Sorting it out

We know there is a replacement for the Grand Cherokee coming to the North Jefferson plant, based on Tom LaSorda’s statements. This should really be no surprise. It is planned to be lighter than the current model, also no surprise, given gas mileage issues and the reason why the current model is as heavy as it is (rumor has it the Mercedes people demanded changes based on their own needs). This vehicle will most likely end up being worked over and produced as a Mercedes, as the current one is.

Most likely some other vehicle will be built with it á la Nitro/Liberty. Prime candidates are the Aspen and/or the Commander. Maybe the Durango… it all depends how they want to play it. If the Grand Cherokee is the luxury version, a companion Dodge would make more sense than a companion Chrysler. On the other hand the Commander could be the true-luxury version, and the Grand Cherokee the sortakinda Oldsmobile version. They could also make a “lifestyle Dakota” from this.

Small cars… are a big open question. I suspect Chrysler has numerous paths under way and is trying to figure out which will work. There are two pacts in China, one with Chery and one with Great Wall, which might come to nothing or be the next small Chrysler, replacing the Horizon. There is the possibility of using the Fiat 500 chassis, and there is the thought that maybe engineers from Chrysler have been working on their own A-class car and that no matter who builds it, it is still coming from the plans that started to be drawn up last year or the year before. And then there’s the B-car, coming from the future Nissan Cube… and to confuse matters, the Nissan Versa spinoff to replace the Hyundai Atoz.

D-class (Sebring/Avenger) cars are coming, and I believe that they will be sourced from Chrysler, especially since they seem to be planning a whole series of vehicles at long last (the same plans were apparently made for numerous other projects). They’d want to keep control in-house if they were making sedans, coupes, hatchbacks, minivans, and crossovers all from the same source.

Hanging over all these future projects is the question of model cuts. It would not be insane to think that maybe the Durango and Aspen and Nitro will all be allowed to die. The Liberty may not even be needed, if the Grand Cherokee replacement can be built in two varieties - think Cherokee and Grand Cherokee. The old Jeep used to do things like that. I don’t know if the Liberty has a real following, but I doubt the Nitro does.

By the way, I’d appreciate it if your comments focused on what is likely to happen, not what you’d like to happen. You know my opinion, but here it is again:

Dodge - muscle cars (Challenger/Charger), Ram, Dakota, Caravan (sporty suspension tuning).
Chrysler - 300C, extended-wheelbase 300C (”New Yorker”), true-luxury T&C.
Plymouth - small crossover (”PT Cruiser”?), small cars, low-end, V6-only big car.

Inventories still swollen

Though the Big Three have tried to cut back their inventories, a sudden economic squeeze (one could argue that through reckless spending and poor investment choices, it’s been building for years) has thrown sales off kilter, sabotaging efforts in an industry with long lead times. GM, Ford, and Chrysler would probably much rather be able to slash truck production right now; but contracts and other arrangements don’t allow for such sudden movements.

Chrysler remains one of the worst off in stockpiling; the Jeep Wrangler was very hot, and suddenly demand disappeared, leaving Jeep with the fifth highest inventory in the industry (according to Automotive News, as are all other figures cited here). Of mainstream brands, only GMC is worse, by a single day of supply. But Jeep’s average 106 days’ supply is nothing compared with the stock of pickups. There are 107,700 Rams floating around out there, good enough to support Chrysler for 160 days should they stop production right now. That’s a worry with the 2009s coming soon, but Ford and GM have their own troubles. The Silverado is in relatively good shape - more are out there but sales are higher so the total supply is just 117 days. The F-series has 215,000 copies out there - a 133 day supply. Toyota’s Tundra is not reported separately but Toyota trucks overall have just a 100 day supply - and there are 225,000 of them on lots.

