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Archive for the 'Post-DCX' Category

Pete DeLorenzo and the Chrysler “Lunacy”

Pete DeLorenzo’s latest rant goes after the “lunacy” of Chrysler’s product plan, which intends to launch an absurd number of new models in the next two years. He argued that the remaining “skeleton crew” of dealerships didn’t even understand how to sell the old ones, and the marketing will be impossible. Creating identities for each brand takes years and billions of dollars, he says (correctly), so the product launch schedule is insane.

Or not.

Aside from Pete’s equally insane idea that Chrysler doesn’t have enough dealerships, and putting aside for the moment the flawed Genesis plan to dilute boundaries between brands by making them all available in the same building, all the time (a poor substitute for Chrysler’s inability to say “no” to dealers demanding the hot new car their sister brand has), there is a possible, rational explanation to Sergio’s strategy (or tactics).

It’s quite possible that Chrysler will monitor sales of all of the new models and then, when the “really new” cars come out (starting in 2012), they will drop the unsuccessful ones. Maybe Sergio is cleverly trying to figure out what will work with customers and what won’t.

I would never have predicted that the “manly” Nitro would flop in the midst of pro-Hummer hysteria (even given its dull interior and performance; the actual Hummers were even duller); nor would I have thought that the Toyota FJ would flop. I would not have predicted that the revised Dakota would sell worse than the unfortunately styled 2008. I did not see the success of the 300C or the tepid sales response to the Challenger (especially since there was tremendous excitement before it was launched.) I also thought the new Sebring and Avenger would be far better received than they were. I liked the mini-Charger styling of the Avenger and the big-Crossfire styling of the Sebring.

Sergio may have had similar thoughts about what would and wouldn’t sell; I’m sure he understands that there’s no really good way to predict future success. Just look at Toyota, whose second Tundra factory lay idle until they found new product for it, and whose revised MR2 and new FJ Cruiser were both flops. (And I wonder how Sequoia is doing.) I’m sure Scion isn’t anywhere near their projections, either.

I think he’s going to flood dealerships with a huge number of vehicles and see which ones the customers go after. Otherwise why renovate the Compass? It isn’t cheap. Maybe he wants to see if the styling or the form factor is the issue.

2012-2014 will show Sergio’s long term strategy.

Pete DeLorenzo didn’t mention anywhere that the new product onslaught is essentially the old product onslaught. All these new models are existing models being refitted to be what they were supposed to be in the first place. They will (I hope) be jettisoning the Mercedes “weighs 6,000 pounds” feel and putting in more of the old-Chrysler feel – the Neon/Intrepid/first-Stratus feel – what you now have to go to Mazda to get. The minivans will return to having luxury-car interiors, like the 1990s vans did (compare a late-90s minivan to a Lincoln Navigator), etc.

That’s my theory, anyway.

Admittedly, the Fiat 500 will confuse technicians and salespeople alike, but frankly, ignorant salespeople are not a Chrysler special feature. Yes, it will be hard for them to understand the nuances of every vehicle, but at this point, they don’t even know who makes them. Twenty years ago salespeople were telling customers that the 2.2 liter engine was designed and made by Mitsubishi, that the Dodge Colt was made in Illinois, and that the Plymouth Sundance was made in Japan. If they couldn’t figure it out when practically every car Chrysler made was some variation of the K-car, the number of cars in the showrooms is irrelevant.

The same goes for branding. I don’t ever recall a time when dealerships really made it clear that there was a difference between a Plymouth, Chrysler, and Dodge. Most of the salesmen didn’t even know the suspension tuning was different in many cases (e.g. Spirit and Acclaim). That was useful information to the customer and salesman alike, but they didn’t care. Their expertise, all too often, was in high pressure sales – getting customers to buy what they neither wanted nor needed at a price that would surprise them if they understood it.

Hopefully the mystery shoppers will start to eject that kind of salesperson and the good ones, who have always been there, who have understood the differences and explained them, will have a chance to shine.

(Note: “gforce2000″ pointed out, “In Canada, the brands have been consolidated into single dealerships for many, many years now. And, Chrysler is doing very well in the Canadian market. I’ve never, ever had an experience at a combined dealer here where the salespeople were confused about brands. And if they are, then get them trained! Peter’s implication that the dealers don’t/won’t know what they’re doing is rather defeatist. They can learn.”)

