Sergio Marchionne’s misguided obsession with the alleged brand equity of his recently-acquired Chrysler Group marques has deepened, as Chrysler, Dodge and Jeep launched new branded merchandise today [hilarious press release here]. The funniest part of the whole cross-branding effort is the very idea that significant portions of the population want their day-to-day goods slathered with Chrysler Group brand names. The second funniest? The products themselves. The Chrysler Collection features such “luxury gifts” as an $11.95 leather calculator, a $199.95 mahogany humidor, and a $21.95 mini umbrella, all tagged with Chrysler’s new Aston-alike logo and doubtless finished in the same fine materials as the Sebring’s interior. If Davos had a Wal-Mart, this is what they’d sell.
Carscoop dug up these drawings from a Chrysler patent filing for the Dodge-branded version of the forthcoming 2011 Jeep Grand Cherokee. Autoblog figures Dodge will drop the Durango name in favor of resurrecting the Magnum moniker, though given that model’s distinct lack of success, that would be a questionable strategy. On the other hand, the Durango name doesn’t have a lot of tread left on it either… but then what Chrysler Group nameplate does? [UPDATE: Grand Cherokee pricing/trim levels apparently leaked here, with prices reportedly ranging from $31,480 to $45,770 ]
Having re-birthed themselves at the taxpayers’ expense, one of Chrysler’s top priorities is restoring the brand equity that has bled out since the Daimler takeover. First up was the move to spin “Ram” off as its own brand, and now it seems that no-one is safe from “re-birth,” as UPI.com reports that Chrysler are rethinking their strongest brand, Jeep. Unfortunately, one man’s brand rebirth is another man’s brand betrayal. Chrysler want to replace all of Jeep’s products, except for the Wrangler and Grand Cherokee, and the idea is to utilise Fiat’s experience of fuel efficient engines as the basis for it. That means Jeep is likely to become smaller, more fuel-efficient and less off-road capable [rumors of a Fiat Panda 4×4-based Jeep (rendered above) date back to the earliest days of the Fiat-Chrysler alliance]. If you had to boil the proposed shift into a single word, UPI figures it would be “soft.” And the markets have reacted to this news in pretty much the same way you’ve probably just reacted: they think the idea is bad. Very bad.
In the past, Jeep’s done it up big for the NAIAS, unveiling wild concepts, driving new production models through plate glass, and the like. This year though, things are a bit tight. Instead of throwing a booze-soaked bash around some miles-from-production concept, Sergio Marchionne is going to lay out some saltines and Tang and let visitors paste some cheap decals he picked up in China on a Wrangler. All this in celebration of Jeep’s first new products in ages: the Unlimited Mountain and Islander edition Wranglers. Featuring the cheapest, most gimmicky-looking graphic decals and upholstery ever foisted upon the buying public (random latitude/longitude readings? really?), these “special” editions need to keep Jeep gasping along until ChryCo can get the suppliers lined up for the new Grand Cherokee. Meanwhile, stand by for more special editions from Chrysler, hinted at in the firm’s five year plan. This is going to get even uglier before the actual Fiat products show up later this year.
Chrysler have seen the Detroit Auto Show as a venue for excessively extroverted stunts. Previous years saw a Jeep dropping from the ceiling, leaping minivans and cowboys herding cattle outside the exhibit hall. Top Chrysler executives even traditionally poured drinks for visitors at its Firehouse bar. But with the economy coming of recession and Chrysler coming out a Chapter 11 reorganisation, CEO Sergio Marchionne feels that the extravagance needs to be severely curtailed, and according to Asiaone.com, he has put an embargo on press events. “We wanted to be respectful of everyone’s time. Mr. Marchionne is a very practical guy,” Chrysler spokesman Rick Deneau told AFP. “We didn’t have anything to show.” Well, besides a Lancia rebadged as a Chrysler, but who wants to draw a lot of attention to that?
Well, we’ve been here before… about this time last year, to be exact. The Freep reports that Chrysler, which had to quit leasing for much of last year due to falling resale values and the credit crunch, is reinstating subsidized leasing for its 26,000 qualifying retirees. Under the terms of the plan, retirees could lease up to two 2010 Chrysler, Dodge or Jeep products with no down payment and free scheduled maintenance. The 36-month leases run from December 9 through June 30, 2010. According to the Freep, retirees will pay $100 per month less on average than Chrysler employees who have access to two-year leases. GMAC, which is financing the leases, is set to receive another government bailout of “less than” $5.6b on top of the $13.5b it has already received from the TARP program.
