JEREMY CATO
VANCOUVER — Globe and Mail Update Published on Thursday, Jun. 23, 2005 11:55AM EDT Last updated on Tuesday, Apr. 07, 2009 10:27PM EDT
Mark Norman, president of DaimlerChrysler Canada, is smiling, but he's clearly annoyed by my question: Chrysler is a one-car company, right? And is that one car the 300 and its various derivatives, including the Dodge Magnum wagon, the Dodge Charger sedan and the coming Dodge Challenger?
"Maybe there is a one-car spotlight, but we are a multicar manufacturer," he says.
"We launched nine great products in the last year, but they have been overshadowed by one spectacular product."
Stuart Schorr, Chrysler's top public relations guy in Canada, pipes in: "If I were to call us a one-car company, I'd say it's a minivan."
Yeah, maybe. True, the Dodge Caravan is the second-best-selling light truck in Canada, behind the Ford F-Series pickup.
But the 300 is getting all the headlines. That irks the Chrysler people because they have also recently launched a new version of the Jeep Grand Cherokee, a new Chrysler PT Cruiser convertible, a long-wheelbase version of the Jeep TJ, a very successful diesel version of the Jeep Liberty, a Chrysler Crossfire roadster, a restyled Dodge Dakota pickup and a whole range of high-performance SRT derivatives of existing models.
None is generating buzz like the 300 and, truthfully, most have been only modestly well received.
Take the Jeep Grand Cherokee Limited. It is all new for 2005 in every way, yet Jeep is offering 0-per-cent financing to entice buyers into showrooms. Similarly, to goose sales of the also-new long-wheelbase TJ Unlimited, Chrysler is tossing out a $3,000 incentive. And the Dodge Grand Caravan, with its highly touted and eminently practical Stow 'n' Go fold-in-the-floor seating, is being pushed off dealer lots with the help of a $7,000 giveaway.
Buyers obviously are in a picky and demanding mood. As Mark Norman says, if your business is selling cars and trucks, "it's a dogfight out there."
Unless you have a white-hot winner of a new model, such as the Chrysler 300 and the derivatives based on the mechanical underpinnings Chrysler calls the LX platform -- underpinnings made with major contributions from the Mercedes-Benz E-Class.
The Brampton, Ont., plant where the 300, Magnum and now Charger are built is running flat out on three shifts and maximum overtime just to keep up with demand. To entice buyers to the 300, Magnum and Charger, Chrysler doesn't need to sweeten deals with cash-back handouts or cut-rate financing deals -- pretty rare in today's new vehicle marketplace.
Still, some could make the argument -- and I'd be among them -- that, so far, Chrysler remains a one-hit wonder, even if that hit is the genius of not just a single car model, but of a whole platform wearing several different flashy bodies. That is a notion Norman, Schorr and everyone at the most senior levels of Chrysler hotly deny.
"People look at the 300 and say: 'Man, this car has done it,' " chief operating officer Tom LaSorda recently told Automotive News. "But, inside, we know that it is not the only winning vehicle."
On the inside maybe, but on the outside many Chrysler, Dodge and Jeep vehicles are wearing sales incentives that would indicate they are nowhere as hot as the 300 and its spawn. But to be fair, according to Merrill Lynch, DaimlerChrysler's incentives in May in the United States dipped 2.6 per cent while sales were up 5.6 per cent on the domestic front.
DaimlerChrysler's market share in the United States is also up almost one percentage point from a year ago to 15.6 per cent. In Canada, the picture is less pretty. Through May, DaimlerChrysler, minus Mercedes-Benz, saw sales fall 2.9 per cent year over year and market share is down half a percentage point to 13.7 per cent.
The company's weakness is particularly acute in cars, where not a single Dodge or Chrysler appears among the top 10 best sellers, while in trucks only the Caravan (No. 2) and Dodge Ram pickup (No. 5) are ranked among the top 10.
If Chrysler remains a company riding the wave of essentially one giant hit, things won't likely get any better down the road, either -- especially in Canada where a weakness in small cars won't begin to be addressed until the vehicle based on the Dodge Caliber concept hits showrooms in the next few months as a 2006 model to replace the SX 2.0/Neon.
In terms of the overall market, Chrysler, like other auto makers, must also cope with high oil prices, which show no signs of abating, potentially volatile interest rates and those profit-draining sales incentives now clearly at unsustainable levels in the long term.
Those are just the current challenges for a company still working to recover from massive losses in the early part of this decade. Even if Chrysler is more than a one-hit wonder, things get tougher from here on out.
Chrysler is promising 16 new cars and trucks by the end of 2006, on top of the nine new vehicles introduced this past year. Analysts says Chrysler's plans are grand, to say the least.
At the same time, Chrysler is promising to match Toyota's quality levels by 2007 while moving to reduce the number of basic vehicle architectures it uses from 12 to three by 2008.
That should reduce costs and add flexibility to Chrysler's remaining factories. It is not easy to chop platforms, however -- and it is risky. When car companies share platforms across too many product lines, they often create a stable of look-alike products. That turns off customers.
LaSorda conceded as much in an interview earlier this year at Toronto's Canadian International Auto Show, even as he talked about the positive but less tangible benefits of a hit model such as the 300.
"What it has done is given people a lot of pride and excitement," he said. "One product can pull not only itself as being very successful, but it can pull in a whole suite of products."
