Jeremiah 29:11

Chrysler unveils Challenger, bets ‘muscle’ image will trump gas fears

BY MIKE RAMSEY BLOOMBERG NEWS

Posted on Sunday, February 10, 2008

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Chrysler LLC introduced the production version of its new Dodge Challenger last week at the Chicago Auto Show, preparing to begin sales of the remake of a 1970 s “muscle car” at a time when U. S. consumers are seeking smaller, more fuel-efficient autos.

The Challenger is a rearwheel-drive coupe that will vie for buyers against the Ford Mustang and General Motors Corp. ’s next Chevrolet Camaro, expected next year.

Remaking the Challenger is a gamble for the third-largest U. S. automaker. Chrysler is banking on the Challenger to draw customers paying $ 3 a gallon for gasoline to a car that, in its initial 425-horsepower version, will drink fuel at the same rate as a large sport utility vehicle.

“I’ve always loved that car, so as soon as they said they were coming out with it, I said I am going to buy one,” said Jon Wessel, a 52-year-old Springfield, Mo., resident. “I’m not going to miss that era again.” In April, Chrysler will begin selling the limited-run 2008 model with a 6. 1-liter, 8-cylinder Hemi engine that gets 18 miles per gallon in highway driving and starts at about $ 38, 000. Dealers have already taken orders for 9, 000, and only 6, 400 will be made for 2008, spokesman Kathy Graham said.

“There’s definitely a market for this. I’d say, an oversubscribed market,” Chief Executive Officer Robert Nardelli said when asked why the company is bringing out a car with low fuel efficiency at a time of rising gasoline prices.

Chrysler will introduce cheaper versions of the car with moreefficient engines later as 2009 models. The size of those engines hasn’t been disclosed.

Tom Libby, an automotive analyst with J. D. Power & Associates in Troy, Mich., said cars such as the Challenger may struggle after an initial burst of sales.

“While there is a market, the market is limited in size,” Libby said.

The Challenger’s annual sales will reach 35, 000 to 45, 000, according to automotive consulting firm CSM Worldwide Inc. in Northville, Mich. Chrysler is projecting 20, 000 to 30, 000.

The Ford Mustang appeared in its current retro form for the 2005 model year and has been a hit, even though sales have recently declined as the vehicle ages. Ford sold 166, 530 Mustangs in 2006 and nearly 140, 000 in 2007, considered big numbers for a niche segment. The car can be purchased for less than $ 20, 000 in 6-cylinder base form, though special “Shelby” supercharged V-8 editions approach $ 50, 000.

The Challenger will use the same mechanical underpinnings as the Dodge Charger and Chrysler 300 four-door sedans, and will be built alongside them at Chrysler’s Brampton, Ontario, assembly plant. It features a five-link rear suspension, a layout that’s widely considered more advanced than the Mustang’s solid rear axle.

Sales of 40, 000 Challengers a year would be enough to be profitable and may boost Dodge’s image, said John Wolkonowicz, a product analyst at Global Insight Inc. in Lexington, Mass.

“While it may look a little odd at keeping with the times, it’s not, and it’s really a good move for Chrysler,” Wolkonowicz said in an interview. “This is the fulfillment of a long-felt want.” Wolkonowicz said there are many people who have been waiting for such a car from Chrysler. The high-performance Dodge Viper, the only other two-door sports car Chrysler offers, is produced in limited numbers. It sells for more than $ 80, 000.

The Challenger will go on sale a full year before GM’s new Camaro hits dealerships, an edge Chrysler hopes will give it an advantage. GM had discontinued the Camaro in 2002 because of falling sales. Information for this article was provided by Mark Phelan of the Detroit Free Press.