HHR and PT: the real deal

Jason Vines’ latest tirade has been directed not at the journalists who can so easily take (much more public) revenge, but at Chrysler’s old hero, Bob Lutz, now over at GM. Lutz, whose remarks have recently taken a turn for the less than purely rational, recently called the new HHR SS “the real deal” compared with the new PT Sunset Boulevard. Lutz has a point in a way - the SS is much more significant a vehicle than the Sunset Boulevard, which is a mere color and trim package. However, until this year, Chrysler has also made a little thing called the PT Cruiser GT each year, which was more than a match for the SS.

As Bill Cawthon pointed out, the PT Cruiser “is seven model years old but is still in the top 15% of American light vehicles by current year-to-date (YTD) sales. It was in the top 11% in 2006.”

Though both vehicles were styled by the personable Bryan Nesbitt, the HHR hasn’t ever been as popular as the PT, nor has it really made much of a splash. Sales are not bad, but the PT still beats out the HHR, even after being severely decontented in 2003 and then again in 2006, with a clearly cheapened interior (albeit accompanied by better soundproofing). Chrysler officials’ frequent downplaying of the PT as a one-trick pony with no future has probably hurt sales as well, especially given GM’s support of the HHR in advertising.

The PT Cruiser was the original and, at least in the first generation, had an interior that matched the exterior; GM had a full opportunity to beat it, and somehow failed. The Chevy HHR could have been bigger and included a V6, occupying a different market niche and addressing critics’ main two PT concerns; instead they copied the PT almost inch for inch. The HHR could have been lighter and nimbler, but it wasn’t, at least not by much. In short, the PT was and remains, for now, the real deal.

That will almost certainly change when Chrysler gets around to dropping the PT, after cheapening and milking it for years, and bad-mouthing it consistently since just after its introduction. (After all, it isn’t a product of Superior German Engineering.) But until then, it’s the Real Deal.

The Chrysler lifetime warranty

Out of nowhere, Chrysler has suddenly established a lifetime powertrain warranty, the likes of which has never been seen before in the industry. This will almost certainly boost sales among those who like what Chrysler makes, but have been afraid of its transmissions and, perhaps, its four cylinder or 2.7 liter engines. The aftermarket may not be as happy, as repair parts will become mostly the province of the dealer (or Mopar, at the supplier level), and go-fast parts may not be as popular when people realize it will void their warranty. Of course none of this applies to those who drive used cars, and since the average car appears to be sold within five or six years anyway, chances are that the lifetime warranty will end up simply matching just about everyone else’s seven-year warranties.

Chrysler might just get a reputation boost from this - what company would start up a lifetime warranty, if they didn’t have darned good quality to begin with?

Here are some details from Chrysler:

At the expiration of the 3 year/36,000 mile Basic Limited Warranty, the original purchaser or retail lessee of each 2006 model year, 2007 model year and 2008 model year Chrysler, Dodge, or Jeep vehicle sold and delivered on or after July 26, 2007 will get a limited powertrain warranty for the lifetime of that original purchaser or retail lessee. Subsequent owners or lessees, even if they are within the same family or business, are not covered. Successor business entities or persons to whom the vehicle is transferred by operation of law are also not covered.

The Lifetime Powertrain Limited Warranty covers the cost of all parts and labor needed to repair a covered powertrain component that is defective in workmanship and materials. There is no coverage for towing.

SRT vehicles, Sprinters, diesel vehicles, Ram Cab/Chassis trucks, rental vehicles, and government vehicles are not covered. Vehicles used as a police vehicle, taxi, limousine, postal delivery vehicle or ambulance are not covered.

To maintain the Lifetime Powertrain Limited Warranty, the person or entity covered by this Powertrain Limited Warranty must have a powertrain inspection performed by an authorized dealer once every 5 years. This inspection will be performed at no charge. The inspection must be made within sixty days of each 5 year anniversary of the in-service date of the vehicle.

Covered parts include:

(Gas engine) cylinder block and all internal parts; cylinder head assemblies; timing case, timing chain, timing belt, gears and sprockets; vibration damper; oil pump; water pump and housing; intake and exhaust manifolds; flywheel with starter ring gear; core plugs; valve covers; oil pan; turbocharger housing and internal parts; turbocharger wastegate actuator; supercharger; serpentine belt tensioner; seals and gaskets for listed components only.

Transmission: transmission case and all internal parts; torque converter; drive/flex plate; transmission range switch; transmission control module; bell housing; oil pan; seals and gaskets for listed components only. Manual transmission clutch parts are NEVER covered.

Front Wheel Drive: transaxle case and all internal parts; axle shaft assemblies; constant velocity joints and boots; differential cover; oil pan; transaxle speed sensors; transaxle solenoid assembly; PRNDL position switch; transaxle electronic controller; torque converter; seals and gaskets for listed components only. Again, manual transmission clutch parts are NOT covered.

All Wheel Drive (AWD): power transfer unit and all internal parts; viscous coupler; axle housing and all internal parts; constant velocity joints and boots; driveshaft and axle shaft assemblies; differential carrier assembly and all internal parts; output ball bearing; output flange; end cover; overrunning clutch; vacuum motor; torque tube; pinion spacer and shim, seals and gaskets for listed components only.

