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Sergio Marchionne is still taking questions during Chrysler’s Q1 conference call, so while you wait for the latest on Chrysler’s predicament, take a look at the product end of the turnaround plan. Chrysler will launch three new products by the end of September. Between October 1 and December 31, Chrysler is re-launching 10 new or refreshed products… that’s one new launch every ten days. In the middle of the holiday shopping season, when cars are usually crowded out by more gift-able purchases. It’s going to be a Chrysler-lanche… but will anyone notice? [Full PDF presentation from today’s call here].
28 Comments on “What’s Wrong With This Picture: Here Comes The (Chrysler) Avalanche...”
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One has to wonder how long Fiat will be willing or able to dump money into a company it doesn’t even own a majority stake in. There are expansion rules based on investment, but will they start thinking about the proverb of throwing good money after bad?
It’s not a matter of FIAT dumping money into Chrysler. Yes they are spending some, but it’s mostly technology transfer and platforms. The cash for vehicle development is coming from Chrysler. They have 5-7 billion leftover after the C11. The question isn’t about FIAT’s money but whether Chrysler’s money will last until the new product improves sales.
What will be interesting is the number of segments in which Chrysler will offer refreshed vehicles which will have no domestic competition. Grand Cherokee – The Ford Explorer has been the only serious alternative, and it is going away. I have read that the new GC is supposed to be a very nice vehicle.
The Chrysler 300 – Buick has nothing close, the G8 is gone, and the FoMoCo Panther is almost in the grave (to the extent that it is even competitive). A refreshed 300 will not be the knockout it was in 2005, but it should be a solid seller.
Then there is the minivan. There is no domestic competition. Toyota has raised the bar, and Honda will soon. If the T&C/Caravan gets a significant refresh, Chrysler will sell a lot of these.
The pentastar engine should be a game-changer as well. Chrysler engines have been a crap shoot recently. Old timers like the 3.3/3.8 or the 3.5 are excellent, durable engines. Others, like the 2.7, have been junk. A decent engine in a decent Sebring may take awhile to build some sales, but a new, attractive Sebring convertible would be another car with no significant competition from the domestics.
Chrysler is wise to focus on lesser-served niches until it can get its strength back.
Don’t forget, the Grand Cherokee is very popular overseas as well. Don’t think of this in terms of only the domestic market.
I’m excited to see the engineering changes across their range, a significant injection of modern European systems design and execution should do wonders for these vehicles’ general marketability in the US.
I think the size of the population who won’t consider foreign cars is shrinking, after 2 of the 3 US makers took govt. money.
Chryslers problem is they don’t have a clearly defined enough market – they’re trying to segment based upon model, so they compete in all segments but prevail in few. Korean car makers are going to quickly dominate the low end of the market – first on the coast but then moving inland. The value is just hard to beat. The high end market will remain German and Japanese, which leaves the middle segment, and trucks/SUV’s. It’s a big swatch of a market, but the Japanese are in this space too, Korean car makers are trying to expand in to it, and so it’ll be hard for Chrysler to really get a foot hold.
I imagine Jeep will survive (although might have new owners), the RAM brand will get sold, but in a few years it’ll just be Fiats but no Dodge or Chrysler. In the end, I think Sergione bought a distribution network for North America more than anything else.
Ford decided against importing the Ka to the states, but what is a Ka but a Nuovo 500 with kinetic design?
Everyone notices handsome cars :)
The Compass is still on the chart? Why (please, somebody tell me) won’t that abomination of all things Jeep finally die?
It’s been pointed out multiple times that the Compass fills in the economies of scale for the Belvidere plant where the Caliber and Patriot are also made.
Will they have Ed Whitaker do their commercials that talk about how their Govt loans were paid back?
For the new Grand Cherokee to save Chrysler, at least three things will need to happen.
– Gas will need to continue to be “cheap.” No spikes in prices, no alarms at the pumps.
– Chrysler will have to look like it is going to survive. If the media continues to pretend that it is “covering” Chrysler, that might happen. But nobody will want to buy this car if the company looks like it is on the ropes.
