Chrysler to bring back Dodge Challenger model in 2008

Bloomberg News
Barbara Powell
Jul. 1, 2006 05:44 PM


DaimlerChrysler AG's Chrysler unit is resurrecting its Dodge Challenger, one of the most powerful models from U.S. automakers' muscle-car era in the 1960s and 1970s.

The Challenger, which became a favorite for collectors after its four-year run ended in 1974, will return as a 2008 model. Chrysler executives, flanked by race car driver Richard Petty, showed a near-production today before the Pepsi 400 Nascar race in Daytona Beach, Florida.

The unveiling followed announcements this week by Chrysler, the third-largest U.S. automaker, that it's reviving employee- pricing discounts for July and plans to sell its Smart mini-car in the U.S. Auburn Hills, Michigan-based Chrysler is trying to boost U.S. sales that fell 2.5 percent through May.

The Challenger can be profitable because it will use the same platform, or chassis, as the Chrysler 300, Dodge Charger and Dodge Magnum, said automotive analyst Mike Jackson of consulting firm CSM Worldwide in Farmington Hills, Michigan. "This is one of those perfect plays," he said.


'Hemi Orange'
Chrysler Chief Executive Officer Tom LaSorda declined to say whether the Challenger will have a V-6, as well as V-8 versions, which could expand the demand beyond hardcore performance car enthusiasts. He said the Challenger can be profitable at a lower volume because it can be made inexpensively off an existing platform, and that Chrysler won't chase volume.

"We don't want to oversell it because that dilutes your margins over time," LaSorda said. "I don't get emotional over any car. I get emotional on making revenue and profit."

Chrysler is considering making the Challenger at the Brampton, Ontario, factory where the 300, Charger and Magnum are made, as well as several other plants, which LaSorda declined to name.

The car shown today is a near-production model with a 6.1 liter Hemi engine and painted in a color reminiscent of vehicle's original "Hemi Orange" shade. The smallest engine on the early Challenger was a 290-horsepower V-8; the most powerful generated 425 horsepower.


Muscle Cars
Chrysler may sell about 30,000 new Challengers a year, estimated Jim Sanfilippo, an analyst with Automotive Marketing Consultants in Bloomfield Hills, Michigan. LaSorda said he thinks interest in the Challenger is high enough that dealers could presell a year's worth of vehicles in advance, although he declined to estimate how many that could be.

Sales could be substantially higher than 30,000 a year if Chrysler adds a V-6 option like Ford Motor Co.'s Mustang, Sanfilippo said. The Challenger also can help Chrysler by building interest in the Dodge brand, he said.

"When Challenger was in the market, nobody wanted it," Sanfilippo said. "It was a Johnny-come-lately to the pony car competition. But now that baby boomers want nostalgia, it's about the creme de la creme of the muscle cars."

Ford's Mustang, which debuted in 1964, inspired the "pony car" tag given to the sport coupes, including the Chevrolet Camaro, that followed it onto the U.S. market. The "muscle car" label took hold as the vehicles, and their engines, grew larger.


Smart Car
The Challenger was among the last of the muscle cars when it arrived in 1970. In its first year, 72,975 were sold. By 1974, the total fell to 16,437, and it was discontinued.

By contrast, the Camaro, which General Motors Corp. is considering bringing back, reached a record 260,201 sales in 1979. Sales of the Mustang, redesigned with retro styling in 2004, totaled 160,975 last year -- the most of any sports car.

Chrysler, GM and Ford are losing sales and market share to Asian competitors such as Toyota Motor Corp. as buyers turn to smaller, more fuel-efficient cars and away from pickups, minivans and sport-utility vehicles.

Chrysler was the only U.S.-based