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Chrysler’s market status

45K views 284 replies 45 participants last post by  jerseyjoe 
#1 ·
I came across this, from 1996, and thought it might be interesting for those who are discussing Chrysler’s “luxury vs mainstream” status. Note that median household income was $35,000 and average household income was $47,000, so the owners tended to have higher than normal incomes. The attractiveness of the new cars resulted in a leap in the income of the buyers — ’course the “old Chrysler” cars appealed to older people so some of them may have been wealthy but retired.

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#232 ·
Just saw Mazda and Buick referred to as under $35k luxury brand. I think writer of web article was using a verry loose interperation of the term. Caddy, Mercedes, Audi and Infinity thrown in to give some meaning to artice. Figure just a few months back Chrysler could fit in, surely Pacifica is luxury using those standards.
 
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#6 ·
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What I remembered of it was that Chrysler came across as an upscale brand with performance (not that much different to how SM/FCA is trying to position Dodge at this time); and that Imperial was it's own brand, spun off of Chrysler as the Luxo model.

I don't think there was much in the way of obvious differentiation between Mainstream and Premium as there is now, but were trim levels on the same architecture.

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#10 · (Edited)
Good read. Thank you for sharing.

This may help explain the ongoing struggle facing Chrysler, Buick, Acura, Lincoln and Volvo, and perhaps the long demise of Oldsmobile, Saab and Pontiac.

Wonder what this means for long-term Toyota and Honda, who have long occupied a "premium mass" position.
 
#9 ·
Add the fact that middle class since '70 is splitting, with one part, someone would write that "middle class" is disappearing.
This trend is even more accentuated since 2008.

Look for example at figure 2 at page 12 of "The U.S. Income Distribution: Trends and Issues" published by Congressional Research Service in december 2016.
https://fas.org/sgp/crs/misc/R44705.pdf
https://fas.org/sgp/crs/misc/R44705.pdf
And also
"... Key Findings

Income inequality has increased over the past 40 years. It has increased most relative to the top of
the income distribution, but inequality also grew among the lower 80%.
In 1975, mean household income in the top quintile (i.e., top 20%) was 10.3 times greater than mean income in the bottom quintile; in 2015, it was 16.3 times greater. However, a less prominent trend of rising inequality can also be seen among households in the lower 80% of the income distribution. In 1975, mean income in the 4th quintile was 5.9 times greater than mean income in the bottom quintile; in 2015, it was 7.4 times greater.
..."

It would of interest to know, in addition to average car transaction price, also the distribution of number of vehicles sold per price category and it variations in last decades.
 
#17 ·
Something I can't help but wonder...is the death of the "premium" brand a good thing? It's good that mainstream makers are offering higher end trims, but at the end of the day a Ford Focus Titanium (for example) isn't a fundamentally different car than a Focus S. Mind you, a Mercury Lynx back in the day wasn't a fundamentally different car than a Ford Escort, but there were things available in the Lynx that you couldn't get in the Escort. Not just that, but the Mercury brand had a slightly more prestigious air about it than Ford, and that could be off-putting for some buyers.

This is probably one of the the things that's fueled the "poverty lux" segment (Mercedes CLA, BMW 2-series, perhaps someday Alfa Romeo Giulietta?)...but which is better, a bone thrown from a maker that usually caters to a higher end clientele or a whole brand aimed at buyers with money to spend on a good vehicle but aren't necessarily rich and want at least the image of something better than a "mainstream" car?
 
#21 ·
I'm not sure you can really say whether it's a good thing or a bad thing. Ultimately, it was decided by customer purchasing patterns, so in the end, we're the ones that said "do this, it's a good thing" so to speak. But ultimately, as low-end lux trims and high-end mainstream trims poroliferated, it left a lot less room for the tweener brands to exist in the first place, and customers either went after the "better deal" (mainstream car with lux trim) or "entry level prestige" (low-end lux model).

Good or bad, there was less and less differentiation left for them to exist in. Unless you've got a very serious niche to work with, like Jeep or Mini.
 
#19 ·
It certainly has evolved over the years. Today we have Ferrari, Maserati, Alfa Romeo and all of the SRT vehicles which fill the "luxury" bill - before even Chrysler's top trim levels. Perhaps the focus has gotten better. The Pacifica isn't cheap but it appeals to a broad range of shoppers, up to and including luxury.

In the '60's and '70's Chrysler kind of became the goto for luxury - but that changed gadually; indeed, the Chrysler Imperial has lingered in various iterations ever since.