To a point. LaSorda also concedes that all successful new products must have high quality, outstanding performance (including competitive fuel economy) and, above all, styling that stands out from the pack of the 60 to 80 new models auto makers are regularly introducing each year in North America.
Canadian Ralph Gilles knows this all too well.
He's the senior Chrysler designer responsible for overseeing the development of the 300, Magnum and Charger and who is now working hard with his team to redesign Chrysler's critically important minivans for the 2007 model year.
"Style is your weapon in this competitive environment," he says.
Gilles is also reluctant to go down the "one-hit wonder" road. Instead, he suggests the success of the 300 has helped the design team at Chrysler, and in fact everyone at the U.S. division of this German-owned company, rediscover the styling magic that set Chrysler apart from its rivals during most of the 1990s.
"Our products are American -- they're truly American," Gilles says. "We're not trying to be European. We're being ourselves."
And it's not a bad thing to have a new model, the 300, that has been named car of the year by a raft of publications and associations -- a car as apparently popular with hip-hop youth as it is with middle-aged Calgary oil consultants such as David Gibson, who was among the very first Canadians to take delivery of a 300.
As Gibson puts it: "Chrysler finally found the right mix of horsepower and ride. It's basically a car with a Mercedes-Benz frame and good old American muscle, to say the least."
So the basic formula seems to be in place for Chrysler to transcend one-hit wonder status to full-scale comeback kid.
If Chrysler's return is to be lasting, however, future models must have bold, unapologetic "American" designs that will ride on sharp-handling platforms with at least some borrowed parts and expertise from Mercedes-Benz.
They must also be priced properly (Chrysler officials argue, for example, that the pricing of the 300 has redefined the luxury car segment) and the quality must be Toyota-like bulletproof by no later than 2007.
But even if Chrysler gets all those things right, there is still the competition to consider. At the Toronto car show, LaSorda conceded that there is room for only so many new models capable of hitting the "sweet spots" in the marketplace during any one period.
"If someone gets a hot one [product], it's tough on us and vice versa."
Obviously, Chrysler would like to have more than one clear-cut grand slam product among the coming 16 new models to be introduced by 2007. The Neon replacement -- the five-door Caliber -- will be critically important for Canada where compact and subcompact cars account for more than 40 per cent of the market.
On a North American-wide scale, even more crucial will be the replacements for the Chrysler Sebring, Dodge Stratus (sold in the United States) and PT Cruiser. All will ride on a new, midsize (or D-segment) platform and are part of a bigger product onslaught being funded by a five-year, $30-billion (U.S.) capital investment in product development.
"Chrysler's biggest challenge is the Sebring and Stratus replacements," Jim Sanfilippo, executive vice-president of AMCI, an automotive consulting firm in Bloomfield Hills, Mich., recently told Automotive News.
"It's a high hurdle. They will wade right into the pack. The question is what kind of solution they will bring and what thinking they bring to that segment."
It's a very tough segment. The leading models include the Honda Accord and Toyota Camry. Honda and Toyota sell about 400,000 of each model every year, so the profit and volume potential is enormous.
For DaimlerChrysler Canada's Norman, it's a question of cadence. That is, a steady and plentiful supply of new models arriving in 2006, 2007 and beyond will keep the momentum started by the 300 continuing to the end of this decade.
"In a crowded market, we see product is king," he says. "But Chrysler is a different company than it was six years ago. The elements of a winning formula are in place."
And the power child for that formula is the 300. Now is it reproducible?
What's coming
2006 model year
Dodge Charger: The Dodge version of the Chrysler 300 and Dodge Magnum wagon is hitting showrooms now.
Jeep Commander: A stretched, seven-passenger SUV based on the Jeep Grand Cherokee; coming this fall.
Chrysler PT Cruiser: Freshened for 2006, coming in the fall; with an all-new design due for 2007 or 2008.
Dodge Caliber: A five-door hatchback designed to replace the current Neon it may arrive late this year.
Dodge Ram pickup: Gets a freshening for the 2006 model year and a V-8 with the Multi-Displacement System to improve fuel economy; will arrive in showrooms this fall.
2007
Dodge Sequoia: A new compact SUV.
Jeep Compass: A new compact SUV for this model year or 2008.
Chrysler PT Cruiser: All-new for this year or 2008.
Jeep TJ (Wrangler in the U.S.): The venerable descendent of the Willys gets a complete redesign.
Dodge Caravan/Chrysler Town & Country: The key minivan entry gets completely restyled and reengineered. The styling is being done by a team led by Canadian Ralph Gilles.
Chrysler Sebring/Dodge Stratus (U.S.): Key entries in the mid-size car segment. European versions of this "D-segment" model are also likely to be built. Expect to see sedan, coupe and convertible versions.
Chrysler 300/Dodge Magnum: Look for a modest freshening to keep them current.
Dodge or Chrysler hybrid: This gasoline/electric vehicle will most likely be a truck or crossover utility of some sort, based on the joint venture with General Motors. It may arrive as a 2008 model.
Chrysler full-size SUV: Reports indicate this seven-passenger SUV will be named the Aspen and will be based on the Dodge Durango mechanicals.
2008
Jeep Liberty: A likely redesign and re-engineering for this serious smaller SUV.
Chrysler Pacifica: A restyling and some engineering upgrades are expected for this crossover utility wagon.
Jeep TJ: A derivative of some sort is expected to keep the lineup fresh and interesting.
Sources: Merrill Lynch, Automotive News, industry sources
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