We’ll find out in two years (maybe sooner) who was right. Just remember, though Chrysler is going to be much more competitive in product by the end of the year, with a raft of new models, most of them will be going away a couple of years later — and that’s when the real long term strategy starts. The new-product launches of the next six months are a short-term action to eliminate reliance on fleet sales and get respect among critics again (though most critics, I think, want Chrysler to just go away instead of refusing to be a stable 2D figure like Honda and BMW). It’s like the Compass, Liberty, and Patriot – two of them are unlikely to be here in three years.

I think Sergio dresses like Steve Jobs for a few reasons – and one of them is, he remembers how everyone said Apple would be dead “next year” for five years. Remember that? Look at Apple today. Wish you’d bought stock in Apple when Michael Dell said the best thing they could do would be to liquidate so the stockholders would at least get “some” of their investment back? So do I.

Let’s see what Chrysler does two years from now before condemning them as lunatics.

»crosslinked«

Don’t believe a word of it!

The Wall Street Journal scooped everyone on the Five Year Plan, or so it seemed. The next day, an automotive news outlet of great repute came out with an equally incorrect but consistent story based on “informed sources.” Finally, someone who certainly knows Auto Task Force insiders came out with another consistent story which would relegate Chrysler to minivans and trucks. It might still be true, but only if you consider the basic platforms – an important part of the vehicle but not necessarily the MOST important part. After all, consider that the Reliant, Daytona, Imperial, and minivan were all based on the same basic platform (they did not have the same platform but they were all based on the same platform).

Here’s our story on the Journal’s story:

According to the Wall Street Journal, which claims access to people who have seen Fiat’s plan for Chrysler, many of the recent rumors regarding current models are incorrect, and Chrysler will incorporate more Fiat Group products than expected.

Vehicles planned for the US, according to the Journal article, include a replacement for the Chrysler Sebring, based on a Fiat design. The PT Cruiser, Sebring, Avenger, Compass, Caliber, and Patriot will all have their final year in 2012, with even the popular Dodge Caravan ducking out; the Chrysler Town & Country will be Chrysler’s sole minivan, according to the article, though historically the Caravan has sold better.  The Nitro will also be dropped.

Marketing for the Fiat 500 is unclear; the article claims it will not use the Fiat name but “will be marketed as the 500.”

Alfa Romeos to be sold in the US starting in 2012 include the MiTo subcompact hatch, a midsized sedan, and the Milano, all to be made in North America. Chrysler will start up a Sebring replacement and compact sedan in 2012 and a compact Fiat-based Jeep in 2013, they say.

To be kept are the Dodge Challenger and Dodge Charger.

Under this plan, Dodge would be strictly muscle cars and trucks, while Chrysler would take over the “Chevrolet – Plymouth – Ford – Toyota” position as the “everycar” brand. No mention was made of plans to move Chrysler upscale, which were announced by the former head of the Chrysler brand shortly before he resigned.

Now, a lot of this is true. What isn’t? The Dodge Grand Caravan will remain, and be redesigned in 2014. The Nitro’s fate is unknown. Liberty will move to a Fiat platform. Fiat 500 will be called the Fiat 500 and will use the Fiat name.  Dodge will get new cars, based on Fiat designs – with one actual Fiat imported without changes (beyond what is needed for sale in the US).  Chrysler will indeed be moving upscale, if not in price then in image.

Above all, the engineering staff is going to be increased. And, while the charts do show numerous Fiat platforms coming to the US, to the point where 50% of Chrysler’s vehicles will be Fiat-based, the charts also differentiate between vehicles made by Fiat and imported “as is,” and those re-engineered by Chrysler to meet their own needs. Whether this is a sheet-metal-and-shock-absorber deal or a true re-engineering, we don’t know. You can build very different cars on a single platform – Audi TT vs Volkswagen Jetta, anyone? Camaro vs G8 or Nova? Mustang vs Ford Fairmont? Belvedere Six vs Hemi Superbird?

The second media outlet claimed that Chrysler and Dodge would disappear outside of North America. It now appears that Chrysler will continue in Asia, and in other markets Chrysler and Lancia will alternate; while Dodge will still be used here and there, sparingly. There is a lot more sharing going on than one would expect.

Oh, and the amount of money going to Fiat… remember all those billions in consulting fees going to Mercedes, for “sharing” their lovely previous-generation-but-still-expensive technologies? Fiat has so far gotten $0.  What’s more, they haven’t shifted everything to Italian suppliers. Mainly, though –

For the first time since Daimler first took over, an increase in the engineering staff was announced.

Wow.<

Maybe it’ll work out after all.


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