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Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

Old 05-12-2008, 03:38 PM
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Default Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

http://www.bloomberg.com/apps/news?p...yf8&refer=home
Looks like they're making steps in the right direction, I think they're going to be the first US Car Company to reverse their direction

[quote]Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

By Mike Ramsey

May 12 (Bloomberg) -- Chrysler LLC, the automaker owned by private-equity firm Cerberus Capital Management LP, canceled plans for a new sport-utility vehicle and is instead investing in a compact car.

The company won't build a Chrysler brand version of the Dodge Journey SUV in 2009 and will use the savings to help pay for designing a compact car to be manufactured by Nissan Motor Co., Co-President James Press said in an interview today.

The move reflects a push toward more fuel-efficient vehicles and Chrysler's goal of eliminating overlap between its brands. Abandoning the SUV will also leave Auburn Hills, Michigan-based Chrysler with fewer new or revamped products to introduce in 2009, putting the automaker at risk for further declines in market share, analysts said.

``Resources have been deployed to basically support our entry' into the small-car segment rather than building two versions of the Journey, Press said. ``It's a segment we are not competing in now.'

Press said in March the company needed to cut the number of SUVs it offers in half, from 11. Chrysler gets about 70 percent of its sales from light trucks, which include SUVs.

Waiting for 2010

The automaker has cut four models. Chrysler's plan will help pare costs, and may broaden the customer base once vehicles under development get to market, analysts said.

In the meantime, cutting the Chrysler brand version of the Journey will leave the company with almost no new or redesigned vehicles to promote at dealerships in 2009, said Erich Merkle, an auto analyst at IRN Inc. in Grand Rapids, Michigan.

``2010 can't get here fast enough for Chrysler,' Merkle said in an interview.

Merkle expects Chrysler to introduce only a heavy-duty version of its Dodge Ram pickup in the 2009 calendar year. A redesigned version of the regular Ram pickup will go on sale later this year. The dearth of new products may allow other automakers to make further inroads on Chrysler's U.S. market share.

``We are going to see if Cerberus will have the fortitude to gut it out,' he said.

Chrysler's market share through April was 12.5 percent, down from 14 percent a year earlier. U.S. sales have fallen 18 percent this year, in part because of the model cuts and reduced sales to rental car companies.

The company will discontinue the Jeep Commander SUV next year, according to people familiar with the company's plans.

Product Improvements

Chrysler is concentrating for next year on improving the vehicles it currently sells before it starts marketing the new compact and other vehicles in 2010, Press said. Chrysler has said it's invested $500 million on more than 400 minor improvements to existing vehicles since Cerberus bought 80.1 percent of the company in August.

``It's really a good time for us to absorb these quality improvements,' Press said.

The automaker is planning to make upgrades to its Sebring sedan in 2009, the Detroit Free Press reported in April, citing an interview with Frank Klegon, product development chief. The car was fully redesigned in 2007 and automakers usually do only minor modifications for about five years.

This year, Chrysler will bring three Dodge vehicles to market, including the Journey, which went on sale in March. It begins selling a new version this month of its classic muscle car -- the Challenger -- and later this year will offer the redesigned Ram pickup.

2010 Introductions

Tracy Handler, a product forecaster for Global Insight Inc. in Troy, Michigan, shares the assessment of IRN's Merkle for Chrysler's product outlook for next year.

``We don't show anything in 20
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Old 05-12-2008, 09:01 PM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

Honestly, I'd feel better if I knew they were going to do this correctly but I fear they are not going to do this correctly by making the same mistakes that has brought them to this position. They need to learn how to dig deeper and build their own cars. Re-badging fails more often than it succeeds no matter how good or bad the model is.
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Old 05-13-2008, 05:16 AM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

I'm with you on this...interesting side note; I read somewhere, where Dodge will be putting their engines (hemi's to boot) into Nissan Titans?

That is disconcerting....are they going to become an engine manufacturer for Asian automobiles? Odd.
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Old 05-13-2008, 08:33 AM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)


ORIGINAL: DSkippy

I'm with you on this...interesting side note; I read somewhere, where Dodge will be putting their engines (hemi's to boot) into Nissan Titans?

