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Conference call: Ram, profits, quality

by David Zatz on

News unearthed from the Chrysler financial conference call today, in addition to notes posted earlier:

  • The Wrangler plant is at capacity with two shifts. The Pentastar V6 will be added to Wrangler next year, and the new 2.8 liter diesel for export markets is selling well.
  • Net revenue per unit is up $2,800 from Q2 though average sales price is down $100.
  • Around 7% of Chrysler sales are leases, compared with an industry average of 18%.
  • The Dodge Avenger will be the first car to be based on the new C/D wide architecture; it will be made starting in late 2011 and sold starting in early 2012.
  • Chrysler has planned for model changeovers; by the time the 2011s arrive, there will be few 2010s in inventory.
  • Sergio Marchionne commented on the recent “tell all” book on the government bailouts; he said that, after being part of the process, he did not recognize some of the people in the book, but the book was accurate in the amount of “gut-wrenching analysis” involved. The book, he observed, did a “huge disservice to the people who were at the table,” glossing over their sacrifices; he found the slams against Chrysler to be “particularly offensive” — “To brush the whole organization with the same level of incompetence [as one or two leaders] is unfair…I object to the unfairness.”
  • Sergio noted that Ram has underperformed GM and Ford in sales though the powertrain is at least “on par” with the others. GM and Ford are spending “substantial amounts of marketing dollars” to support their sales, which is a strategic challenge; Ram has great technical strength. Ram is working on both technical solutions and commercial initiatives to “rectify this imbalance” and increase Ram sales without slashing prices. The Ram Longhorn named “truck of Texas” was a major accomplishment, given that the award has often been given to another brand.

Sergio Marchionne reiterated that Chrysler does not need a captive finance arm (such as GMAC or the former Chrysler Financial). However, additional sources of financing may be needed to deal with specific market segments. “Overall, we’re satisfied with the array of solutions that we have, and I don’t think this is going to be an impediment.”

He also pointed out that the Consumer Reports quality ratings were based on historical data and were not reflective of the current products made by Chrysler.

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