And I think when Acura and Infiniti and Lexus started putting a finer point on - where luxury begins, Chrysler cars lost the way..
 
#20 ·
Actually, one more thought on mainstream vs. premium vs. luxury...

Both Mazda and Kia are looking to move upmarket, but currently they lack the prestige to command luxury-level pricing. Maybe they can take the place of departed brands like Mercury, Pontiac, Oldsmobile etc. as the "new premium"...
 
#23 ·
As someone who was a GM fan until GM killed off most of the brands I liked, what caused the demise of Pontiac and Oldsmobile wasn't that they were trying to compete in the "premium" area, but that they lacked an identity. They both had an identity, but had lost their way as they tried to be everything to everybody. Pontiac probably could have made it if the crash hadn't come in 2008, as they were rebuilding their performance image. Oldsmobile tried to reinvent itself as a "import-style" brand, which was so different from their history that they couldn't get it to stick.

The lesson here...Jeep is sticking with the image it has had for years, and it is doing well. Dodge's performance image has enough of a connection to its past that it is doing well. Chrysler is wandering...is it premium? is it luxury? is it mainstream? Until FCA figures out that answer, I think Chrysler will struggle.
 
#30 ·
I have to agree, it has everything to do with marketing and brand positioning. The brands that have stayed consistent over the decades have survived, those that have not, have died. Unfortunately, the way FCA has floundered with Chrysler has probably killed the brand, UNLESS they return it to a premium position in the marketplace and maintain it's branding and advertising (and product) consistently for the foreseeable future. Otherwise Chrysler will disappear as a brand or become, like Lancia, a one trick pony.:(
 
#25 ·
To me this largely seems an argument ov which shade of blue is a "true blue". With the average cost of a new car at 32,086 (kelly bluebook) being perilously close to the median household income (56514 per Fred economic data) there are far too many Americans that cannot afford any new car let alone have the luxury of choosing one to "fit their personality". Hand-me downs and used cars are the ONLY option for these people-of whom myself and my wife are but two. Being a lifelong car fanatic, this has been a realization that has been a long time comming but is now undenighable. Even with improving finances, the cost of owning a home and raising our daughter, more than eat up the gains in wages we have made over the last few years, even as we enter our late forties. I look around and see my many of my cohort in similar situations but choosing to go deep into debt in order to afford what was once considered the American birthright.

Not seeking sympathy, trying to suggest this discussion is sounding to me to be increasingly tone deaf, but i guess it has more to do with me no longer being in the "target demographic" than it does with the topic in general.
 
#33 ·
You're not alone.

What has grown in the USA, for instance, over the last 10 years is a large group of people who have dropped out of the labor force ( solidly over 90 million as of the middle of 2016 ).

What you just said is completely understandable. I appreciate and applaud your honesty. Oooh, and you won't get sympathy from me; instead you'll get a hearty ' Yessir ' as what you write is real ... even palpable. I see it as true and accurate.
 
#26 ·
In today's vehicle market, is a premium BRAND necessary or can that niche be filled by a trim level? The bar for vehicles is set WAY higher than it used to be even for the entry level models and trims. The difference between say a Chevy and a Cadillac used to be shocking. These days, not so much. Stripper base models aren't really a thing anymore. Add to that the push for high quality materials in the interiors even on small cars (which at one time were garbage econo-boxes). Simply put, what defines "premium" now and how does that differ from what's become the base line expectation for all vehicles regardless of price point?
 
#27 ·
As for FCA... So Chrysler is trying to be both Buick and Chevrolet at the same time. They don't have a Cadillac competitor (in North America). And Dodge as a "performance" brand is sort of puzzling because who is their market competition supposed to be? No one has a performance brand - at least not even close to the price market Dodge is in.
 
#28 ·
IMO it should be a cheap alternative to a Cadillac, or like mentioned on a Buick type level (imo should be in between Buick and Cadillac) since we're missing a luxury Brand (Imperial). Dodge = Well priced Performance brand, Chrysler = Well priced Luxury Brand, Fiat being the compact/volume brand in lieu of Plymouth.

Idea World:

Dodge - performance (Charger/Challenger/midsize rwd-awd car, Durango, Halo car *viper/corvette competitor*)
Chrysler - Luxury/near premium (300, 200/100, rwd-awd GT Coupe/convertible, Pacifica)
Jeep - SUV's (do what they're doing)
Plymouth - Volume brand (Dart/Voyager/Journey)
Fiat - compact brand (500 lines, 124 spider)

Imperial - Premium Luxury (Lincoln crusher, Cadillac smasher, Audi Kicker)

Alfa - Independant, doing their own thing

That's my personal vision for the Chrysler group.
 
