Chinese Hornets
And in the latest news, Chery and DCX officials have been talking about a small Chrysler-branded car to be sold everywhere but North America, replacing prior thoughts of Dodge Smarts.
Yes, China - fashionable and sleazy. Fashionable in that every business in the US apparently wants to move all its work there, ignoring any impact that might have on their country (rationalizing it in the name of globalism, or, ignoring India, assuming Americans will all have jobs programming computers or something) or the possibility that transferring state of the art technology to China - which would have to be done to sell a competitive car in Europe - might backfire. Korea? Nope, don’t remember Korea. Never happened.
What are the other possibilities for the Hornet? Mainly, Volkswagen, but frankly that’s a Good Old Boy network and nothing else. Yes, the Polo is a nice enough vehicle, but really … Volkswagen? The company with quality in the toilet? Their main asset other than a rather nice diesel engine and cool, expensive, small-but-powerful engines is Wolfgang Bernhard. We know he and Dieter get along nicely, but that’s no reason to foist a VW on Dodge; neither is the agreement to use VW engines in Caliber diesels, or to sell modified Chrysler minivans as Volkswagens.
Frankly, I think there is no reason Chrysler could not do this inhouse other than the merger-required layoff of so many engineers, and the lack of funds resulting from Mercedes burning everything up to keep their cluttered vehicle lines intact while they try desparately to earn a profit. Had it not been for the merger, we’ll remind readers who have forgotten, Chrysler would have had a $10 billion (at least) cash fund to get them through hard times without sacrifice, as well as the ever-profitable Chrysler Credit, which now pays its cash directly to DCX. The reporters usually forget about Chrysler Credit when giving the merger full credit for Chrysler’s current tepid success.
The small car could even be made on a budget by resurrectingn plans for the first-generation Neon, which was smaller and lighter than the second generation. Shrink it down and safety-it-up, and you have a good, light small car with great cornering, a fun feel, and surprising acceleration with the base 1.8 liter World Engine, which would give the Hornet best in class power (by a huge margin). It would not go up directly against the cheaper Yaris and Fit, but it would give them Fits, so to speak, by being so much better.
Let’s assume, though, that there’s no money to do that. There probably IS no money to do that, because, as previously noted, Mercedes needs to have dozens of different models and Maybach and Smart, and all lose money, and Mercedes is busy rebuilding everything so someday they might make a profit; and of course Chrysler is also investing in the Challenger, hybridization, diesel versions, six-speed automatics, a new small V6, new minivans, and new flexible factories. (The UAW might cough up a few billion in savings if given the choice of that and a new factory in China, to be fair, but only if someone asked them.)
If Chrylser ran the factory in China they could keep quality up. However, we’d be giving away both our human and manufacturing technology at that point, and that would be eventual slow suicide. Unless you think Chery would be less likely than Hyundai to invade home markets eventually.
Since we already know Chery is planning to enter the US market, I don’t see teaching them to build cars as being a good idea.
Mitsubishi is also an interesting target, if anyone there will return calls from DCX. MMC and Chrysler have worked together quite a bit, and they do make nice cars in the right class. Collaboration would be no problem for the engineers, even if the execs can’t stand each other any more, and that cool direct injection system could be used.
I have to wonder about Peugeot and Renault. Both have historical linnks with Chrysler, and Peugeot is used to working with other companies. Both produce quite good small cars and both used to sell in the US and do not any more. Of course they are not German so they are clearly inferior, but other than that, if I had my choice of partners around the world, I think it would be Peugeot, because they won’t compete with Chrylser anywhere but Europe.
I should mention that Peugeot incorporates SIMCA and Rootes, which were owned by Chrysler, while Renault owned AMC. I would not be surprised if a lot of the same people were there. But I think at some point a Mercedes-Volkswagen merger is likely, and at that point, they’ll be happier to have Polos sold in the US by Chrysler.
Overall, another “not quite as happy as it should be” moment. Actually competing in the Fit/Yaris space should be a given, but at this point it seems clear they’ll be going the “rebadge” route, and probably personal relationships will take precedence over long-term thinking. It’s a shame.
