If you build it we will buy it!

Wow who would have known or thought that a 4-door Wrangler would sell?

According to the Toledo-Blade the new Wrangler, both the 2-door and the 4-door Unlimited have found success in the market place. Here are some numbers:

The North Toledo plant, which produces the Wrangler, has 59,000 pending orders from customers and dealers. Most of the orders are for the 4-door version. Last year the Wrangler (which was found only in a 2-door version) sold roughly 75,000 units. Therefore these orders represent close to three quarters of the total sales of last years Wrangler. I think it is safe to say that the Chrysler Group has another hot hit on their hands. And due to the high demand for the Unlimiteds customers who have yet ordered theirs already have to wait, according to the article, until next year to buy a new Unlimited.

Dave Doster who is a manger at a dealership, who was quoted by the Toledo-Blade stated “They definitely have a high demand…They’ve done such a great job with it.”

To help meet the demand workers are scheduled to build Wranglers on an added Sunday shifts that are uncommon to the plant.

According to the Toledo-Blade last month, Toledo Jeep built 6,194 Wrangler Unlimiteds and 4,124 traditional 2-door Wranglers. That is is total of 10,318 units. This is an increase of 14% relative to the same month last year when the plant built 9,082 Wranglers.

So this should be a nice sign to the Chrysler Group, if you build it they will come. How many years have I waited for a 4-door Wrangler? Well, since I grew out of my YJ and I knew that my family would not be fitting (or be okay with it) in a traditional 2-door.

The Chrysler Group should have also struck while the iron was hot with a production version of their sweet Gladiator concept. However the high demand for the Unlimited should be a sign that the perfect vehicle, whether that is a 4-door Wrangler or a production Gladiator, is well worth the wait.

The Chrysler Group should listen to their base! This should show them that if they build it we will buy it!

Could there be a rational reason for the sales bank?

Bill wrote:

I’ve been thinking about CG’s continued production of vehicles that have nowhere to go other than storage lots.

Now that the auto companies have farmed out so much of their component and sub-assembly production to outside contractors, the auto makers may not have as much ability to control their production output as we may think.

Is it possible that the contracts that CG has with component suppliers require CG to accept everything the suppliers can deliver up to the limits for which CG had originally contracted?

If so, perhaps it does make sense for CG to go ahead and use those components to produce unassigned vehicles. (If the parts and labor have to be paid for even if the plant was idle, it may actually be less expensive to rent storage lots for the unassigned vehicles than to come up with warehouse space to store unused components.)

That’s something to think about.

Unfortunately we also have executive-speak which makes it seem as though Joe E. is more along the lines of “useless brown-noser” than “clever but pushed into a bad spot.” To wit:

Detroit News quoted Eberhart as saying Chrysler was trying to get “its unaccounted for unsold inventory ‘down toward zero’ in the next several weeks.”

To clarify, he means the inventory that he was pretending didn’t exist, not the massive parking lots filled with officially accounted for sales bank vehicles.

“Eberhardt also said dealer inventory was in the low 500,000s, consistent with the automaker’s year-end goal.”

Who sets these goals? Their ambition seems low. Bob noted “15,000,000 vehicle sales total for the industry/12 months (I am simplifing here) = 1,2500,000 total industry build x 12% market share = 150,000 vehicles. 500K sounds way high to me…..especially since winter is death to car sales usually.”

“I expect the market to be about the same level it was this year,” he said. I’m sure Chrysler’s economists are much more concerned about next year’s market than Joe is, especially with oil apparently about to rise again. Also, the market may stay in the same place, but Chrysler’s customers seem to be going elsewhere, and Toyota and other Asian automakers keep adding new North American factories; and then there’s China. But that’s okay according to Joe-logic because the market will be in the same place and they only have 500,000 vehicles. You know, just three or four months’ worth. Busily rusting in massive parking lots wherever you can find open space in Michigan and Ohio.

Happy Thanksgiving!

