Chrysler's Marketing Mistakes (Forbes)

The Germans will kill Chrysler and I think Lee is too old now to rescue it again. If I recall correctly, Lee did offer to come in and help Chrysler after the Germans bought it and they turned him down. Even tho I have preferred Chrysler cars over Ford and GM, I may not buy another now that I see what the new owners are doing.

The article shows up some very specific type of American thinking towards motorcars. Or maybe it's just the thinking of 'enthusiasts' of the sort who participate in these newsgroups.

2) Badge engineering. What is the point of a Dodge Stratus and Chrysler Sebring if they are so similar? VW Group is now a master of 'almost' badge engineering with its many brands, but the cars still look different and have different prices. That, however, stems from the different cost bases of where they are produced - Skoda in the Czech Republic and SEAT in Spain. It will be interesting to see what happens when the wages in the Czech Republic are the same as in Germany.

Why does almost nobody outside the US think that a Cadillac is the non plus ultra of luxury? Why do they go for Lexus, MB, BMW etc?

I drove the Sebring Cabrio last April for a few days (posted that before) and liked it, and it's a great lower-price competitor for the Merc CLK Cabrio, but how good is it to own for several years? I had the 2.7 l engine which, if I am not mistaken, has been criticised in this newsgroup on grounds of reliablility.

The point is that people like the writer of the article seem to mourn the passing of some 'golden' age and are railing against the present. But the present is only brought about because of big changes. The US car market is much more part of the world, not least because so many non-US-origin companies are manufacturing in the US. So the present is a reaction to global events, with car manufacturers trying to survive, especially in an environment where too many new cars are chasing too few customers. Introducing a 'sissy' Jeep is one of those strategies. Maybe it should have been done years ago? Range Rover and Land Rover have existed together for years...

Rant, rant, rant...

DAS

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The "Krauts" took over Chrysler the same year I retired - 1998. And ever since, things have SOURED at DaimlerChrysler. Of course the good old American Chrysler executives at the time sold the whole package to the Germans. And don't even about how I feel about the that "traitor" Bob Eaton.

Dan

How do you mean? Damiler is committed to keeping Chrysler and keeping it going. They're pumping in billions.

Landau vinyl roofs were passe.

How so? We've got the Crossfire and Pacifica. We've got rwd Hemi V8 sedans coming.

And financially, Chrysler went through bad times about every decade anyway.

Would you have preferred Chrysler go out of business? Because all the parties involved, including Lutz, say that was a real possibility.

No, it is not!

Yes, it most definately is.

The only demographic a car like that would appeal to is someone in their 70's or 80's. It is so staid and conservative looking. It looks's like a Bentley from the 70's. It looks like a mansion on wheels.

What a way to waste a V-8 RWD. It's heavier than it needs to be, and because of it's huge, FLAT, front profile the cops with radar will see you coming for miles. Streamlined, sleek, or classy looking it is not. The only color this thing will look acceptible in is black. Any other color and it will look goofy and ugly.

Yes, the Germans DID screw chrysler up by forcing Chrysler to axe the first Hemi-300 concept in 2000 and go back to the drawing board but this time use as much Daimler hardware as possible, and force Chrysler to use a chasis that's obviously designed to cover both car and SUV models. Chrysler designers have said that the chasis was not optimal and they did the best they could with what they had to work with. The ugly slab of a car is what resulted.

put that v-8 hemi in a small package and compete with the ricers that are out there...

Note the small print. I used to have a neon that would have loved a hemi. Sigh.. make good car unaffordable.. noone buys.. make crappy car affordable, people put on neon lights and a spoiler and call it cool

Ric

No, it most definately isn't. You have your opinion and I have mine and neither of us will change that of the other.

and continued:

Says you, in your opinion. I am far from my 70's and 80's and I resent your insult.

and further stated:

If you have to worry about cops with radar I have to worry about being on the same road as you. Fortunately, as you are not in my area I, my wife and kids can all drive safer knowing you are not around.

and finished with:

No, we ended up with your arrogant, obtuse, "only-what-I-say-matters" attitude.

It's real easy to throw stones at a marketing strategy employed by a company that is losing money. But the author is ignoring that just about all automakers today are losing money. Therefore according to the author's logic, just about all automakers's marketing strategies are wrong.

Well if that is the case who is buying the cars?

The truth is that ALL automakers are suffering sales volume drops, across the board, except for tiny, niche automakers. And those don't make up anywhere near what the lost sales of everyone else is.

Globally, all economies are down. More people are deferring purchasing decisions, and fewer people are buying cars. There's many many people who 5-10 years ago owned 2 cars in the family, then one member lost their job and ended up having to get another job that paid less. The family then decided to drop one car, or decided to drive fewer miles. Thus the cars last longer.

There are really only 2 possible ways to jazz up the auto industry. The first is to fix the global economy, get more money into the hands of the workers, get more of them working and off unemployment, get the ones that aren't on unemployment some fat raises so they have extra money to go throw at toys like new cars. The second is to make the cost of driving the car a lot cheaper, by dropping fuel prices. Neither is likely to happen anytime soon.

