Photo: FCA

Ford announced last month that it’s phasing out small cars and now, probably not surprisingly it looks like Fiat Chrysler will take a similar path. Soon-to-retire CEO Sergio Marchionne apparently will cut down on the small cars and go in big on the large and luxurious ones. That means less Fiat and less Chrysler.

The report, which comes from Bloomberg and cites unnamed sources, indicates that Marchionne’s potential last move as boss will be to bet the automaker’s future on Jeep SUVs and Maserati luxury cars while “downsizing its namesake brands.” The official plan will be revealed on Friday.

From the story:

Expansion will be underpinned by rolling out brawny Jeep and Ram vehicles globally. The carmaker is also considering combining Alfa Romeo and Maserati into a single division in Fiat’s financial reports, the people said. Combining the upscale Italian brands would be seen by investors as a first step to an eventual spinoff.

As a consequence, the Fiat brand is set to be reduced to the 500 and Panda families, with sales limited to Europe, Brazil and some emerging markets. That could mean a withdrawal from the U.S., where it sought to make inroads on the heels of the Chrysler merger. The timing of that process may be complicated by dealer contracts. In China, local Fiat models failed to gain traction and are set to be halted, the people said.

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Expanding Jeep would certainly make sense, as it is the strongest seller and most valuable brand that FCA currently has to offer.

There was chatter back in August regarding FCA thinking about selling Jeep off to a Chinese automaker, which would have been very dumb. Jeep is the cash cow; selling it would be financial suicide. Investing in it and growing it seems like the most profitable path. (It would be a shame if Fiat withdrew from the U.S., though, especially after it just came back here in 2011 after a 27-year absence. Plus, we’d miss the 500 Abarth.)

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And anyway, haven’t you heard? Small cars are dying because nobody buys them. FCA already killed off the Dodge Dart and the Chrysler 200. This move would just be a continuation of a path it’s already going down.