Chrysler finds itself in need of a tuneup
In the car business, it’s all about product.
You can move iron with incentives and lure tire-kickers with a clever ad. But to rack up consistent sales and build a loyal customer base, a car company needs to make quality vehicles that meet buyers’ needs and fulfill their desires.
For the “new” Chrysler -- which recently went private and is in the midst of a restructuring -- meeting this challenge won’t be easy.
Although the automaker’s Chrysler, Dodge and Jeep vehicles “are seen by consumers as being rugged, tough and powerful with aggressive designs,” says Steve Witten of market research firm J.D. Power & Associates, “what they’re below average on is being fuel-efficient and environmentally friendly, providing good value for money and appealing to younger drivers.”
The Chrysler family also has a bit of an identity crisis, Witten says, with the three brands at times competing for the same customers.
“They should each be going after a different part of the market,” he contends. “Let Chrysler be for older people, let Jeep be for the rough, tough, young kids, and Dodge can be for the sporty, performance buyers.”
While acknowledging the quality and fuel-economy concerns, the folks at Chrysler counter that they are doing very well, thank you, in the three areas they consider key to success.
“We do best when we have a phenomenal Jeep vehicle, a Ram [pickup] and a minivan,” says company spokesman Jason Vines. “That’s what drives our company and we’re running on all cylinders with those three vehicles.”
How does Chrysler’s product lineup really add up? Here’s a look at the strengths and weaknesses:
The good:
Jeep is still a strong brand overall and the new four-door Wrangler Unlimited is one of the hottest-selling vehicles in the country right now.
“They’ve stayed true to the hard-core Jeep loyalist, and they’ve made people who otherwise never would have considered a Wrangler consider a Wrangler,” says Karl Brauer, editor in chief at online automotive site Edmunds.com.
The downside, analysts say, was Chrysler’s willingness to tarnish Jeep’s rep as a tough off-road vehicle -- touted in ads as “trail-rated” -- with “soft” car-based crossovers like the Compass.
“Are you the trail-rated company or are you just the poser crossover company?” asks Eric Noble of CarLab, the Orange-based auto consulting firm. “You can’t be both.”
Chrysler’s Vines considers such criticism naive. The Compass, he says, is a hit with Europeans and other foreign buyers -- exactly the markets it was intended for.
Chrysler and Dodge remain competitive in the minivan segment that they created back in the ‘80s, and the new Town & Country and Grand Caravan models are getting some sparkling reviews.
“They’re the last American manufacturer to be hanging in the minivan segment, and they’ve acquitted themselves quite well,” Noble says.
Though aging, the Dodge Ram pickup is still well regarded by consumers and has held up fairly well this year against an onslaught of competition from the Chevy Silverado, the GMC Sierra and the Toyota Tundra.
A heavy-duty version of the Ram with a diesel engine that meets emission standards in all 50 states is due on dealer lots this fall, and a full redesign is slated for the 2009 model year. If done right, it could be a huge hit.
The bad:
Three words: mpg.
In its old incarnation as DaimlerChrysler, the company’s 2006 lineup of cars and trucks had the worst average fuel economy among eight major automakers. In this era of $3-a-gallon gas, that can turn showrooms into ghost towns.
“The big Jeeps, the big Durangos, the big SUVs are just not moving,” laments Salem Arnaout, owner of Simi Valley Chrysler-Jeep-Dodge. “They need a redesign and better mileage on a lot of models.”
Chrysler is responding with a slew of fuel-conserving drive train options and will roll out hybrid versions of the Durango and Aspen SUVs. “We know where we have to go,” Vines says. “We’re getting there.”
One word: quality. In the latest J.D. Power survey on vehicle reliability, all three Chrysler nameplates ranked below the industry average, although Jeep showed significant improvement from the year before.
In “avoidance” surveys, which measure why motorists don’t consider certain brands when shopping for a car, Westlake Village-based Power found that Chrysler’s brands were bypassed more than average for reasons of reliability, quality and depreciation.
Some key models, such as the Chrysler 300 and the PT Cruiser are showing their age, says Brauer of Edmunds.com. He’s particularly worried about the PT Cruiser, which was Santa Monica-based Edmund.com’s car of the year in 2001 but, according to Brauer, has grown stale.
Chrysler’s Vines points out that, in addition to the Ram and minivans, Chrysler has other new products already in showrooms or headed that way. Key among them: the 2008 Dodge Challenger, a revival of one of the classic muscle cars of the early ‘70s. The new Challenger will be in dealerships next spring, Vines says, well before Chevrolet’s reborn Camaro.
The aggressive design of the new Challenger has been well received in some quarters and raises hopes that Chrysler can recapture the flair for edgy design it was getting kudos for just a few years back.
“When you have a car that looks good,” says Arnaout at Simi Valley Chrysler, “in California that’s going to bring people into the dealership.”
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