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From the Wall Street Journal (and Mr. Source!), we learn that Mitsubishi will not, as we had been led to believe, be replacing Chrysler four-cylinders with their own current design. Instead, an engine initially developed by Hyundai, with design changes suggested by Chrysler, Mercedes, and (not mentioned but we suspect they were there) Mitsubishi, will be used. One of Chrysler's suggestion was changing the bore spacing to allow for multiple displacements (1.8 to 2.4 liters). No formal decision has been made to use the engine, but given Mercedes' involvement and current trends, it doesn't seem likely that Mitsubishi or Chrysler will be given a choice, either.
In our opinion, this is not a bad move, since it seems that it truly is a joint effort. Chrysler may finally be able to take advantage of Mitsubishi's direct injection and perhaps other advanced technologies, such as variable valve timing, while still having an influence on the design. That's better than what we were expecting.
Ford is cutting 17,000 jobs, but has not yet definitely stated where. Three assembly plants will be closed.
As all automakers ended zero-percent financing with a sigh of relief, Chrysler restarted a more conventional program of rebates and low-rate loans. GM has already started a $2,002 cash rebate on most of its vehicles. The current package, which will expire March 5, covers all but the Liberty, 2001 models, and some high-value minivans. The PT Cruiser has finally been covered by incentives in the form of low-rate loans. [We can't resist an opinion - most people don't know how wonderful the PT is inside. They really have to emphasize its handling, ride, and comfort at some point.] Other rebates run up to $2,000, with financing as low as 3.9 percent. There are many plans. A seven year, 100,000 mile warranty is slated to end March 31.
BMW leapfrogged over Mercedes to become America's favorite European luxury car. Going into October, BMW had looked like it might overtake segment leader Lexus, but a strong ad campaign from Toyota and a couple of good, but not great, months for the Bimmers kept them in second place. Mercedes dropped to third, followed by Cadillac, Acura and Lincoln. Volvo was the only other luxury brand to break 100,000 sales for the year. Audi had a very good year, outselling Infiniti, Jaguar, Saab, Porsche and Land Rover.
Since the combined U.S. sales of Rolls-Royce, Bentley, Ferrari, Lamborghini, Aston-Martin, etc. don't total more than a thousand, I'm calling the race. Even if Volkswagen had sold the 5,000 Eurovans they had hoped, the import makers still definitely sold more passenger cars than Chrysler, Ford and GM. And light trucks definitely outsold cars in the land of the free and home of the brave. That's two very dubious firsts for the sales year. Top passenger car makers were GM, Ford, Toyota, Honda and Chrysler, in that order.
Incidentally, Americans still prefer German cars to Korean cars. The Germans are second only to the Japanese in total import sales. Volkswagen is the favorite with 2.08% of the total market.
Ford remains America's favorite brand. In addition to selling over 911,000 F-Series, a ton of Tauri and a flock of Foci, it also leads the full-size van and pony car categories. [Webmaster note: Ford as a company is still smaller than GM as a company.]
GM did manage to increase their market share for the first time in quite a while. They picked up just over 28% of the market for the year. And, with 31 different models, not counting Isuzu and the medium-size trucks they like to throw in, GM is the light truck leader. Now that the vanilla VUE has made its debut, you can buy at least one type of light-duty truck at any GM dealer except Saab.
Top five most popular cars were Accord, Camry, Taurus, Civic and Focus. GM's best-seller, the Chevy Cavalier, had to settle for #7 behind the Toyota Corolla. The best-selling Chrysler car was the Intrepid, which sold fewer than half the units posted by the Cavalier. [We note that the Cavalier is similar to the Sunfire, the Intrepid to the Concorde].
Chrysler maintained their leadership in the minivan market. The PT Cruiser and Jeep Liberty seem to be doing well, too. I know Chrysler's year-to-year figures are terrible, but you've got to remember Chrysler was having a heckuva year for the majority of 2000. I think the December 2001-December 2000 numbers are more indicative of what's going on in Auburn Hills.
