Feature
Chrysler Does Some Pruning, But Where Are the New Seedlings?
Chrysler's announcement last week that it is trimming its product line came as no surprise. Nor will future announcements about more models going away.
The remaining question is, what seedlings is Chrysler planting for its future model line?
Going Away
Chrysler announced last week that it is dropping from its product portfolio four slow-selling models. Going away in 2008 will be the Dodge Magnum and the Chrysler Crossfire, Pacifica and PT Cruiser convertible. These are the obvious models to clear away from among the overlapping models in Chrysler's line.
The Dodge Magnum was a bold move for Chrysler — the revival of an American station wagon with a macho look. But after the first blush, the Magnum found limited appeal among the masses.
Chrysler missed the mark from Day One with the Pacifica. Among the first crossovers, the Pacifica came in overpriced, underpowered and cramped on interior space. Despite re-pricing and product changes, including a more powerful engine and a cheaper, five-passenger version, the Pacifica never recovered from its bad start.
The days have long been numbered for the retro-styled, now long-in-the-tooth PT Cruiser. While Chrysler only has announced the demise of the convertible version, the elimination of the standard-issue PT can't be far away.
The Crossfire, a head-turner on a solid Mercedes-Benz architecture, suffered an identity crisis. It wasn't really a sports car as it was pitched, so it failed to find much of an audience.
Additional Pruning
More pruning of the line is assured. Chrysler's dilemma has been that about 70 percent of its sales have been in trucks and SUVs, the highest percentage in the industry and way too high in this era of high gas prices. But last week's announcement of departing models won't rectify the issue, so there's more to be done to shift the balance.
In February, Chrysler announced the Delaware assembly plant that makes the Chrysler Aspen and Dodge Durango would close. This leaves in question the future of the Durango and Aspen, which are scheduled to receive a two-mode hybrid powertrain shared with General Motors and BMW models in early 2008.
The future of the Dakota pickup truck is questionable. Sales have been down double digits this year in a segment slumping due to high gas prices.
The remainder of the aged PT Cruiser line is likely to go before long.
Rumors ran rampant in Detroit after last week's announcement that the Chrysler Sebring's future could be short-lived. Chrysler announced that the plant which makes the Sebring along with the Dodge Avenger (both redesigned just this year) drops to a single shift, hardly a profitable level of capacity utilization.
The ridiculous Jeep Commander — a giant, squared-off sport-utility with a dangerous lack of rear visibility — is a likely candidate. The car-based Jeeps could be on the chopping block, too.
Making Brand Identity Clearer
At his first meeting with the media, Jim Press, Chrysler's vice chairman in charge of sales and marketing, said the automaker's three brands will become more focused and distinctive in the future, with fewer overlapping models.
"We need to use the portfolio to our advantage to preserve the clarity of our brands and not blur them," he said.
With Chrysler losing the Crossfire and Pacifica and potentially the PT Cruiser and Aspen, it's left with only the aging 300 and the new Town & Country minivan. One wonders what reason it has to exist — or what it will exist on.
Press insists — as have many of those before him with a conspicuous lack of success — the Chrysler brand can "go after an upscale luxury, higher-value-added and more sophisticated market."
Meanwhile, Press sees Dodge as "the volume leader with trucks and a full spectrum of vehicles."
Press suggested Jeep needed to get back to its trail-rated roots, from which the brand has strayed as it has introduced car-based crossover vehicles. He said Jeep should not use its brand name "to pass off a less-than-Jeep product" and compromise its "backwoods and off-road capability." He added, "If you want a crossover SUV that you won't take out of the garage because it's raining, that's not going to be a Jeep. It doesn't need to be. You've got Dodge for that."
And Then There Was...
So what does that leave?
The Jeep Wrangler has been Chrysler's most successful vehicle of late.
The jury remains out on Chrysler's new bread-and-butter minivans. Just introduced, sales of the 2008 Chrysler Town & Country were up in October; sales of the 2008 Dodge Grand Caravan were down. The entire minivan segment has been down, in fact.
A newly designed Dodge Ram joins the line in 2008 as does the Dodge Challenger, albeit in a limited 5,000-unit run for the 2008 model year before the full run for 2009.
Chrysler also has the Dodge Journey crossover arriving next year. Even smaller than the Pacifica, it looks better suited to overseas markets, where it will be sold, than the U.S., which has been leaning toward crossovers the size of the Ford Edge and GM's Buick Enclave and the like.
Where Are the Seedlings?
If you tend an orchard, you trim the dead to make way for the new. Chrysler is clearing out the dead, but where are the seedlings — which take as long as four years to sprout — being planted for Chrysler's future?
Chrysler desperately needs more crossovers, possibly hybrids and definitely a small car below the Dodge Caliber, now that oil prices are approaching $100 a barrel.
Chrysler had counted on its Chinese partner Chery to help develop a small car for North America, but that project has stumbled. Now Chrysler is shopping for partners with existing platforms upon which Chrysler can position its own "top hats," as Chrysler Chairman and CEO Bob Nardelli describes it.
Coming on board only in September, former Toyota executive Jim Press said his new company is working on a new product plan. He is studying the current and proposed future product lines to come up "with not just a quick answer but a long-term strategic vision of what the company's product portfolio should be like in five, six, 10 and 12 years from now, and then where the current products fit in."
And — thank you very much, but no — Chrysler doesn't need a product guru à la General Motors' Bob Lutz, insists Press. Chrysler engineering and design are strong in executing new models they are asked to produce, Press notes. What Press intends to do is personally direct the product planning and bring the customer's voice "as the driving force" behind new models.
