Fiat Models to Drive Chrysler
10-27-2009, 04:34 PM
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Fiat Models to Drive Chrysler
Four months after exiting bankruptcy, Chrysler Group LLC is about to unveil a product road map that relies heavily on vehicles from Italian partner Fiat SpA while abandoning many of the U.S. car maker's own models.
The plan, due to be revealed Nov. 4, involves the return of Fiat's premium, sporty Alfa Romeo brand to the U.S. starting in 2012, according to people briefed on the plans. Chrysler also will introduce to Americans the 500, Fiat's tiny car that is popular in Europe.
Fiat and Chrysler also are working on several new vehicles with Fiat technology for the U.S., including a midsize Chrysler sedan slated to be released in 2012, according to these people.
Meantime, Chrysler is preparing to phase out many current models, including a number of Dodge cars, the Dodge Grand Caravan minivan and several Jeeps.
The sweeping changes represent a big gamble for Chief Executive Sergio Marchionne, who has staked his reputation on the turnaround. Mr. Marchionne, who revamped Fiat as its CEO, appears to be creating a lineup that stays true to Chrysler's strengths in blue-collar muscle cars and pickup trucks while adding European-styled vehicles to attract a new, more white-collar customer.
But Mr. Marchionne's challenge is to keep the company afloat until 2012, when the bulk of the new offerings will arrive. Chrysler is faced with shrinking market share and an aging product lineup. While Chrysler doesn't disclose its finances, Fiat has said repeatedly it won't inject any money into the U.S. company despite receiving a 20% ownership stake under its bankruptcy reorganization. Instead, Fiat is contributing technology and management expertise.
Changing Direction
Under the new product plan, Chrysler will drop several Dodge products, including the Caliber compact, Nitro SUV and Avenger sedan, but will keep the Dodge Challenger, a muscle car, and the full-size Charger sedan.
"I like that plan a lot. Dodge can be the performance brand. They don't have to be something to everyone, but they have to start being profitable," said Ms. Lindland of IHS Global Insight.
Many Chrysler and Jeep models also will die. The Jeep Commander is slated to end next year. By 2012, the Chrysler PT Cruiser, Chrysler Sebring midsize sedan and Jeep Compass and Jeep Patriot SUVs all will exit the market. The auto maker also plans to phase out the Grand Caravan in the next five years, leaving the Chrysler Town and Country as the company's only minivan.
Mr. Marchionne aims to introduce the Fiat 500 subcompact to the U.S. in 2011 and will build the model in Mexico, said a person familiar with Chrysler's thinking. The 500 is viewed by some as Fiat's answer to the Mini Cooper made by BMW AG.
The Alfa Romeo products will be launched in 2012 with the MiTo subcompact, followed by a midsize sedan in early 2013 and the Alfa Milano midsize model, according to this person. All three will be made in North America.
Chrysler plans to introduce a new midsize sedan and compact in 2012 as well as a compact Jeep a year or two later. All three will be based on Fiat underpinnings.
Reintroducing Alfa Romeos to the U.S. will come with challenges, including defining the brand to a public that has a low understanding of it or even may hold the brand in low regard. Alfa Romeo pulled out of the U.S. market in the mid-1990s.
"Bringing in the Alfa name I'm not sure how that is going to help Chrysler," said Adam Lee, president of Lee Auto Malls in Maine. "I'm just not convinced that people in this country have a warm spot in their heart or feel intellectually that it is a good product."
But Alfa will give Chrysler a premium product it hopes can compete with Audi or Infiniti, producing higher profit margins.
Write to Kate Linebaugh at kate.linebaugh@wsj.com and Neal E. Boudette at neal.boudette@wsj.com
Printed in The Wall Street Journal, page A1
The plan, due to be revealed Nov. 4, involves the return of Fiat's premium, sporty Alfa Romeo brand to the U.S. starting in 2012, according to people briefed on the plans. Chrysler also will introduce to Americans the 500, Fiat's tiny car that is popular in Europe.
Fiat and Chrysler also are working on several new vehicles with Fiat technology for the U.S., including a midsize Chrysler sedan slated to be released in 2012, according to these people.
Meantime, Chrysler is preparing to phase out many current models, including a number of Dodge cars, the Dodge Grand Caravan minivan and several Jeeps.
The sweeping changes represent a big gamble for Chief Executive Sergio Marchionne, who has staked his reputation on the turnaround. Mr. Marchionne, who revamped Fiat as its CEO, appears to be creating a lineup that stays true to Chrysler's strengths in blue-collar muscle cars and pickup trucks while adding European-styled vehicles to attract a new, more white-collar customer.