The Aztek continued to underwhelm but GM has been revising their history to lower their expectations for the uglymobile, so it actually surpassed the most recent target the company claimed. In eighteen months, Pontiac has managed to move 38,523 Azteks. Compare that to the Rendezvous, which has racked up 31,754 sales in just 6 months. If nothing else, it proves taste is not altogether dead in America.
While 2001 turned out to be a very good sales year, what's going to be really interesting is to see what happens in 2002. GM's already announced a big rebate even though the free financing deals are over. A lot of sales that would have normally come next year were pulled into 2001 by skewed financing. This may mean that even if the economy recovers in the second half of 2002, Detroit may still have problems. Plus the fact that over a million people lost their jobs in 2001 may make a lot of people hesitant to commit to a new vehicle. One thing the folks in Detroit might want to look at is the very stong warranties being offered by the Koreans; Hyundai and Kia both had great years.
Among the other potholes ahead are: Declining rental sales, likely to remain slow until the economy picks up and travel becomes more popular; increased gas prices if OPEC has their way; probable action on the part of the government to either increase CAFE standards or bring SUVs into the same safety category as passenger cars by 2004 or 2005. That last could hasten the decline of the SUV market, which already shows signs of softening and is incredibly overcrowded. One thing a lot of people in the industry overlook is the fact that the relatively well-off and numerous baby-boomers are now getting to that time of life when climbing into a vehicle is neither as much fun nor as practical as it was when the yuppies spawned the SUV craze by falling in love with the Wagoneer back in the Reagan administration. And the youth market seems to be embracing other types of vehicles, especially ones that are more affordable than the big SUVs. Any of these could hurt the future of the American auto companies, all of whom are now dependent on light trucks not just for a majority of their sales, but the vast majority of any profits.
Chrysler, Ford and General Motors have all neglected the real-world, bread-and-butter passenger car market. While Lutz has the opportunity to go through GM's product development group like a combination of Rambo and the Terminator, both Chrysler and Ford need to get their houses in order from a new product standpoint.
While the newest numbers indicate Chrysler may be headed in a better direction, Chrysler can't keep hoping to inspire much-needed consumer interest and collateral sales with yet another niche product like the Crossfire (didn't work with the PT Cruiser, either). And its German parent isn't helping matters by continually postponing decisions on things like fielding the smart in the U.S. or worrying about protecting one brand or another at the expense of needed progress. If DCAG would bring the smart in under the Chrysler Group banner, it might at least get some folks into the showroom and buy time. If they can bring the Sprinter in as a Freightliner, they can bring in the smart as a Dodge. Besides, look at the number of new Mercedes passenger cars that have been introduced in the last five years and compare that to Chrysler.
Jürgen Schrempp got to cut Plymouth; that was his freebie. Despite what some think, cutting Chrysler and Dodge probably isn't an option unless it is accompanied by his (and Dieter Zetsche's) resignation and/or head. He has to show that his "acquisition" had some value beyond that long-gone cash. And I don't think a Mercedes-Mitsubishi amalgam is going to make it in the American market. Therefore, "cab-forward" needs some successors. Chrysler could do a lot worse than bringing out a new entry-level car that hit all the marks today's markets require. Might do better than another me-too "lifestyle" vehicle.
Ford has some solid products in the Taurus and Focus, but they need more than just a refresh. The new Mondeo is great, but it's expensive. That's why Ford is expected to bring it in as a Mercury. Of course, problem child Mercury has this new California location that hasn't produced much of anything except stale products and declining sales. Ford also needs to do something with the distinctly American Crown Victoria/Mercury Grand Marquis. The Impala is steadily eroding the CV's traditional markets. And I'm not just talking police cars. One of these days, Ford is even going to have to do something with the F-Series before the fact the GM C/K pickups are better costs the Blue Oval its most prestigious title. Bill Ford and Nick Scheele have to try to undo a lot of the damage Jac Nasser did. Look for big shakeups at Ford after the Detroit Auto Show. Ford is in a mess and most industry watchers are predicting a bloodbath. (Oddly enough, earlier bloodbaths are part of the problem now facing Ford, but they won't learn from that.)