That is disconcerting....are they going to become an engine manufacturer for Asian automobiles? Odd.
Yep, that is what I've heard. That is why I was going on earlier that this makes no sense that Chrysler is sharing their two bread and butter products (the Ram and minivans) with their competitors in exchange for a cheap diesel (Volkswagen) for a mature market that they really need to give up on getting into on a larger scale than they are since this obsession contributed to that spouse beating marriage with Daimler and they get a cheap quality, third rate economy car offering instead of any of Nissan's good stuff. On top of this, they give the Dakota to Mitsubishi to make the Raider and that used Chrysler engines. The Raider should be a sign that just like Japanese cars badged as American cars fail more often than they succeed, the same is true for the opposite situation. Nissan should just give up on the full-sized truck market.

Honestly, Chrysler should consider doing this only if they need to do this to make the production level high enough to make something profitable. They should consider doing this for the Viper only so then they can hope to keep the car in production.

The funny thing about the situation is that for years Chrysler wouldn't use their own engines and preferred to rely on Mitsubishi when many times they had a just as good if not better engine, now that their engine lines have been neglected and need a technology upgrade (I'm referring to the V6 line since it will be used in the Volkswagen minivans), now they not only use their own engines but are going to give them for their competition to use. Honestly though, a pushrod engine is better suited for a full-sized truck's needs and demands so in this case it does make sense that the Asians are going to them for this.
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Old 05-13-2008, 09:58 AM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

You're absolutely right. Achieving better economies of scale is the only thing that would make sense for them to dilute sales of a premium product like the Hemi, but even that is a little hinky.

I mean Ford owns (they still own right?) Cummins, but that's a side business which they treat(ed) like a cash cow. You don't go from being an auto producer to just an engine producer...

It seems to me, they're looking for path of least resistance as opposed to the best path. Don't get it.


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Old 05-13-2008, 12:10 PM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)


ORIGINAL: DSkippy

You're absolutely right. Achieving better economies of scale is the only thing that would make sense for them to dilute sales of a premium product like the Hemi, but even that is a little hinky.

I mean Ford owns (they still own right?) Cummins, but that's a side business which they treat(ed) like a cash cow. You don't go from being an auto producer to just an engine producer...

It seems to me, they're looking for path of least resistance as opposed to the best path. Don't get it.


Well, in the case of the Hemi, I don't think they need to do that because the Hemi from what I have read (unlike the first Hemi small block or the 426 Hemi) is actually cheaper to build than the V8s it replaced and cheaper than the 4.7L. I can understand them doing this with the 4.7L since it isn't used that much, but the Hemi does not make sense nor does it when they sell so many Rams that it could have the negative effect of over doing production making it inefficient. What I'm saying is Chrysler might want to consider this only for cars like the Viper that they are having trouble making it profitable due to such low demand and a high price tag to help lower the price tag as Ferrari is doing with one of their upcoming cars that is a Maserati GranTurismo underneath. If Chrysler could find some one to help cover the costs of the Viper, then it might be a more profitable venture.

I'm not sure what the situation is there with Ford, but it isn't the way Ford fans would like it to be. Chrysler at this point isn't going to be an engine producer, I think they think they can put their money and effort into what they are currently good at and tempting manufactures who are not good at these markets and make a trade. The problem is these other manufactures are not good at the things they are getting in return.

I will say it is probably for the best that Chrysler does not get a twin of this model. The Pacifica was a failure and I doubt they would do this market correctly anyways for Chrysler. Chrysler has too many models if you ask me. Plus the short wheel base T&C/Voyager under the Chrysler badge never was that successful. The Journey is only needed by Dodge as only the Caravan had a real market to replace. The fact is they need to build their own compact that can compete with the Corolla and Civic on fuel economy, and the EVO in performance at the top of the line.
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Old 05-29-2008, 11:14 AM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

Dodge sees market share gains with 2009 Ram pickup
Thursday May 29, 2:06 pm ET
By Soyoung Kim

AUBURN HILLS, Michigan (Reuters) - Chrysler LLC (CBS.UL) said on Thursday that it expected to increase its share of the tough U.S. pickup truck market with the September launch of the redesigned Dodge Ram.
The 2009 model, which will compete against Ford Motor Co's (NYSE:F - News) redesigned version of the U.S. market-leading F-Series pickup truck slated for later this year, comes as truck sales plummet amid record high gasoline prices.