Hello Allpar Weblog readers! I just wanted to take the opportunity to wish those of us in the US a happy Thanksgiving, and to everyone else a happy Thursday :)

I know I’ve got a lot, large and small, to be thankful for, starting with my wonderful Wife, a roof over my head, a job, health….and of course Allpar and the wonderful folks in all the forums I frequent.

Cheers!

Stacking up cars like cordwood

Normally, I think Peter DeLorenzo’s ego is far beyond his actual blog quality; but this time, he’s hit the nail on the head. Required reading, I’d say.

http://www.autoextremist.com/page2.shtml#Rant

NASCAR - Chasin’ the racin’ or race chase or what??

It seems that NASCAR has created itself a situation that it struggling with to correct. The fiddling around with the point system was one thing, however, the concept of the “chase to the race” or the race chase, or whatever the catch phrase is has become a yawner. I, for one, never was able to grasp the “chase” concept as it related to the races themselves or the teams and drivers. However, if you look at it from a marketing standpoint in that it was trying to sell itself as a sort of “play off” situation to dress itself in the suit of a major sporting event, then well, maybe it is like that effort. Then, yes, in a mistaken belief that in all things, “if you build it, they will come,” someone got NASCAR to believe that the chase concept would generate more revenue and appeal to a larger audience. Translated, that means more money, TV ad time, associated licensing agreements for NASCAR labeled endorsement deals and labeling of all things sold with NASCAR on it. The 2004 chase was interesting because it was like everyone trying to sort it all out, while managing the point system, which is a left over from the Winston program that got NASCAR from it’s county fair racing roots to the big time of the Daytona, Talledaga race tracks, knocking out much of any race on dirt or less than 200 miles. I can’t blame NASCAR in wanting to create some excitement for itself. The old time concept of rooting for your favorite driver because he is driving your favorite make of car has long gone by the wayside. Without a program you can’t tell one NASCAR race car from another. Even the commentators don’t identify the cars by brand any more. It is the “Tide” car or the “Lowe’s” car or the “Home Depot” car. The newest item, by the way, “The Car Of Tomorrow” is also ginning itself up as the answer to a lot of things that, really, no one has been asking. In actuality, the COTY is little more than a “formula” vehicle that NASCAR has been quietly, but resolutely pushing for many years. In the past, they sold the idea off as “parity.” If it wasn’t for the participation of the various manufacturers, NASCAR could just as well as had it’s formula vehicle a few years back. Certainly, when it consistently wrote rules barring Chrysler from participation in a form of punishment for Chrysler’s 1965 boycott, it shows that “formula” is akin to “parity” only when it pertains to what NASCAR says it is. For many years after Chrysler stopped it’s racing program, leaving Richard Petty out in the cold, NASCAR wrote rules to allow the “KING” to continue to race his older model Charger. When the 1978 model Mirada failed to be a good racer, Chrysler was gone. Efforts at getting back to racing witht he LeBaron car were consistently barred by NASCAR, even in the face of a decent ARCA model that did well. It took a lot of money to get Dodge back on the track, much going to NASCAR for licensing amoung many other items. So now, NASCAR in an effort to out do major sporting events, such as the World Series or the Super Bowl, invented the Chase. Ho Hum. Last year wasn’t that big a deal, with Champion Tony Stewart leading the points, and he should have won anyway. This year, it is a bit more exciting only because the concept of being in the “chase” has been torn up by the same Tony Stewart, blowing the chasers away with his wins, from a position whereby he can’t get the championship this year because he didn’t make the points for the last 10 races. Go figure. However, it is the TV networks that are reporting the situation now within the chase concept. It has been like a fad, and is fading, leveling off, in fact, losing market share. Could be compared to the Texas Hold’em thing. Currently, the nine 2006 chase races has garnered about a 4.1 share, which is significantly lower than the 4.7 share in 2005. That was a little bit higher than the 4.6 share in the first year of the chase in 2004. Which BTW is lower than the last 10 races of the 2003 season when there was no chase. Currently, the big Networks are reporting a drop from 8.6 share to a 5.3 share. OUCH! While the cable networks down 15% at 4.1. What does it all mean? Just that, perhaps, the chase was meant to raise excitement like the buildup to the playoffs in the NFL, but, it isn’t the NFL. Even the Super Bowl doesn’t do all that well for those folks whose team ins’t playing. Trying to make NASCAR seem like a major sporting event just doesn’t raise to the occasion in some way, where you could compare it to the World Series. It just isn’t. So, unless NASCAR can come up with some way to spread the “parity” deal across the point system, making everyone equal in competition even unto the last race of the season, like it sort of used to do, the chase is a yawn, and the NFL has nothing to worry about.