Yup, 2002 is going to be an interesting year in the greater Detroit area. Much as I loved growing up there, I'm glad I'm a thousand miles away now.
Mr. Source wrote:
The new group PVO (Performance Vehicle Operations), is a GO!. The new engineering team combines Chrysler Group's specialty vehicle and motorsports know-how, much like the profitable high-end vehicle conversion group at Mercedes-AMG.This new team of people will create a line of extreme performance vehicles that will beat everyone else. PVO will bring together the best in performance, durable high-performance parts and some of the most talented and experienced motorsports and performance car engineers to produce exciting cars and trucks.
Performance Vehicle Operations will focus on enhancing Dodge, Jeep and Chrysler; they will create limited-volume specialty vehicles. PVO performance models engineered for the Dodge brand will carry the SRT badge. Their first creations are the 2003 Dodge Viper SRT-10, Dodge SRT-4, the Dodge Ram SRT-10.
PVO will also be responsible for motorsports engineering. PVO will become the Chrysler Group's center of expertise for application of technology in racing programs. They will also lead new product development efforts for the Mopar brand of performance parts.
They will work very close with product platforms to engineer and produce image vehicle conversions that support product image objectives As demonstrated by Viper and Prowler, PVO will provide a test bed for implementing new products, processes and material technologies for potential future high-volume applications, aftermarket-driven, performance packages for release through Mopar. PVO will provide technical expertise in support of all corporate motorsports programs. PVO provides a valued career path for the best Chrysler Group engineers.
The new team will be working mainly at Auburn Hills.
We have full details on these two amazing vehicles inside. In brief: The SRT-10. The Viper-tuned engine with handling and braking upgrades. 0-60 in 5 seconds. 500 horses. The Razor. $14,500. Rear wheel drive. 2.4 intercooled turbo. 0-60 in 6 seconds. Can you say "Road Runner"? We only wonder what the basis for this car is. Neon? Smart? A-class? More to come...see our main index page for links to the full pages.
Auto.com "is reporting that Neon and Lancer will only share about 35% of the same parts, each company will design their own body and interior. The mid sized cars designed by DC will be 65% of the same parts. Sounds like 'Chrysler Group' is coming out as the better off in this scenario." (Thanks, A.J. Hughes). Perhaps that's partly because DCX owns Chrysler outright, but only has about a third of Mitsubishi? Or perhaps it's because Neon sales continue to be strong, at least by Chrysler and Mitsubishi standards. Or maybe Dieter Zetsche really is having an impact - on Schrempp as much as anyone else.
The six-passenger, minivan-based station wagon has finally been named and unveiled. The Chrysler Pacifica has three rows of first-class eating, carlike handling, and a low step-in height, along with an appearance that matches other Chrysler models. The vehicle will feature adjustable pedals, a load-leveling rear suspension, and a second row of bucket seats with fold-flat capability. While front wheel drive, all wheel drive will be available on demand. The engine will, as expected, be a 225 horsepower version of the reliable 3.5 V6 that takes regular gas. Pricing will, surprisingly, be $25,000 - much less than the originally proposed $35,000. A four-seat variety may be produced, following Dieter Zetsche's resumption of the Chrysler tradition of actually making different varieties of the same vehicle.
GM's sales dipped 1.1 percent last year, Ford/Lincoln/Mercury dropped 6.1 percent, and Chrysler fell 9.9 percent. Toyota, Honda, Hyundai, Kia, and various luxury automakers made solid gains. It is worth noting that Chrysler may not have fallen had Plymouth sales not evaporated along with the brand - it seems most buyers went to other companies instead of Chrysler and Dodge.
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