Chrysler’s biggest “days’ supply” problems, aside from Rams, come from vehicles with relatively low stockpiles - the Pacifica (5,100 for around 400 days’ worth), Crossfire (1,300 of them), Nitro (15,400), and Aspen (8,600). The minivans are interesting to see - the Dodge version has a 42-day supply, the Chrysler a 96-day supply, as the market apparently changed gears suddenly and decided it wanted the Dodge. I suspect this is due to the perception that the Dodge is cheaper.

The LX cars are looking surprisingly good in days’ supply, other than the 300. Likewise, there’s just a month’s worth of PTs out there as production was switched to the Journey, which with 71 days’ supply, is no longer looking as though it has the bright future execs clearly assumed it would - it was meant to be Chrysler’s European entry vehicle, but unless the diesel-AMT version is much cooler than the gas-automatic version, it doesn’t look as though it’ll gain the traction it needs to justify dedicating Toluca to it. At this point, Chrysler would be better served by putting the minivan captains’ chairs back into the PT, putting the old air dam back on, and trying to get people to desire it more - again. (Throwing that 180 hp engine around more wouldn’t hurt, either.)

As for Jeep, it’s bad news everywhere but for the Patriot, which is probably benefitting from gas prices and financial squeezes. The Commander could stop production now and still last for around six months, the Grand Cherokee could go on for three months, and the Liberty and Wrangler are both at around 130 days’ supply. We don’t know if the Wrangler-based pickup will be pushed forward, because they need to do something with that assembly line, or whether it will be dropped as the manual transmissions are reportedly being dropped (according to the jk forums), to save money.

Daimler put their emphasis on the Chrysler brand, positioning it rather like Chevrolet, Ford, or Toyota. That appears now to have been a mistake. If I were to operate without market research, I’d say that Chrysler is probably positioned in most people’s minds in one of two ways: as a troubled automaker that was bailed out repeatedly and changed hands like Jeep, or as a formerly upmarket brand that never quite made it into luxury. Dodge appears to have a more solid rep as the everyman brand. Daimler’s attempts to essentially rename Plymouth have, I think, failed dismally. They would have been better off dropping Chrysler than dropping Plymouth, because if Plymouth did not have much in the way of connotations for the average younger buyer - or many older buyers - at least it did not have a lot of the negative baggage of Chrysler. (Also, it would make our job easier, because we could refer to “Chryslers” as “Dodge, Jeep, and Plymouth” without confusing people with the brand.)

Yes, I say it’s time for Plymouth to return. I know it’s expensive. I know it means sacrifice (though some more investment from the people who have more money than they could EVER spend would be helpful about now. Talk about patriotism is cheap - put your money where your mouths are, Steve and Bob.) But this is the time for down-to-earth, sold, frugal, and value-based auto investment by the average buyer, and that’s what Plymouth has always stood for.

Just a quick link today…

I ran across this while checking incoming links, and I was impressed by the clarity of thought and the punchiness of the entry… coming from a person whose expertise is in branding. It’s just a little dated (from February) but I suspect you haven’t run across it yet:

http://brandlandusa.blogspot.com/2008/02/down-road-for-chrysler-plymouth-dealers.html

Resurrecting Plymouth

The acquisition of Chrysler by Cerberus offers a golden opportunity for the resurrection of Plymouth. But in order for the resurrection to succeed, it is important to understand the reason for the division’s death. Plymouth ceased to exist as a genuinely distinct entity many years before Daimler-Chrysler made its death official. Plymouths had become nothing more than Dodges wearing different badges and a few minor, essentially cosmetic differences. Anyone who wanted a Plymouth could get essentially exactly the same vehicle by buying a Dodge instead.

Contrast that with the situation my parents saw when they bought the car I grew up with in 1968. Back then, a person could go to a Dodge dealer and to a Plymouth dealer and see two clearly different (albeit closely related) lines of cars. The Plymouth Belvedere my parents bought had different sheet metal from a Dodge Coronet, was very slightly shorter and less spacious, and cost a little less. The existence of both Dodge and Plymouth gave customers a real, meaningful additional variety of choices.

