Why Fiat S.p.A. Needs the 2015 Jeep Renegade

The new 2015 Jeep Renegade will make its U.S. debut in New York this week. Photo credit: Fiat Chrysler

Jeep has never built anything like the new Renegade. 

The brand's first-ever subcompact will be one of the smallest SUVs sold in the U.S. when it debuts later this year. And it's going to be built far from traditional Jeep territory, in Italy.

All that may sound strange to American Jeep fans, but Fiat Chrysler  (NASDAQOTH: FIATY  ) has big plans for the new Renegade -- plans that stretch far beyond America's borders.

As Fool contributor John Rosevear explains in this video, the littlest Jeep will be a real Trail Rated Jeep -- but while it will be sold in the U.S., its real importance will be found overseas.

A transcript of the video is below.

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John Rosevear: Hey Fools, it's John Rosevear, senior auto analyst for Fool.com. The New York International Auto Show starts this week, media days are Wednesday and Thursday, and we're expecting the automakers to unveil several interesting new models.

I'll be there with my Foolish colleague Rex Moore, we'll bring you a video report of the show's highlights at the end of each day, and we'll have a bunch of more in-depth reports for you over the next week or so after that. One of the vehicles we'll be checking out closely is the all-new Jeep Renegade.

The Renegade is something new for Jeep, a subcompact SUV. It was originally unveiled at the Geneva auto show in Switzerland last month, but this will be its North American debut.

It's an interesting product for Jeep, and one of the things that's most interesting about it is that it's not really primarily intended for the U.S. market. It will be sold here, you will be able to buy one, but it's really going to be aimed at younger buyers in Europe and in developing markets, possibly China as well.

And it's not going to be made in the U.S., it's going to be made in Italy. Fiat and Chrysler are now one company, and CEO Sergio Marchionne is running them as one company with a global vision.

One part of that vision involves making Jeep a truly global brand, Jeep has offered a fairly wide range of models for years but most of its sales and profits and really most of its image come from the Wrangler and from the big Grand Cherokees.

Now in order to introduce Jeep to new audiences outside of the U.S., they've come up with this Renegade, which is going to go head to head with vehicles like the Opel Mokka, which is a European cousin of the Buick Encore, and with the Ford  (NYSE: F  ) EcoSport, which is another subcompact SUV, it's based on the Ford Fiesta's platform and it has been a big success for Ford in places like India, where small and rugged and cheap but still nice is a winning combination.

That's really where Jeep is aiming this Renegade, and they have what could turn out to be a trump card if they market it correctly, and that's that this little thing comes in a 4x4 Trail Rated version.

Chrysler says the Renegade Trailhawk, and I quote, "delivers best-in-class 4x4 Trail Rated capability with class-exclusive Jeep Active Drive Low, which includes 20:1 crawl ratio and Jeep Selec-Terrain system."

If they can deliver that for a price that is competitive with a Ford EcoSport, at least a loaded EcoSport, the Renegade could get quite a bit of attention and could do quite well.

But I don't know how it'll do here. Really in the U.S. its competition will be the Nissan  (NASDAQOTH: NSANY  ) Juke and the Kia  (NASDAQOTH: KIMTF  ) Soul, and neither of those are positioned as something with serious off-road capability.

If it's a success, it makes me wonder if Ford will try to bring the EcoSport to the U.S., they certainly could do it without a massive investment, it could be built right on the line in the Mexican factory that builds the U.S. market Fiestas.

But we'll see how it plays out.This new Jeep is an interesting product, and I'm looking forward to getting up close with it in New York later this week, Rex and I will bring you a close look at it with a video report from the show floor. Thanks for watching.


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Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On April 15, 2014, at 11:21 AM, LouisTewl wrote:

    J.R. is long FORD, which is why his articles about FCA are always slanted AGAINST FCA and TOWARDS FORD.

    From the title ( Why Fiat S.p.A. "Needs" the 2015 Jeep Renegade) through the entire article J.R. ONCE AGAIN never fails to "sneakily" (at least in his own mind) present Ford as the standard by which all car makers must be judged and, which is, "in fact," the better investment.

    Why? BECAUSE HE WANTS HIS STOCK TO GO UP. If JR ever used his position for something besides shamelessly writing advertorials on his (and TMF's) stock positions, he would probably DROP DEAD from the attack of honesty, which would be good, actually, not just for investors looking for TRUE market analysis, but also because it would save TMF the trouble of immediately firing him.

    The REAL fools are those who are fooled by John Roseveer.

  • Report this Comment On April 23, 2014, at 11:52 AM, TMFMarlowe wrote:

    @LouisTewl: I am indeed long Ford. But I'm not "against FCA", and I fail to see how talking down FCA would help Ford's stock in any way. Try again.

    John Rosevear

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