But Mr. Marchionne's challenge is to keep the company afloat until 2012, when the bulk of the new offerings will arrive. Chrysler is faced with shrinking market share and an aging product lineup. While Chrysler doesn't disclose its finances, Fiat has said repeatedly it won't inject any money into the U.S. company despite receiving a 20% ownership stake under its bankruptcy reorganization. Instead, Fiat is contributing technology and management expertise.
Changing Direction
Under the new product plan, Chrysler will drop several Dodge products, including the Caliber compact, Nitro SUV and Avenger sedan, but will keep the Dodge Challenger, a muscle car, and the full-size Charger sedan.
"I like that plan a lot. Dodge can be the performance brand. They don't have to be something to everyone, but they have to start being profitable," said Ms. Lindland of IHS Global Insight.
Many Chrysler and Jeep models also will die. The Jeep Commander is slated to end next year. By 2012, the Chrysler PT Cruiser, Chrysler Sebring midsize sedan and Jeep Compass and Jeep Patriot SUVs all will exit the market. The auto maker also plans to phase out the Grand Caravan in the next five years, leaving the Chrysler Town and Country as the company's only minivan.
Mr. Marchionne aims to introduce the Fiat 500 subcompact to the U.S. in 2011 and will build the model in Mexico, said a person familiar with Chrysler's thinking. The 500 is viewed by some as Fiat's answer to the Mini Cooper made by BMW AG.
The Alfa Romeo products will be launched in 2012 with the MiTo subcompact, followed by a midsize sedan in early 2013 and the Alfa Milano midsize model, according to this person. All three will be made in North America.
Chrysler plans to introduce a new midsize sedan and compact in 2012 as well as a compact Jeep a year or two later. All three will be based on Fiat underpinnings.
Reintroducing Alfa Romeos to the U.S. will come with challenges, including defining the brand to a public that has a low understanding of it or even may hold the brand in low regard. Alfa Romeo pulled out of the U.S. market in the mid-1990s.
"Bringing in the Alfa name I'm not sure how that is going to help Chrysler," said Adam Lee, president of Lee Auto Malls in Maine. "I'm just not convinced that people in this country have a warm spot in their heart or feel intellectually that it is a good product."
But Alfa will give Chrysler a premium product it hopes can compete with Audi or Infiniti, producing higher profit margins.
Write to Kate Linebaugh at kate.linebaugh@wsj.com and Neal E. Boudette at neal.boudette@wsj.com
Printed in The Wall Street Journal, page A1
10-27-2009, 04:46 PM
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Why would you phase out the Caravan? I am feeling that Fiat has no clue what it takes to sell cars in America. I mean..who wants a rebadged Dodge Fiat 500? At least they are keeping the LX platform..but even that is kind of confusing to me because while they are not gas hogs..they are not "green"..and use a lot of Mercedes parts...the relationship with whom is "strained".
10-27-2009, 09:31 PM
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Something else just hit me...
Fiat is reintroducing Alfa Romeo in the US.
Meanwhile Dodge Ram is being split off in it's own brand, Nitro, Caliber, Caravan, and Avenger are being canceled.
What if they are setting the stage to phase out Dodge (or at minimum be able to cancel it easier) and replace it with Alpha.
Fiat is reintroducing Alfa Romeo in the US.
Meanwhile Dodge Ram is being split off in it's own brand, Nitro, Caliber, Caravan, and Avenger are being canceled.
What if they are setting the stage to phase out Dodge (or at minimum be able to cancel it easier) and replace it with Alpha.
10-27-2009, 10:03 PM
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10-28-2009, 06:54 AM
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Well, lets analyze what they said here....
1) Grand Caravan going away: No surprise. Its like Firebird going away. T&C sells more (believe it or not...GC gets lots of fleet sales, yet T&C, which has virtually none, still sells more), and is 1 model to go after that market. Why make 2?
2) Dodge Nitro expiring: Who cares? A lot of us haven't been selling those in a VERY long time, and we have the Liberty anyway!
3) Jeep Commander has long been a bit player...traditional Jeep buyers don't care about 3 rows of seats. That's a Tahoe/Expedition thing. Jeep doesn't need to compete here to be successful, and again...most of us haven't sold much for Commanders in a long time, anyway.
4) PT Cruiser? Not needed if Chrysler is moving up in the world.
MEANWHILE...
1) Once Avenger and Sebring are thankfully gone, we get a new mid-sized sedan, apparently Chrysler-only. Great!