– SUVs will still have to be popular with a particular crowd.
I don’t have a lot of hope for the makeover editions of the rest of the line-up. That’ll take a helluva magic wand to make that happen.
“Then there is the minivan. There is no domestic competition.”
Uh, technically, when it comes to minivans, Chrysler has MOSTLY domestic competition. Both the Odyssey and the Sienna are built in the United States, whereas the Chrysler minivans are all assembled in Canada. (The Kia Sedona is assembled in Korea.) The Buick Enclave and Chevrolet Traverse 3-row crossovers are assembled in the USA, as is the Ford Flex.
You are, of course, correct. I still fall into that habit of “American cars” (many of which are built in Canada and Mexico) and “Foreign cars” (or Furrin cars, many of which are produced in the USA including my home state of Indiana).
My point is that there is still a (shrinking) segment of the population that will cross shop GM, Ford and Chrysler but will not consider a “foreign” brand, even when made in USA. Chrysler has to clear this hurdle first, to get GM and Ford customers into their vehicles. This will add some volume and breathing room (and credibility) for the second stage of going after Honda and Toyota. Right now, Ford is the only traditional US manufacturer that can compare with the Japaneese and Korean competition with a straight face. For now, Chrysler has to be content to pick up ex GM and Ford customers who want a minivan (or SUV or big rear drive V8 sedan) but cannot get one from their first choice company.
Just like the Chrysler minivans, the Ford Flex is made in Canada, not the US.
The Flex is made in Canada. Please check your facts before opining, thanks!
At least I now understand where this sudden increase in cash came from. They moved the current liability (VEBA) to long term liabilities. There was no real increase in cash, just smoke and mirrors.
Talking about smoke and mirrors, where I live, land of freezing winters and boiling summers, aging Chrysler products are always the first to show blue exhaust-and the first to look old. Their paint is the first to fade and their accessories (mirrors, get it?) and trim look ratty years too early. They really must have beaten their suppliers with a stick. Moreover, one rarely sees an older Dodge pickup on the road. They simply don’t seem to last. Maybe I just have a bitter taste in my mouth from my wife’s ’78 LeBaron. Slant six. No torque. No brakes. No steering. Enormous body gaps, even for the seventies.
In brief, Chrysler will have to engineer some verifiable reliability into their vehicles before I would consider one.
It’s hard to forgive and forget once you’ve been burned. But I’m really pleased with my 2005 Jeep. Repair-wise it’s been a little better than my two 90s-era Hondas.
Data point No. 1. I just bought a 99 Chrysler T&C minivan. 187K on the original 3.3 V6 AND on the original transmission (that shifts like a dream, thank you.) It has used no oil in the 1500 miles that I have driven it over the last month. And the body/paint/trim is great. After driving this car for a month, I now see why so many people bought them, and I am reassessing my previous slams on Chrysler durability (my mechanic had to talk me into considering one of these, telling me that he has one coming in with nearly 300K on its original engine and transmission).
Among older minivans, anyway, these may be the best out there. The Toyotas may be the only ones that beat them in durability. You can pay 3 times the amount for an Odyssey, and have incurable transmission problems. The less said the rest of the used minivans the better.
Data point No. 2 – a sister in law had a 95 Intrepid with nearly 300K on the original 3.5 engine when she got rid of it a couple of years ago. She did replace a tranny at around 180K or so, IIRC. The drivers seat padding was starting to fail, but it still looked pretty good
I understand your reaction to your 78 LeBaron. A 77 New Yorker did the same thing to me, and I was a dedicated Mopar head. I guess my point is that there are some pockets of old fashoned durability out there in Moparland. Anecdotally, I wonder if the high depreciation causes these cars to get snapped up by those least able to/inclined to maintain them properly. Of course, some of the cars (Sebrings with the 2.7) are just crap and you will not find me defending them.