Rear Wheel Drive: rear axle housing and all internal parts; axle shafts; axle shaft bearings; drive shaft assemblies; drive shaft center bearings; universal joints and yokes; seals and gaskets for listed components only.

Four-Wheel Drive (4X4): transfer case and all internal parts; transfer case control module and shift mode motor assembly; axle housing and all internal parts; axle shafts; axle shaft bearings; drive shafts assemblies (front and rear); drive shaft center bearings; universal joints and yokes; disconnect housing assembly; seals and gaskets for the listed components only.

Canada is not covered due to laws in some provinces, according to Chrysler. Mexico is covered but may have different terms.

The Name Game – Brand Equity and Chrysler

Corolla, Civic, Altima, E-class, 3 Series; Everyone knows these names and the vehicles they describe. Why? Simply put, it is brand equity. Start small, and build on it. Keep building on it. Improve each generation, build loyalty to a nameplate and a company.

I don’t know how many generations of Corolla there are, or 3 Series, or Golf. It doesn’t matter. What matters is that these Companies have made continuous improvement to the same nameplate for several generations. The result is brand loyalty, and repeat business, for the nameplate and the company.

Why is this so hard for the domestic manufacturers to understand? By changing your nameplate with every new incarnation of vehicle you suggest that the last one wasn’t worth preserving – ergo, your company makes throwaway vehicles, not built to last, not here for the long haul, not worth being loyal to. This creates a perception of low quality, quick turnover, and a lack of respect for the people purchasing your product. Are these not the same qualities ascribed to the domestic three?

To be fair, the truck divisions of all three have got it, finally we have generational truck lines. Still not so in the car lines, though, with a few exceptions. What does Caliber mean to me, or Compass? Give me a third gen Neon, or a Valiant, or a Fury. I would like to buy something with some history and longevity.

Chrysler and Dodge are finally looking to their heritage to build equity, but so far they are trading on past glory. They need to commit to a long term development of specific vehicles and to stick with it. To show some serious commitment to their own products and history and drop the faddish name changing. It hurts your reputation, and the public perception of your product.

Take the 300 for example. Why ‘C’, when it should be ‘N’. That would make a believer out of me. Why cheapen the 300 nameplate with base 2.7 V6! That’s what killed it the first time around. ‘Banker’s Hot Rod’, was the term, fast, beautiful and expensive. You’ve arrived baby! Revive another name for a lesser car and keep the letter cars exclusive. That is brand equity. The Imperial was Chrysler’s technology leader, and competed with the best in the world, do it again, right this time.

Don’t drop the PT Cruiser, make it better, same with the Pacifica, you were first out with the crossover, brag about it, then go whup the competition’s butt with the next one. Bring back Plymouth, whatever the cost, it’s your bread and butter. Now is your chance to fix perhaps the biggest mistake DaimlerChrysler made and reintroduce Chrysler’s economy brand.

I know people who are on their third Corolla, fourth Civic, and other than the minivans, I can’t think of a single third generation Chrysler product. (trucks excluded) How can you build owner loyalty with a constantly changing nomenclature? It’s a simple answer; pick a name and a product and develop it over time. Stop throwing out the baby with the bathwater!

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.

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

Diluting the brand

The rather vague official definition of Chrysler’s niche - “usable technology instead of technology for its own sake” - led me to wonder what’s driving the brand managers over there. Dodge is big and bold, apparently in styling if in no other way, except for the minivans; and there’s Jeep.

Diluting the brand is one of the biggest causes of failure in automotive history as far as I can tell. Packard died when they reached down; Mercedes lost some credibility with the A Class and 190, and Dieter Zetsche himself is saying they’re going to stop it with the “not Mercedes like” sports cars; Chrysler lost its cachet when it started rebadging Plymouths; Dodge lost its own cachet for the same reason, 30-40 years ago; and Plymouth itself ended up dead when it had nothing unique to offer, which hardly helped a company whose sales were only recently mainly Plymouths.

There’s Nash/Hudson/AMC chasing the sales until there was nothing left to define the brand; Cadillac famously destroying itself overnight with the Cavalier; and Lincoln’s own version, the Taurus Continental. Now Caddy is building itself back up by becoming BMW… and of course BMW realized it had to endure some pain to become the Ultimate Driving Machine, including killing the popular 318 and NOT going into standard performance minivans or SUVs (instead making its performance-enhanced minivan/SUV).

BMW seems to be the only brand that really holds to an image tightly. Everyone else seems to chase the quick buck and the easy sales. Lexus is hardly immune; if they make an SUV that’s obviously different in driving experience from the Toyota version, I haven’t driven it yet. Likewise the IS. And then there’s the Matrix! Totally not Toyota in feel.

One could go on for a quite a while looking at automotive mistakes. You could even say that Plymouth’s competition in racing with Dodge really hurt the brand’s roots… and Mercury died chasing the quick sales of the Tracer. When you can get an Escort with a Mercury badge, nobody will buy a Merc for the prestige. There just isn’t any.

If people really know what you are and what you represent, you might not get all the buyers all the time, but at least you don’t have to do massive incentives because suddenly you’re fighting for attention among all the other formless entities.