It’s officially unanimous: literally everyone thinks the new Jeep, Dodge and Chrysler ads from Sergio Marchionne’s brain trust are crap. Sure, you knew that TTAC doesn’t think much of the spots, but were you aware that Chrysler’s dealer council has requested that Chrysler stop showing the ads? Sadly, Bloomberg only quotes one dealer on the plea, who explains that
it is a little difficult for us to understand because it is far different from what we were used to seeing. The message to us is that it is branding, branding, branding, and maybe that will work.
Initial indications of November’s sales numbers show an industry exhibiting some signs of leveling off after a solid year of steep declines. And when the rest of the industry is merely flat, Chrysler has to satisfy itself with slightly-less-dramatic-than-usual declines. Though Chrysler’s sales [full PDF release here] were “only” down 25 percent compared to November 2008, things were hardly going well a year ago. As a result, Chrysler sold an embarrassing 63,560 units total, ending the month with a 64-day supply of vehicles despite offering some of the industry’s most generous incentives. Forget the percentages, Chrysler’s niche-like volume is the killer here… and it’s relentlessly slipping away as the Pentastarred zombie crashes into oblivion. (Read More…)
TTAC did not file a full Chrysler Zombie Watch from the launch of Chrysler’s five year business and product plan, but two major points dominated our coverage. The first was this graph that shows 2009 as a trough year for Chrysler sales, with 2010 heralding a major and sustained turnaround in Chrysler’s fortunes beginning next year. Underlying this rosy projection is the second main point of Chrysler’s turnaround, a product/branding strategy that we summarized as “refresh and market like hell.” But refreshes take time, which is something that Chrysler simply doesn’t have. While the automotive world waits for the crucial Fiat-fettled refreshed Chryslers (due to begin arriving at the end of 2010), the “market like hell” portion of the plan is hitting America’s airwaves first, in the form of new ads aimed at reviving “consideration” of Chrysler’s damaged brands. But now that we’ve seen the opening salvos in this $1.4b war on consumer apathy, it’s becoming clear that Chrysler’s journey (no pun intended) of a thousand miles is beginning with a stumble.
Despite already having some of the highest incentives in the game right now, Chrysler is joining GM in putting more cash on the hood to clear out year-end inventory. Automotive News [sub] reports that Chrysler will be adding $1,000 to $1,500 in incentives per vehicle, on top of October’s $3,219 per vehicle average (as calculated by Edmunds). According to the same Edmunds analysis, the average industry incentive is $2,468 per vehicle. This continued reliance on incentives contradicts a number of Sergio Marchionne’s statements at the presentation of Chrysler’s five year product and business plan, in which he argued that Chrysler could not rely on incentives to push volume. Marchionne claims to believe the incentive-based volume chasing is “insane,” but his commitment to a sustainable business plan is about to be tested. For Chrysler’s five year plan to succeed, its sales need to turn around fast, making 2009 the trough year indicated on this graph. But with no new product (and by new product, we mean refreshed product) due out until the fourth quarter of next year, such a turnaround seems impossible without huge incentives. And yet Chrysler also showed graphs projecting a direct relationship between volume and profit, meaning there is little to no wiggle room for profit-sapping incentives. Rock, hard place, I’d like you to meet Chrysler Group.
There’s all kinds of controversy over what makes a car “green” and what doesn’t. Some point to size and efficiency, crucifying Hummers and full-size trucks as criminals against the planet. Others point to lifecycle greenhouse gas emissions, battery-component mining pollution and other less-obvious measures to excoriate hybrids. In any case, TTAC’s scientific department isn’t well-funded enough to issue a comprehensive report on the subject. Forbes may not have tested cars itself, or dug into true “dust-to-dust” footprints, but it’s gone ahead and published a list of “America’s Dirtiest Vehicles” anyway. Let’s take a look, shall we?
If you’re like me, you spent most of the weekend huddled under a blanket, half-watching television and praying for the flu agony to be over. And nobody who watched a considerable amount television this weekend could have avoided the latest flight of heavy-handed ads from Jeep and Chrysler’s new Ram brand. “My Name Is Ram” and the E.E. Cummings-inspired “i am. Jeep” campaigns are blitzing airwaves across the country as the New, New Chrysler gears up to make its wildly optimistic sales goals. After five months of total silence coming out of bankruptcy, the ads are coming out in earnest, and they’ll be running non-stop in hopes of catching up with the $100 per retail sale ad spend goal for 2009. Next year, Chrysler’s ad spending will go up to $170 per projected sale, peaking in 2011 at $210 per planned retail sale. And this increase in ad spending appears to explain why Chrysler’s sales projection charts swing wildly upwards after a dismal 2009. After all, if throwing upward of a billion bucks per year won’t change consumer perceptions, what will? Well, besides new product, anyway. There’s many a slip twixt the PowerPoint and the profit.
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