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By Bernie Woodall and Agnieszka Flak
DETROIT/MILAN, Jan 27 (Reuters) - Fiat Chrysler Automobiles plans to stop building its own small and medium-sized cars in the United States, and turn more capital and capacity toward trucks and sport utility vehicles, the automaker’s chief executive said.
CEO Sergio Marchionne said during a conference call Wednesday he is looking for partners to build future versions of the compact Dodge Dart and the midsize Chrysler 200 as part of a new strategic plan for the company that runs through 2018. The two plants that currently build the Dart and 200 will be retooled for more profitable SUV and truck models, Marchionne indicated.
“We need to re-utilize ... plant infrastructure to try and deal with the development of both Jeep and the Ram brands,” Marchionne said. Marchionne forecast global Jeep brand sales of 2 million vehicles a year by 2018, up from 1.24 million in 2015.
Marchionne did not identify any potential partners to perpetuate the Dart and the 200, which compete in segments where Japanese automakers have the wind at their backs thanks to the cheaper yen. Cheap gasoline is driving a shift away from smaller cars toward SUVs across the U.S. auto market.
Dart production at the company’s Belvidere, Illinois plant made up 30 percent of the factory’s output a year ago, but that has been cut to 15 percent currently, sources said. The plant also makes the crossovers Jeep Patriot and Jeep Compass.
Fiat was able to take over Chrysler in large part on the promise of its small-car capabilities in 2009, a year after record high gasoline prices changed the U.S. market toward more fuel-efficient vehicles, a course that has since been reversed.
The midsize Chrysler 200, which competes with high volume Japanese cars such as the Toyota Camry and Honda Accord, is also a slow seller. Chrysler 200 inventories ballooned to 148 days’ supply on Jan. 1, roughly twice the levels automakers normally target, according to the Automotive News data center.
Fiat Chrysler said on Wednesday it will shut its Sterling Heights, Michigan plant that makes Chrysler 200 for six weeks starting on Monday, because of slack demand.
The company earlier on Wednesday released financial results for full-year 2015 and the fourth quarter, and raised financial targets for its five-year plan through 2018.
Additional reporting by Paul Lienert in Detroit; Editing by Grant McCool and Chizu Nomiyama