Set Chrysler free!

Rumors are flying about DaimlerChrysler, AG finally letting Chrysler Group go. While some speculate that they’d keep Dodge trucks and Jeep, I don’t think that’s what will happen.

The best thing for DaimlerChrysler would be to take Chrysler Group public as Chrysler Corporation or a less confusing name, such as American Motors (AMC), which was swallowed by Chrysler some time ago. (The advantage of not using Chrysler Corporation is ending the confusion over Chrysler brand vs Chrysler the corporate entity). The new corporation would be incorporated in Auburn Hills, Michigan, and DaimlerChrysler, AG, would retain 49.9% of the stock.

Here are some of the advantages of this arrangement for DaimlerChrysler.

First, the size of the company and its location in the US would force most American indexed mutual funds to buy the stock, instantly giving a huge boost to the stock price and raising the overall capitalization of DaimlerChrysler.

Second, the German stock buyers who, for some reason, hate Chrysler Group would start valuing DCX more highly, ending Chrysler Group’s claimed negative equity of $10 billion.

Third, once the US company was indexed and its stock had gone up, DCX could sell off more Chrysler stock while still remaining majority shareholder and retaining effective control. This could be an excellent way to raise capital and pretend to be earning money.

Fourth, Mercedes would still be able to siphon off billions of dollars from Chrysler in the form of mandatory consulting fees and royalties, while benefitting from Chrysler’s low-cost (compared to Mercedes) engineering excellence, economies of scale, and expertise in flexible manufacturing and larger vehicles.

Fifth, Chrysler Corporation or AMC or whatever it was called could claim to be an American company, which I think would help them quite a bit in the heartland, the South, and in the police markets (the cost of doing this is more than the police Charger is worth, on its own). The German-engineering campaign has failed dismally, with sales dropping every time the ads run. (This wouldn’t work if they kept Daimler in the name.) Unfortunately, for this to work, the brown-nosers extraordinaire in the executive suites would have to get some pride in their own country (where this is the US or Canada) and not be such incredible suckups that they think calling the new corporation DaimlerChrysler, Inc. is a great idea.

Sixth, there would be a huge morale boost among most of the owners and employees - at least, I think there would be. I know there are some people on the forums who really believe Mercedes has been great for Chrysler, even among those who realize the Hemi came from Auburn Hills, not Stuttgart. But as far as I can tell, the vast majority of people DO want Chrysler to be independent; they just don’t want it to be tossed out on the street with no assets, and they would like to be able to tap into Mercedes’ parts bins when needed. This is definitely possible and likely with a spinoff that is still majority Mercedes owned.

This would not entail changing anything about how the vehicles are engineered or built. We would not lose ESP, the five-speed rear-drive car automatic, VVT, or any of the other post-acquisition technologies. However, we would, I think, gain quite a bit of credibility, visible pride, and money. The Daimler would be gone from outside the factories at long last; the Chrysler media web site would not require a trip to DaimlerChrysler’s Mercedes-obsessed mediasite; and journalists would no longer continually point out that Dodge is German. The stage would also be set for more independence as time went on, or at least a more equal relationship.

Let’s hope that’s what the Daimler people are considering now - and that they go whole hog and do it right, instead of setting up another German-owned LLC or separating Chrysler and Dodge’s cars from Jeep and Dodge trucks, or creating a new subsidiary corporation in Germany, or a new corporation in America named DaimlerChrysler, or, worst of all, selling Chrysler to a Chinese company.