#31 · (Edited)
I think Portal is the future of Chrysler brand. A sedan, a limo, a crossover and a minivan all on the same electric/hybrid/ 4 cylinder fwd/and architecture built in the same factory with tech companies as partners.

FCA is building great cars. The Pacifica is a revelation. The evolved LX cars are far beyond anything Daimler would have done. I love our present lineup and can't wait for Giorgio based cars. Hate all the negativity, many people obviously can't escape the past. I recently sold one of the top Toyota mechanics in our county a Ram truck. In our area, people are trading their German cars for Jeeps every day.
 
#34 ·
In Europe, which hasn't seen the same scale of income shifts that the US has, the middle-market brands disappeared too.

Personal leasing plans on luxury brands is what killed the "premium mainstream" brands in Europe. For people who look no further than the monthly payment, getting a BMW for only ten or twenty more a month than a Ford looked like a great deal (ignoring that they were actually buying the Ford, but only renting the BMW)

Manufacturers love it too, because the hard end-of-lease date forces the customer to come back and either lease a new car or pay for the residual on the one they've got. And as nobody likes paying for something that they "already own", customers invariably go for a new lease.
 
#36 ·
The pressure is coming for Dodge as well as Hyundai, Toyota and others introduce higher performance vehicles into their full lineups, offering customers an alternative.
 
#40 ·
Whatever Chrysler will be (imo the Pacifica+Portal phev-centering of the brand come say 2020 is perfect, also allowing for exports to Europe?) in the usa market is a function of (a) Chrysler going into China in a sizeable way, i.e., with local assembly/partial-manufacture, esp phev and tech-ed up (b) whether FCA is able to navigate the political, policy and macro-economic large risks in the usa (auto) market over the next 1-3 years on the basis of its current and imo very correct approach of all-in with Jeep, Ram supplemented by Dodge, Alfa and Maserati, plus export plans for the new made-in-usa Jeeps.

Chrysler's time will come, IF the phev tech-ed and semi-luxed approach is followed post-2019 (when the firm will hopefully be debt free and much more profitable), AND (not 'or') fca starts a new jv for it in China to supplement China-made Jeeps, and/or relaunches Chrysler/Chrysler-as-Lancia Europe-wide from the shared fca dealerships. i.e., fca's Buick=Opel, except exclusively techy and phev-centered branding-wise?

Chrysler could be the next 'global' brand for fca (say 2020 onwards) after Jeep, Maserati, Alfa and (partially) Fiat.

imo THAT global career will be central to its viability and vitality EVEN in the usa, home market. i.e., FCA's Buick usa-via-China-and-Europe.
 
#41 ·
Let's be realistic here. The mainstream brands are Jeep and Ram. It FCA thought they could get away with marketing the Pacifica as a Jeep they would have. Chrysler is essentially the nameplate for vehicles that don't fit into the Jeep or Ram box. So for the moment that's a minivan and a large car. This is also why there's been no rush to bring a new B, C, or D segment CUV to market under either Chrysler or Dodge. As for Dodge - "American Muscle" is all fine and good so long as there's a market for it. Other brands fill those niches with one or two models. Others don't even bother. It's not a sustainable segment to maintain an entire brand.
 
#44 ·
the one thing we can count on is change. If/when the American Muscle trend runs dry they can always transition to a nostalgia niche, but the one thing that people never seem to get tired of is performance. Even when they demand fuel efficiency, buyers will gravitate towards the model that "has more pep".
 
#49 ·
And to all of the posters saying the Chrysler is leaving the luxury niche with no successor, just wait. Alfa is going to sell, and in volume once the dealers get Giulias. I am calling it right now, at the price point that Alfa is presenting the Giulia is going to be putting people that did not think they could own an Italian sports car, into them.
 
#54 ·
In the old days 60s/early 70;s I'd rather have a loaded Dodge Monaco then a new yorker or a loaded Impala then a caddy. You can't say that about the charger vs 300. even though the same platform the carger is to differant. A true Lux car needs to be big! The last car that barely fits that is the Buick Lucern and the caddy version the last for them i think was 2011.
Many folks that woul;d normally look at large/lux cars because of their smaller size are now buying cuv/suv now.
 
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