Still, the Dodge Ram remains Chrysler's single best-selling vehicle, and analysts see its success as key to the automaker's turnaround under private equity owner Cerberus Capital Management LP.

"We're confident we're going to pick up some market share (in the truck segment) with this vehicle," Mike Accavitti, director of the Dodge brand, said at a media briefing.

"Whenever gasoline prices spike, there's a freefall in the truck segment," he said. "But the market is still sizable."

A slumping U.S. economy and runaway gas prices have prompted consumers to shift toward more fuel-efficient smaller cars and crossovers and away from large trucks and SUVs.

Sales of pickup trucks dropped about 18 percent in the first four months of the year, outpacing the 9 percent decline in the overall vehicle market, according to Autodata Corp.

"If life were perfect, we would launch (the new Dodge Ram) in an upmarket," Accavitti said, "but the market is still substantial."

Dodge has about 16.6 percent of the truck market, behind Ford and General Motors Corp (NYSE:GM - News). Toyota Motor Corp's (Tokyo:7203.T - News) Tundra pickup truck trails, but is the only major brand gaining share in the slumping market.

INCREASED FUEL-EFFICIENCY

Chrysler, the No. 3 U.S. automaker, has yet to disclose prices for the new Ram. Base prices for current models range from $21,485 to $40,000.

Buyers will be able to choose between six-cylinder or eight-cylinder engines.

The company said the new model got 10 percent to 20 percent better fuel economy than the current version because of various technological advancements.

The current Dodge Ram gets about 13 miles per gallon in the city and 17 on the highway, the company said.

Chrysler plans to offer light-duty diesel and two-mode hybrid versions of the Ram in early 2010, officials said.

Dodge's share of the truck market has been steady through the downturn, but the Ram has been one of the most heavily subsidized trucks.

Officials acknowledged that there were more than $6,000 incentives on some Dodge Ram models, but declined to comment on whether the redesigned model would be launched with incentives.

Dodge, Ford and other truck makers face a particularly tough market in the United States, where gasoline has reached more than $4 per gallon.

Even drivers who consider themselves "truck people" have shown signs of defecting to lower-cost vehicles, according to market research company Acxiom Corp (NasdaqGS:ACXM - News).

The survey, conducted earlier in May, showed almost half of pickup owners were at least considering buying a car as their next vehicle, and 17 percent expressed interest in shifting to a lighter and more fuel-efficient crossover.

"The casual truck buyer is a thing of the past," said Tim Longnecker, who head's Acxiom's automotive practice.

Detroit carmakers must be prepared to place truck owners in other vehicles in their lineup -- a break from the usual practice of trying to sell them the next version of the truck they now own, Longnecker said. "None of these companies are set up to do that."

(Additional reporting by David Bailey and Kevin Krolicki; Editing by Lisa Von Ahn)
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Old 05-29-2008, 11:48 AM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

I still just don't get why if they could do it in the 80's why they can't do it now? Good mileage vehicles, I mean.

It doesn't have to have ton's or power, just something to offer those looking on the other end of the spectrum. I heard they were talking about toyota's going to eclipse GM again, because a lack of products people are looking to, (fuel efficient econoboxes).

If we can do muscle, like we can do muscle, seems like we ought to be able to compete in econobox land.
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Old 05-29-2008, 05:39 PM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)


ORIGINAL: Albeeno
The current Dodge Ram gets about 13 miles per gallon in the city and 17 on the highway, the company said.
Looks like our Challengers are in Ram territory... maybe that justifies the ram head on the hood??
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Old 05-29-2008, 05:51 PM
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Default RE: Chrysler Cuts SUV to Invest in Compact, Press Says (Update2)

ORIGINAL: DSkippy

I still just don't get why if they could do it in the 80's why they can't do it now? Good mileage vehicles, I mean.

It doesn't have to have ton's or power, just something to offer those looking on the other end of the spectrum. I heard they were talking about toyota's going to eclipse GM again, because a lack of products people are looking to, (fuel efficient econoboxes).

If we can do muscle, like we can do muscle, seems like we ought to be able to compete in econobox land.
Remember the '76 Nova... like this:

[IMG]local://upfiles/748/7018149C337840A185F8EFBBCC99675D.jpg[/IMG] <----- click here

Had one in high school, 350 V8, Auto, 4 bbl and headers on an otherwise stock engine... got 25 mpg on the highway...
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