Chrysler Plans New ‘ZJ’ Sport Utility Vehicles
Capitalizing on growing consumer demand for Jeeps, Chrysler Corp. said Thursday that it will spend $1 billion to develop and build a new line of sport utility vehicles to be introduced in 1992.
The announcement is the latest in a series of production ventures by the No. 3 U.S. auto maker.
Chrysler said the model, nicknamed the ZJ, will be built at its new Jefferson Avenue plant in Detroit. Construction on the plant, which replaces an aging factory now at the site, is to begin in April.
On Feb. 2, Chrysler and the French auto maker Renault announced that they will jointly build the small JJ sport utility vehicle at plants in Europe and North America.
Two days earlier, Chrysler said it would market a version of the Sonata sedan produced by the Korean auto maker Hyundai. Chrysler also will begin distributing Alfa Romeo vehicles built by Italy’s Fiat starting late in 1989 or 1990.
‘Potential for Growth’
Steve Torok, Chrysler director of sales operations planning, said the moves are an effort by Chrysler to minimize its risk while expanding its product lineup. “We can’t do everything ourselves so we are actively pursuing ventures where we think it makes sense internationally,” Torok said.
Sport utility vehicles, which include Chrysler’s Jeep line, the Bronco models built by Ford Motor Co. and General Motors Corp.’s Chevrolet Blazer, are among the fastest selling vehicles in the industry.
Sport utility sales in the United States, which were about 500,000 annually in the early 1980s, reached 933,988 in 1988, or nearly 20% of the light truck market.
“The sport utility market still has some potential for growth,” said analyst Michael Luckey of the Luckey Consulting Group. “The Jeep has become a status symbol among upper-income people. You see a Mercedes in the driveway alongside a Jeep Cherokee.”
Chrysler said the ZJ will be sold by Dodge dealers, who do not currently have a sport utility vehicle, and another version will be sold by Jeep dealers alongside the current Cherokee.
Chrysler said the ZJ will be slightly larger and more aerodynamic than the current Cherokee models. It did not offer further details, but last month Chrysler displayed to reporters a concept version of a future Jeep vehicle that closely matched the description of the ZJ.
At the time, the auto maker said it hesitated to replace the current Cherokee with the more aerodynamic version because of strong customer loyalty to the current boxy Cherokee model.
The Cherokee and the ZJ have been nicknamed “Jeep classic” and “new Jeep” within the industry, mimicking Coca-Cola’s products, and analyst Luckey said he wondered whether both would be popular.
Ohio Plant at Capacity
“My priority would be to stick with the current lineup,” said Luckey. “It’s the old cliche: ‘If it ain’t broke, don’t fix it.’ The Jeep has a tremendous following--it’s almost like a cult.”
Chrysler said it will continue to build the Cherokee in Toledo, Ohio, as long as there is market demand for the vehicle. It said it decided to build the new sport utility vehicles at Jefferson Avenue because the Toledo plant is at full capacity.
