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AN: Does Marchionne grasp lessons of GM-PSA?

Discussion in 'Mopar News and Rumors' started by aldo90731, Mar 13, 2017.

  1. Dave Z

    Dave Z It's me, Dave Staff Member Supporter

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    Curtis Redgap wrote about how this happened in the 1960s. Chrysler demanded Dodge and DeSoto cars and got them. Plymouth demanded Dodge cars and got them. Dodge demanded Plymouth, DeSoto, and Chrysler cars, and got them. By 1977, every car was available as a Dodge. There was no more point in having Plymouth or Chrysler. DeSoto got crushed along the way. The Chrysler brand leaders today are dealing with that squandering of resources.

    Chrysler never had any luck moving upscale. They got fine critical reviews but no sales, whether they called the car Imperial, Chrysler, or 300x. I suspect it's because they didn't do a separate dealer channel. Pairing with Plymouth really Chrysler down to a specific price class.
     
    npaladin2000, Ian, somber and 2 others like this.
  2. aldo90731

    aldo90731 Active Member Level III Supporter

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    A brand positioning becomes anchored in the market within a few years. Once it's anchored in that position, it is almost impossible to move it up. But, like Packard, it is possible to move it down.

    Toyota for instance became anchored selling compacts and was able to move up to midsize cars, but struggled to sell larger Cressidas or anything more expensive. Same thing with pickups: Toyota has no trouble selling Tacomas, but it struggles selling Tundras.

    Despite some magnificent Chrysler Imperials early on, for better or worse Chrysler became anchored where it is now: around Buick --and Oldsmobile. And despite having done all kinds of crazy things with the brand over the years, to this day Chrysler gets credit for building large, powerful, near-luxury automobiles. But besides the difficulty moving up, today's luxury is defined by Germany. Chryslers have been as American as apple pie. For Chrysler to attempt a luxury assault it would need to first identify an American interpretation of luxury. Otherwise, it would be doing what Cadillac does: try to beat the Germans at their own game, and that's a no-win proposition.

    Right now, the best, best interpretation of American luxury is the full-size pickup. The Ram 1500 Laramie cost more than a Mercedes E-Class, sells in good numbers and makes a handsome profit.
     
    Last edited: Mar 20, 2017
    somber likes this.
  3. danbek

    danbek Member

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    They won't sell in number, just like Genesis doesn't sell in number but are now on their own. Time will tell if reward was worth the risk...
     
  4. aldo90731

    aldo90731 Active Member Level III Supporter

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    Genesis has the added burden of being now a separate luxury brand...without having done anything prestigious to deserve the title.

    It is Imperial 2.0 without a track record.
     
    danbek likes this.
  5. DAGAR

    DAGAR Member

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    I understand you're emotional response, but there's only one FCA. All brands are inter tangled and mutually dependent. Alfa and Maserati success will make it MORE LIKELY that the Chrysler and Dodge brands get new models.
     
    Prabhjot, freshforged and ScramFan like this.
  6. aldo90731

    aldo90731 Active Member Level III Supporter

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    The catch in that is that Alfa's success is far from a done deal.

    As FCA's track record continues to fill with failed efforts and missed opportunities, the thought of Chrysler and Dodge's future hanging on the success of the Alfa experiment is understandably unsettling.
     
    Last edited: Mar 23, 2017
    jimboy and valiant67 like this.
  7. Erik Latranyi

    Erik Latranyi Well-Known Member Level III Supporter

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    Maserati is not setting the US market on fire. The Levante helped make 2016 reverse the decline that took place in 2015, but volume has not exceeded 2014's high-point. Maybe 2017 will be the year, but is it sustainable? That is always the big question and one that will hang over Alfa for a few years.