2) When Patriot and Compass leave (having these 2, competing models is such a cruel joke), we get a new model. I fail to see the issue here?
3) I get 3 new Alfa car offerings, that yes, COULD be badged as Dodges, but apparently aren't, as Dodge will still have muscle and trucks. I'm ok with that...doesn't matter to me, either way...
So, in summary, if the product is GOOD...what's the problem, exactly? I still have a Jeep lineup with 4 hopefully strong SUV offerings (Wrangler, Liberty, Patriot and Grand Cherokee), some new Italian offerings (2 subcompacts, 2 mid sized Fiat/Alfas), a Chrysler midsized, large car and Van (maybe they'll get an SUV/crossover in there? Maybe?), and Dodge with a Charger, Challenger, Ram, compact pickup (maybe?) and Durango (remember, the GCher's twin is this one...)...
I'm hardly seeing castration here, gentlemen...I think the only downside is that Dodge could sell the Alfas, but maybe Fiat sees Dodge mid-sized and compacts as too far gone. I know one thing...I sure don't sell the ones we have now!
1) Grand Caravan going away: No surprise. Its like Firebird going away. T&C sells more (believe it or not...GC gets lots of fleet sales, yet T&C, which has virtually none, still sells more), and is 1 model to go after that market. Why make 2?
2) Dodge Nitro expiring: Who cares? A lot of us haven't been selling those in a VERY long time, and we have the Liberty anyway!
3) Jeep Commander has long been a bit player...traditional Jeep buyers don't care about 3 rows of seats. That's a Tahoe/Expedition thing. Jeep doesn't need to compete here to be successful, and again...most of us haven't sold much for Commanders in a long time, anyway.
4) PT Cruiser? Not needed if Chrysler is moving up in the world.
MEANWHILE...
1) Once Avenger and Sebring are thankfully gone, we get a new mid-sized sedan, apparently Chrysler-only. Great!
2) When Patriot and Compass leave (having these 2, competing models is such a cruel joke), we get a new model. I fail to see the issue here?
3) I get 3 new Alfa car offerings, that yes, COULD be badged as Dodges, but apparently aren't, as Dodge will still have muscle and trucks. I'm ok with that...doesn't matter to me, either way...
So, in summary, if the product is GOOD...what's the problem, exactly? I still have a Jeep lineup with 4 hopefully strong SUV offerings (Wrangler, Liberty, Patriot and Grand Cherokee), some new Italian offerings (2 subcompacts, 2 mid sized Fiat/Alfas), a Chrysler midsized, large car and Van (maybe they'll get an SUV/crossover in there? Maybe?), and Dodge with a Charger, Challenger, Ram, compact pickup (maybe?) and Durango (remember, the GCher's twin is this one...)...
I'm hardly seeing castration here, gentlemen...I think the only downside is that Dodge could sell the Alfas, but maybe Fiat sees Dodge mid-sized and compacts as too far gone. I know one thing...I sure don't sell the ones we have now!
10-28-2009, 07:04 AM
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Having the Fiat 500, the Jeep Wrangler, Grand Cherokee, and a small crossover, 3 Chrysler sedans and a minivan, the Dodge Charger, Challenger, Ram and a commercial truck, and 3 Alfa Romeos is the best plan under the circumstances.
10-28-2009, 09:39 AM
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I expect Chrysler under FIAT will test the waters in Los Angeles with an attempt to put a more european face on the offerings via the manner in which they are presented.
If the experiment goes well, look for dealers to be told to redesign their showrooms and perhaps work on the appearance of the sales staff. Maybe even have separate show rooms for the uplevel customer they intend to attract.
My impression is they want to build an Audi/BMW sort of image. I think the paring down and separating is all a part of that.
If it works, the days are numbered for Dodge as a brand. Seems to me they are numbered regardless.
If the economy dips further, the whole notion of making inroads with anything new AND uplevel at high transaction price is tough at best, doomed at worst, IMO.
If the experiment goes well, look for dealers to be told to redesign their showrooms and perhaps work on the appearance of the sales staff. Maybe even have separate show rooms for the uplevel customer they intend to attract.
My impression is they want to build an Audi/BMW sort of image. I think the paring down and separating is all a part of that.
If it works, the days are numbered for Dodge as a brand. Seems to me they are numbered regardless.
If the economy dips further, the whole notion of making inroads with anything new AND uplevel at high transaction price is tough at best, doomed at worst, IMO.
Last edited by 1fastdog; 10-28-2009 at 09:44 AM.
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