Chrysler had better start driving as fast on the product development front as it is on the cost-cutting one or it will be left with nothing to sell.
The remaining question is, what seedlings is Chrysler planting for its future model line?
Going Away
Chrysler announced last week that it is dropping from its product portfolio four slow-selling models. Going away in 2008 will be the Dodge Magnum and the Chrysler Crossfire, Pacifica and PT Cruiser convertible. These are the obvious models to clear away from among the overlapping models in Chrysler's line.
The Dodge Magnum was a bold move for Chrysler — the revival of an American station wagon with a macho look. But after the first blush, the Magnum found limited appeal among the masses.
Chrysler missed the mark from Day One with the Pacifica. Among the first crossovers, the Pacifica came in overpriced, underpowered and cramped on interior space. Despite re-pricing and product changes, including a more powerful engine and a cheaper, five-passenger version, the Pacifica never recovered from its bad start.
The days have long been numbered for the retro-styled, now long-in-the-tooth PT Cruiser. While Chrysler only has announced the demise of the convertible version, the elimination of the standard-issue PT can't be far away.
The Crossfire, a head-turner on a solid Mercedes-Benz architecture, suffered an identity crisis. It wasn't really a sports car as it was pitched, so it failed to find much of an audience.
Additional Pruning
More pruning of the line is assured. Chrysler's dilemma has been that about 70 percent of its sales have been in trucks and SUVs, the highest percentage in the industry and way too high in this era of high gas prices. But last week's announcement of departing models won't rectify the issue, so there's more to be done to shift the balance.
In February, Chrysler announced the Delaware assembly plant that makes the Chrysler Aspen and Dodge Durango would close. This leaves in question the future of the Durango and Aspen, which are scheduled to receive a two-mode hybrid powertrain shared with General Motors and BMW models in early 2008.
The future of the Dakota pickup truck is questionable. Sales have been down double digits this year in a segment slumping due to high gas prices.
The remainder of the aged PT Cruiser line is likely to go before long.
Rumors ran rampant in Detroit after last week's announcement that the Chrysler Sebring's future could be short-lived. Chrysler announced that the plant which makes the Sebring along with the Dodge Avenger (both redesigned just this year) drops to a single shift, hardly a profitable level of capacity utilization.
The ridiculous Jeep Commander — a giant, squared-off sport-utility with a dangerous lack of rear visibility — is a likely candidate. The car-based Jeeps could be on the chopping block, too.
Making Brand Identity Clearer
At his first meeting with the media, Jim Press, Chrysler's vice chairman in charge of sales and marketing, said the automaker's three brands will become more focused and distinctive in the future, with fewer overlapping models.
"We need to use the portfolio to our advantage to preserve the clarity of our brands and not blur them," he said.
With Chrysler losing the Crossfire and Pacifica and potentially the PT Cruiser and Aspen, it's left with only the aging 300 and the new Town & Country minivan. One wonders what reason it has to exist — or what it will exist on.
Press insists — as have many of those before him with a conspicuous lack of success — the Chrysler brand can "go after an upscale luxury, higher-value-added and more sophisticated market."
Meanwhile, Press sees Dodge as "the volume leader with trucks and a full spectrum of vehicles."
Press suggested Jeep needed to get back to its trail-rated roots, from which the brand has strayed as it has introduced car-based crossover vehicles. He said Jeep should not use its brand name "to pass off a less-than-Jeep product" and compromise its "backwoods and off-road capability." He added, "If you want a crossover SUV that you won't take out of the garage because it's raining, that's not going to be a Jeep. It doesn't need to be. You've got Dodge for that."
And Then There Was...
So what does that leave?
The Jeep Wrangler has been Chrysler's most successful vehicle of late.
The jury remains out on Chrysler's new bread-and-butter minivans. Just introduced, sales of the 2008 Chrysler Town & Country were up in October; sales of the 2008 Dodge Grand Caravan were down. The entire minivan segment has been down, in fact.
A newly designed Dodge Ram joins the line in 2008 as does the Dodge Challenger, albeit in a limited 5,000-unit run for the 2008 model year before the full run for 2009.
Chrysler also has the Dodge Journey crossover arriving next year. Even smaller than the Pacifica, it looks better suited to overseas markets, where it will be sold, than the U.S., which has been leaning toward crossovers the size of the Ford Edge and GM's Buick Enclave and the like.
Where Are the Seedlings?
If you tend an orchard, you trim the dead to make way for the new. Chrysler is clearing out the dead, but where are the seedlings — which take as long as four years to sprout — being planted for Chrysler's future?
Chrysler desperately needs more crossovers, possibly hybrids and definitely a small car below the Dodge Caliber, now that oil prices are approaching $100 a barrel.
Chrysler had counted on its Chinese partner Chery to help develop a small car for North America, but that project has stumbled. Now Chrysler is shopping for partners with existing platforms upon which Chrysler can position its own "top hats," as Chrysler Chairman and CEO Bob Nardelli describes it.
Coming on board only in September, former Toyota executive Jim Press said his new company is working on a new product plan. He is studying the current and proposed future product lines to come up "with not just a quick answer but a long-term strategic vision of what the company's product portfolio should be like in five, six, 10 and 12 years from now, and then where the current products fit in."
And — thank you very much, but no — Chrysler doesn't need a product guru à la General Motors' Bob Lutz, insists Press. Chrysler engineering and design are strong in executing new models they are asked to produce, Press notes. What Press intends to do is personally direct the product planning and bring the customer's voice "as the driving force" behind new models.
Chrysler had better start driving as fast on the product development front as it is on the cost-cutting one or it will be left with nothing to sell.
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