China is large enough to absorb the entire output of this SUV produced there which will do away with any need to have a larger global roadmap.
In India’s case, the FCA will be keen on building a strong presence with this Jeep brand to make up for its tepid showing in its Fiat avatar over the years.
The additional responsibility for India is to build a strong business plan for the FCA through the exports route beginning with the Compass.
Going forward, this role will only increase as the Ranjangaon facility becomes the most strategic manufacturing location in the Asia-Pacific region.
Jeep accounts for a third of FCA’s sales and this component could grow even more in the coming years.
Products like the Compass will play a big role in carrying this story to the next level given that they will be accessing an increasing number of new markets.
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