Really? You base your opinion of Chrysler on something built 33 years ago? Thanks, moving along…
+1 picard234
33 years seems like an awful long time to carry this sort of ill will, especially considering most cars from the ’70s were complete crap…including the Japanese – sure, some models may not have had as many mechanical issues, but most rusted away in short order. Time to let old wounds heal and move on with your life. Considering how long many of the B&B on here hold grudges, I hate to be related to them :)
Holding a grude for an old lemon is what drives much of the hating of domestic cars, and it’s ridiculous. I had a 77 Dodge Powerwagon that was bright yellow, a perfect color for a lemon. It was horrible. Bad welds, bad wiring, leaks everywhere it could leak, it had it all. If I based my opinion of Chrysler products on that truck, I never would have bought my:
1985 Caravan. I sold it for one reason, it was gutless, as all 85 Caravan’s were.
1993 Grand Cherokee. All in all, I liked it. It wasn’t perfect, but Chrysler covered all the non wear items, and it was only off the road one day.
1999 Grand Cherokee. I had no real problems with it in the 18 months I had it, but the seat killed my back. It got to the point that if I drove it over 20 mintutes, I was in misery. My friend loves his, bought right after I got mine.
2003 Ram 4×4. I still miss it, especially in the winter. I don’t miss the gas costs to run it though.
2008 Charger R/T. Only problem in 2.5 years is a rattle in the dash when it gets really cold. I guess I will have to try to fix it myself, the dealer can hear it too, but can’t seem to figure out what’s causing it.
Any of these vehicles were/are a dream compared to the two Subarus a friend’s wife had in the early 90’s, and the T100 he had for 3 years on a lease. The Subs ate brake calipers at amazing speed, needing annual replacement on both cars. amd the parts weren’t cheap. The first one was wrecked and it was severely rusted inside the rear quarters, and it was only 4 years old. The T100 had electrical issues without end, and he was really happy he had leased it. It was replaced with an F150, a better vehicle in every way. He still has it, he uses it for picking up stuff once in a while, but his oldest kid drives it most of the time. It’s got over 300K on it now, and he popped a junkyard trans in it last year at 280,000. It’s got no holes in it yet, and the only visible rust is on the bottom of the tailgate.
The Fiat 500 might be small enough to make a nice stocking stuffer??? Or at least big enough to draw in a little extra showroom traffic for the Chrysler refreshes.
***I think the size of the population who won’t consider foreign cars is shrinking, after 2 of the 3 US makers took govt. money.***
make that 3 out of 3.
and it’s not like the Japanese, Korean, and various EU gov’ts don’t help out their home automakers.
oh and then there are all the tax abatements that Honda/Toyota/Nissan/GM/F/etc. receive from state, local gov’ts for new facilities.
I wish all of those principled capitalists realized how heavily subsidized things really are.
oh and then there are all the tax abatements that Honda/Toyota/Nissan/GM/F/etc. receive from state, local gov’ts for new facilities.
Tax abatement isn’t government subsidy. It’s part of the offer, before the contract is signed.
The government will either get a reduced tax revenue, or no revenue at all. So Toyota/Honda actually increased the government’s revenue by accepting the tax abatement.
It’s like when I am buying a car. Myself (Toyota/Honda) is actually increasing the salesperson’s (government) income by accepting the discount (tax abatement) that he offered. In no way is he subsidizing me.
@wsn: You make two incorrect assumptions: 1) that the land where these factories are built would otherwise not be used for any other purpose and 2) that there is no cost to the state and local governments for providing services to the factories that they lure with their abatements. Call them subsidies or abatements but they are not without costs to the taxpayers and they create an uneven competitive playing field that favors new entrants in an industry (mostly transplants in the case of the auto industry) over established competitors.
I’m going to be glad come Q4. I’m curious about the Charger. I would gladly buy one with a new Pentastar engine(for the right price, Chrysler offers good incentives). The vehicle I should really be getting is a Mustang or a Miata, but the former is too common and the latter is too small.
Interesting that they call the minivan “Minivan” instead of Grand Caravan. Perhaps they are changing the name of it? Seems like a dumb idea, but the only other one they segment labeled was the unnamed Durango replacement.