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Where to Now, Chrysler?

For months, make that years, we have been hearing about Daimler Chrysler slipping deeper and deeper under the murky waters of the international auto market. Tens of thousands of workers have been laid off, plants have been shutdown and now Daimler wants to lose the Chrysler division all together. What is the problem? The company has some very exciting cars and trucks coming out. There is a 600 horsepower Viper and a new beautifully retro styled RWD Challenger coming out. There is even a 392ci. Hemi motor! Man, times should be great right?

What you are seeing is a company’s failure to anticipate or even come close to reading a market correctly. Sure, these are hash words but as one laid off worker said, “if we had been building 30-mpg cars we wouldn’t be worried about our jobs.” Has anyone at DCX noticed the price of gasoline for the last several years in the US, let alone Europe? Surely they have noticed their slipping market share. This is starting to look like the mid seventies all over again. All it takes is thirty minutes on the Internet looking at auto manufacturers websites to see what is going on.

I checked out the Dodge website and found it fairly easy to negotiate but not very forthcoming on facts other than “excitement” type stuff. When I wanted to find out about mileage I started looking around and then had to resort to the search function and what I found out was not in step with what the public is buying in ever increasing numbers from Honda and Toyota. There is no leadership on economy or emissions, unlike Honda or Toyota. The closest Chrysler can get is their so-called “world Engine” which is a glorified Hyundai.

When I did a comparison on between Dodge/Chrysler and Toyota and Honda the results confirmed what I said at the front of the second paragraph. Dodge and Chrysler have one car apiece which will crest the 30-mpg mark. The Chrysler 2007 Sebring can achieve 32-mpg and the Dodge Caliber (that is not truly a car but more like a hybrid wagon/SUV thing) will get 32-mpg. Toyota has no less than five distinct models that get well over 30-mpg and Honda has four. If you include the variations on these basic models there are over 22 cars from Toyota and Honda to choose from that will get over 30-mpg. To add insult to injury there are eight that get 40-mpg or above and with the exception of the Hybrids at 22k many of these are under 15K for base models. This doesn’t take into account other markets like trucks and sport and luxury sedans which both the Japanese manufacturers have made huge inroads into. There is also the well-known fact that Toyotas’ engines are now every bit as legendary as the Slant Six for durability.

So what is Chrysler doing to about this problem? They are turning to China. That’s right, they are turning to a country with no religious freedom, no freedom of speech or travel, and government subsidized currency and virtually no workers’ rights. They are going to badge up a bunch of Chinese compacts and sell them to us. You gotta’ be kidding me. Chrysler claims, along with other American manufacturers, that they cannot competitively build a compact with good mileage and low emissions here in the USA. I smell a whole lot of BS.

I am excited about the performance cars Chrysler will be building but how many of these cars will they actually be able to sell? Not every one wants a 500 hp muscle car. When it comes to all-out performance there is a lot of competition these days; BMW and Mercedes each have extremely fast sedans that appeal to the upscale segment, and there are plenty of turbo charged compacts that will give mileage and thrills. Who ever winds up buying Chrysler needs to address a very basic identity problem. Is the corporation a boutique builder of exciting high horsepower, niche market cars, and performance parts or is it a manufacturer of automobiles for every segment of the market? For now it looks like the corporation will continue to bleed off American manufacturing jobs and give us a Chinese compact. Grim. 


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