Wednesday July 31, 2013

The launch of Chrysler Group LLC’s new 2014 Jeep Cherokee is being delayed by a month to September to resolve calibration issues with the vehicle’s new nine-speed transmission.

Cherokee production started on June 24, a month later than planned, at Chrysler’s assembly facility in Toledo, Ohio. The automaker had planned to begin selling the 2014 Cherokee in August.

Chrysler on Tuesday confirmed it was pushing back the Cherokee launch after postponing a media test drive that was planned for next week. The Cherokee will be the first vehicle to use the nine-speed automatic transmission, which Chrysler developed with German supplier ZF Friedrichshafen AG.

The Cherokee is also the first Jeep vehicle to be built on a Fiat SpA platform. Chrysler is an affiliate of Fiat. Fiat-Chrysler CEO Sergio Machionne downplayed the delay and said Tuesday the company will work over the next several weeks to ensure that it’s corrected.

"These things go on all the time in any product launches and they go on with a certain degree of frequency," he said on a conference call with investors and media announcing Chrysler’s second-quarter results.

"We keep on tweaking and finalizing the car." The company said the issue revolved around the calibration of the new transmission. The success of the Cherokee, which replaces the Liberty in Jeep’s lineup, is seen as critical to Chrysler’s success. Chrysler stopped production of the Liberty last August, and Marchionne said Chrysler was "paying a huge price" for not having a compact SUV on the market.

A smooth introduction of the Cherokee, Marchionne added, is "an absolute necessary condition" for Chrysler to meet its financial targets in the second half.

Chrysler on Tuesday lowered its 2013 profit forecast to a range between $1.7 billion and $2.2 billion from $2.2 billion.

Chrysler has invested $550 million in its Toledo plant to produce the new Cherokee.

The automaker is in the process of ramping up production of the Cherokee. It’s adding a second shift of workers, and at full capacity the plant will be able to produce 500 vehicles per nine-hour shift, or about 240,000 Jeeps a year.