If Cerberus wants to revive Plymouth, and I very much hope they do, they need to do far more than just put Plymouth badges on Dodges. They need to take advantage of Chrysler˙s advanced, flexible manufacturing technology to make Plymouths different from Dodges in much the same way that new-generation Chryslers and Dodges are different from each other, and that the Jeep Patriot, Jeep Compass, and Dodge Caliber are different from each other. Then Plymouth can genuinely add something to Chrysler˙s offerings instead of just giving customers a chance to buy the same thing with a different nameplate and grille. People can go into a Chrysler-Plymouth dealer, look at the Chryslers and at the Plymouths, and see genuinely different cars.

Further, Plymouth could go back to offering a full line of cars, from small to full sized, without creating a problem that the Plymouths and Chryslers appear almost identical. The Plymouths wouldn˙t just be a cheaper trim line of essentially the same cars as the Chryslers. They would be distinct cars, with different styling and personalities.

So what could a resurrected Plymouth offer? There are two basic directions that Plymouth could go and offer something clearly distinctive.

One direction would be to offer styling that is more conventional and less aggressive than what Dodge generally offers. Dodge would be the division that pushes the styling envelope in order to pursue customers who want a car that looks different, while Plymouth would appeal to customers who are less fond of Dodge’s aggressive styling and are unwilling or unable to pay the cost of a Chrysler. Granted, that image is not necessarily what die-hard fans of the old Plymouth muscle cars would really prefer. But it would be a good way to use a resurrected Plymouth brand to reach customers who are choosing to buy from other automakers instead of buying Dodges.

Another possibility would be to take advantage of Plymouth˙s death and resurrection as an opportunity to offer an entire line of cars with a unique styling flavor all their own. For example, Plymouth could offer a line of cars that mix “retro” elements into their styling, not necessarily to the same degree as the PT Cruiser, but enough to make Plymouths clearly distinctive. If such a strategy would succeed, it could bring in large numbers of customers who would not have bought a Dodge or a Chrysler. And no one could possibly claim that the Chryslers and Plymouths in a Chrysler-Plymouth showroom are essentially just different trim levels of the same car.

Either of these approaches would do far more than just bring back the Plymouth name. It would give Plymouth a clear reason for its existence, making Plymouths distinctive cars again instead of just Dodges wearing different nameplates.

Bringing back Plymouth as a clearly distinct line of cars is almost certainly the best chance Cerberus has of expanding Chrysler˙s market share. Chrysler would get the best of both worlds: an established brand with some loyal customers and a long history behind it, coupled with an opportunity to offer customers a wider variety of choices than they do now. If the strategy is executed properly, the death and resurrection of Plymouth could ultimately make the Plymouth brand much stronger than it was at the time of its demise.

Just a quick link…

I couldn’t resist posting this:

http://brandlandusa.blogspot.com/2008/02/down-road-for-chrysler-plymouth-dealers.html

It’s a pretty interesting page, and it takes a historical perspective I haven’t often seen outside of Allpar.

Getting Chrysler back on its feet

Nearly ten years of Daimler ownership have taken their toll on Chrysler. The 2.0 liter engine was allowed to age and be replaced by powerplants that are far too peaky for the average driver; cars were given odd combinations of far-too-expensive and far-too-cheap materials and designs; and, overall, there have been few real winners in the lineup since 1998, the two big exceptions being the current Wrangler and the 2001 PT Cruiser (some throw in the 300C as well, though as a whole the LX does not seem to have sold as well, or made as many profits as, the LH line had.) Now, yet more factories are slated for closure and shifts at surviving factories are being eliminated. What can be, and what is being, done? Or, to be more precise:

1. What can be done within one year to make the lineup work?
2. What needs to be done so the lineup will work in 2011?

These are very different questions. With regard to product alone, I suggest:

