Regardless of what you may read and hear in the coming days, not one of the countless journalists, analysts, and community leaders who gathered in Auburn Hills to hear Chrysler’s new business plan yesterday really knows what the ailing automaker will look like in 2014. Not even group CEO Sergio Marchionne, the wizard behind it all, was willing to speak with absolute certainty.
“We need to wait a few more months and make sure we’re absolutely right,” he cautioned at one point.
And yet, it was hard not to walk away from the event without some sense of optimism. Chrysler, a company that has spent more than a decade careening from one crisis to another, has a plan. Not a flashy new halo product, not a stampede of bulls running through Detroit, certainly not a Lotus Europa with some Dodge stickers and some laptop batteries. A plan.
What is this plan, you ask? Well, below is my feeble attempt to summarize eight hours of presentations delivered in Texan, French, British and Italian accents, but the key points are simple: $23 billion in new product development, nearly 40 refreshed, redesigned, or completely new vehicles, several new diesel and gas-powered engines. The goal is to break even by next year and to be making at least $8 billion in profit by 2014.
Of course, there are problems with this plan, not the least of which is how long it will take to get in motion in terms of product. Former-owner Cerberus’ spending freeze will be felt for a while, as the Jeep Grand Cherokee and the heavy-duty Ram remain the only new products for the 2010 model year. Through 2011, the company will still be relying almost entirely on vehicles based on aging Chrysler platforms. This is particularly worrisome for the next Sebring and Avenger, which are set to arrive at the end of 2010. Marchionne noted that Chrysler “has not been effective or competitive” in either the midsize or compact segments, but said he was “convinced” that the Sebring/Avenger architecture “will give birth to a completely different product.”
Even if Chrysler comes through with its new vehicles its success is far from assured. The lingering effects of the recession, Fiat’s position in Europe, and Chrysler’s crippled brand image will all play a role in whether the company emerges from its long decline. And yet, at the very least, Chrysler has a plan. After years of waiting and a long day of presentations, we could hardly ask for more.
Here is a summary of how Fiat envisions each Chrysler brand growing in the next four years:
Dodge: Surprisingly, executives said they do not plan to grow Dodge’s market share. Instead, they hope to reposition the brand to appeal to a younger, more diverse (and presumably, more wealthy) audience.
2010– Refreshed Avenger, Journey, and Caravan; redesigned Charger; new 7-passenger CUV.
2011– Refreshed Challenger; possible refresh of Nitro.
2012– New compact sedan on Fiat platform replaces Caliber; possible new Viper.
2013– Fiat-based B-segment car; Avenger replacement.
2014– Redesigned Grand Caravan.
Ram:; Despite the split from Dodge, things won’t dramatically change in terms of products or marketing, largely because the pickup truck has performed well sales-wise since its 2009 redesign. In fact, the brand split may be to allow the trucks to continue to feed off their traditional buyers even as Dodge tries to chase a different market. “This is about adapting to the modern marketplace,” said Ram brand CEO Fred Diaz. Assuming oil prices remain stable, we can expect to see the brand expand to include heavier-duty models, including a possible return to commercial-grade trucks.
2010– Chassis cab.
2011– Possible unibody Dakota replacement.
2012– Refreshed pickup line; Fiat-based large and small vans.
Chrysler:; Chrysler has both the clearest and most difficult missions of all the group’s brands as it tries to move upmarket. The new 300C should play a critical role in this effort, even though Marchionne made clear his disapproval of previous management’s decision to develop the car. “I won’t even tell you how much the 300C platform costs,” he said. Further down the line, look for tie ups with Lancia, both in the United States and abroad, as the company tries to grow its currently negligible global presence.
2010– Redesigned Sebring, Town & Country; new 300C.
2012– New Fiat-based compact.
2013– New Fiat-based subcompact, mid-size, and crossover vehicles.
2014– New Town & Country.
Jeep: Jeep’s product strategy for achieving a goal of 800,000 in global sales by 2014 has two prongs. First and foremost is the Wrangler, which will remain the “anchor” of the brand. The four-door Wrangler Unlimited has been successful, and we’ll see more variants in the next few years. At the other end of the spectrum, Jeep, like Chrysler and Dodge, will be relying on Fiat’s subcompact, compact, and mid-size platforms for the rest of its product line going forward. These products will “be true to the brand without certain elements.” In other words, not all of them will be trail-rated.
2010– Refreshed Patriot, Compass, Wrangler, Liberty; new Grand Cherokee.
2011– More Wrangler variants; 70th anniversary editions across lineup.
2013– Two Fiat-based small SUVs; Fiat-based Liberty replacement.
Alfa Romeo/Fiat: Marchionne was surprisingly dismissive of Fiat and especially Alfa Romeo’s potential roles in the United States. The Fiat 500 is set to arrive in 2011, followed by the Abarth version a year later. It will be sold primarily at dealers in urban areas, and will have its own mini showroom and specially trained staff — much along the lines of Toyota’s Scion distribution. Marchionne said Alfa’s executives would need to convince Chrysler of its value in the United States, but he predicted that its volume would at best be limited to around 70,000 — “Not enough to make a material difference to Chrysler’s health,” he added.