    Adding models to the lineup, resulting in sales increases is not the same as sales increases with the steady lineup.
     
    jimboy, aldo90731 and Ian like this.
  8. Adventurer55

    Adventurer55 Member

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    Hence the reason for the Wagoneer/Grand Wagoneer. They have a good riding, I'll call it chassis in which to build upon. It has good off road chops which when it becomes a Jeep will probably be enhanced further. And much needed profits will come with it. This vehicle in either Jeep or Dodge form should've been here 20 years ago. IMHO.
     
  9. Erik Latranyi

    Erik Latranyi Well-Known Member Level III Supporter

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    Do not get your hopes up about those profits. Wagoneer/Grand Wagoneer may sell 20,000 to 50,000 (optimistic) per year. Even if they make $10K each (doubtful) that only generates $500K in profit. That is nothing to sneeze at or walk away from, but not some magic bullet that transforms the company into a profit generating powerhouse.
     
    aldo90731 likes this.
  10. Adventurer55

    Adventurer55 Member

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    At least it won't lose money, and it helps spread the cost of the platform. That's how we got the original Ramcharger.
     
  11. Erik Latranyi

    Erik Latranyi Well-Known Member Level III Supporter

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    If they build it on the new Ram platform, yes, it will be a nearly "free" platform, given the volume from the pickups.

    However, that does not guarantee success as the large SUV segment is one of the most difficult to penetrate. Ford has been trying to get a piece of GM's dominance for decades without much luck. Large SUVs/CUVs from Toyota and others have not been successful, so this is not an easy market even with the Jeep name.
     
  12. Adventurer55

    Adventurer55 Member

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    Success is what they make it. If it's done right, and marketed correctly, tying it into the classic GW, I think they will sell more then they think. I have people literally coming up to me wanting to buy my Commander because they want a large Jeep. Now think about that for a second, the Commander was far from perfect, too narrow, interior while functional and durable was much maligned. I love it and it sold well for what it was. Imagine if it was done right. The Ram 1500 driveline is pretty much what my Commander is except for the 8 speed and a bit different rear suspension setup. Yes it's bof and mine's not, but the important goodies are all there. Who knows maybe with an improved Hemi under the hood.
     
    danbek and MPE426HEMI like this.
  13. GasAxe

    GasAxe Active Member

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    I gotta say, after all the data and arguments against the economic viability of building a Ram based SUV, I am still pretty suspicious of the news of the Wagoneer riding on a Ram chassis. I'm cynical enough to believe that the info was leaked to quiet some of the growing unrest about FCA's overall performance.
     
  14. Erik Latranyi

    Erik Latranyi Well-Known Member Level III Supporter

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    I can tell you that if they do not buld the Wagoneer/Grand Wagoneer as BOF using the new Ram platform, that many, many people will be disappointed.

    Not only that, but given the number of affirmative statements by Marchionne and Manley, they would forever be branded untrustworthy in their comments.
     
  15. Prabhjot

    Prabhjot Member

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    It shouldn't be since (a) vice versa is true too (b) but alfa is global, unlike usa only (and imo entirely unviable for all new models, retooled factory etc) Chrysler ex-minivan and dodge. The evidence is completely one way: the c200 was an epic missed opportunity, in that they should never have invested in that segment, or if they did, they should've taken it to China, since it is clear that hardly anyone in the usa craves a Chrysler badged fwd sedan.

    Most of their other efforts have been quite successful, actually: jeep new models, global plants and globalisation, allnew plus refreshed fiats in Europe and LatAm, new maseratis globally, the superb engineering and design on the new alfa-s, Rams, fiat uv-s, dodge huge marketing based brand turnaround and 'authenticity'-imbuing.

    And the very correct and sound decision to postpone allnew say dodges and say grand Cherokee or say the c300 or say the journey since sales have been, despite this, so good, and the market's fast moving away from sedans in the usa, some of these potential allnew would've been most likely to lose money like the c200 did ( not enough scale to justify investments etc.) Those models will arrive at some point soon enough, IF the firm can get through a potential usa auto market downturn unscathed, which to be fair: is pretty likely, given fca's superb record at always beating its guidances and promises to.....those who count, namely investors, bankers.