August 11th, 2010 • by David Zatz
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.