Here’s what Chrysler is doing do for #1:
1) Use the GM hybrid in trucks, SUVs, etc.
2) Dodge Journey, otherwise known as the “we’re betting a lot on this thing being popular” truck
3) Higher pressure turbo detuned to 270 hp for Sebring and Avenger to replace the 3.5 V6?
4) Higher quality through empowered teams (see Allpar article)

Here’s what they COULD do for #1:

1) Interior tweaks including better seats.
2) Special editions, etc.
3) Retuning of the World Engine.
4) Light pressure turbo or supercharger for the World Engine to make it more desirable

Here’s what Chrysler IS doing for #2:
1) LY series replacing LX series; possible AMT.
2) Truck aerodynamics and other key elements being reworked.
3) AMT/dual-clutch for minivans!! Gas mileage + performance + smoother operation!
4) Phoenix engines!! Gas mileage + performance!
5) Aerodynamics taking front stage
6) Going back to the early 1990s “involve suppliers early” on interior components; see Allpar articles
7) Higher quality through empowered teams (see Allpar article)
8) Horizon/Omni replacement (from China)
9) Rams with Avalanche style bed storage, new Cummins diesel in 1500
10) Dakota re-engineered as a lifestyle vehicle rather than as the heaviest duty mid-sized pickup; optional Cummins diesel
11) Durango based on lighter next-generation Grand Cherokee

Here’s what they COULD do, which would in my opinion fix the main problems of their bread and butter vehicles (aside from the steps mentioned earlier):

1) Engineer a Neon replacement and PT Cruiser replacement off a heavily modified Caliber platform using a PT-like suspension front and rear to save money and increase space utilization
2) Revisit pre-Daimler LX work; downsize slightly and replace Avenger/Sebring with larger FWD cars (may not be practical)
3) Replace the World Engine either with a more evolved version of the old 2.0/2.4, or with something based off the Hemi or Phoenix engine
4) Extended-wheelbase Commander
5) Scrambler (Wrangler pickup)
6) As the AMT takes over, put the six-speed automatic into cars that had the four-speed automatic

Of course there are more possibilities, and none of us have the warranty information, profitability figures, or other data that the execs have. We don’t know, for example, whether the LX really was more profitable than the LH, though I highly doubt that it could have been. We don’t know what actually customers wanted versus what dealers ordered versus what the factory incentivized into being. There are all sorts of administrative issues that are of key importance, including advertising and marketing, media relations, supplier involvement, quality enhancement, labor issues, production methods, tooling (Toyota drastically cut costs with new stamping presses that allow for lower roofs, less noise, and much lower energy usage, for example), CATIA (where Chrysler has long been a leader), emissions and fuel use, international sale, dealer relations, service capabilities, customer alienation prevention, customer loyalization (BMW excels at that), and more. The list of key issues goes on and on and on.

Fortunately, it’s not just Nardelli calling the shots out there. We hope the team gets it right this time. It’s a very hard job; journalists want one thing, normal buyers want another, and then there are the conflicting demands of Chrysler loyalists, other-brand loyalists (some of whom will never, ever, ever, ever buy a Chrysler, no matter what), and the on-the-fence crowd. There are alienated customers to be re-attracted on a constant basis through customer recovery - something not yet attempted at Chrysler, as far as I know - and there is much to be done before any dealings with a dealer or with the company, particularly the zone reps, convinces buyers that they really should have gotten a Toyota or a Chevrolet or what-have-you. There is Chrysler’s horrific image for quality to be dispensed with, and there is the constant question of Plymouth and an entry-level budget brand which could be more recession-proof than the Dodge, Chrysler, and Jeep brands are. On a higher level there are strategic questions of niche sales vs mass market sales; Chrysler is all but out of the car mass market now, but they could make it back in if their other ducks were in order.

Chrysler has a rough road ahead. I, for one, hope that their recent cost cutting moves were intended to give them some shock absorbers as they move into the future. At least in 2012, the V6 and V8 powertrains should be second to none.