Until then, sales are going to remain soft. Automakers are going to have to adapt and figure out how to be profitable while selling fewer cars. This isn't easy when your in an industry where the more cars you manufacture, the cheaper the per-unit cost is to make. You start to make fewer cars, your unit price goes up and you either lose more money faster, or you raise your prices and even fewer people buy your cars and you still lose money faster. Either way creates a vicious downward spiral. But on the other side of the coin, the more cars you make the greater the oversupply, thus the less people are willing to pay for them, thus you have to drop your prices, and if your prices drop faster than the cost to manufacture the car is, you lose money even faster and it still creates a downward spiral.

It is pretty obvious how the market will self-correct if sales don't get pumped up across the board. Simply put, all automakers would continue to oversupply the market, the prices would get more depressed, all automakers would lose money faster, and whichever automaker runs out of money first goes bankrupt and exits the market. The remainder of the automakers will then be able to sell more cars and reverse their downward spirals, and the market will stabilize.

What your looking at with a lot of these articles is people who are just pounding out FUD because they are hoping they can get one of the automakers in trouble a lot faster than the others, that way that one will go bankrupt faster, and the rest of them will be better off.

And the rest of these columnists are making money writing columns like this because that is all they know how to do. If this bozo in Forbes actually knew how to run a company and make money at it, he would be too busy doing that to spend time writing articles that the magazine gives him peanuts for.

This is no different than the JD Powers and Comsumer Reports columnists. Those people don't know anything about how to design cars if they did they would be making the big bucks actually engineering products. So instead they spend their time telling other people how to do their jobs. Losers is what they are, mostly.

Ted

And how do you propose to put a Hemi V-8 under a low-sloping hood of the LH cars? You have every right to agree on the styling. It is good to see that you do not degrade people who disagree with you. Personally, I have never liked the styling on any of the LH cars nor have I cared for the "cab-forward" design. I have found the styling of the 300M marginally acceptable - to me - but not to the point that I would purcahse one. But that is my personal opinion and I am not going to degrade anyone who disagrees with me (unless, of course, someone sees fit to degrade me first) as some in this newsgroup are prone to do.

Of course, the real problem is price. There are few choices under $10,000 in the U.S., while the rest of the world can buy small cars for as little as $6000 (Beetle they just stopped prodution in Mexico). The Smart Car is also small and inexpensive. It is actually as safe as a Civic, despite its small size. Of course, Mercedes engineering kind of helps some there. $8500 gets you a car with ABS and A/C and everything you need to get around town.

They need to offer truly inexpensive cars. Seriously - how hard would it be to taker something like the venerable VW Bus(made until a month ago) and reposition the drivers seat behind the front axle - so that it would pass crash tests? Instead we get the "new" plastic lined version for $20K.

Because then it would not pass the rear collision test. Besides it they sold it in the US it too would cost $20,000 The reason it only cost $6,000 in Mexico is they don't have the EPA, NHTSA, CAFE, OSHA and a branch of the 'American Trial Lawyers Association in Mexico.'

mike hunt

Joseph Oberlander wrote:

Heh. Yet the little Smart Car had a trial run in California a couple of years ago - and passed all of the tests. Yet, no plans to import it.

So - nothing truly inexpensive for the masses. Just overpriced plasticky crap.

The hemi likely isn't THAT much taller than the current 3.5L.

Your comment makes no sense. If they were to sell that vehicle, it would be sold like every other car. It sells very well in Europe, is safe, and gets a whopping 60mpg - all for about $8000 new.

It's a lot better car than a stripper Hyundai as well. Yet we always seem to get the leftover crud while Europe and Japan get the small and affordable cars.

Err, in most of Europe cars are about 30 to 50% more expensive than in the USA. Besides that, fuel costs 3 times more. Roadtaxes are higher as well but most likely we pay less for insurance.

Around town yes, but it is hell to drive one for hours but you don't need to worry about that; you'll be stopping for fuel every 2 hours anyway.

You make a mistake here; you compare the old beattle (not safe, ancient technology) with the Smart (2 person, no luggage, no long trips) and conclude that there are decent small inexpensive cars for everybody. This isn't true. A beattle wouldn't be allowed in most countries as a new vehicle because of environment or safety regulations. And the Smart which does, is half the price of a car because that's what it is; half a car. I think most people would get away with a Ford Focus kinda car though, but it is impossible to get one below 10 grand. Being over 6ft6" myself, I drive a Stratus and love the fact that I fit.

In general a bit over the top as we in Europe would also buy more new if we could afford it; as a matter of fact, I wonder if anyone has any stats from major west-European countries and US about new car/used car purchases. It is true that cars tend to be pricier in Europe, but there is great variation across the EU, which will probably lessen now that most of the EU has one curremcy and everybody can see what everybody else is paying.

An extreme example of the point below is the East German Trabant, made from a fibreglass body. In the de facto absence of anything else, every car ever sold was still running at German unification in 1989 (body rust was, of course, not an issue). In the economic revolution that followed a huge (by local standards) number of these cars (over a million) suddenly were thrown in the scrap heap, giving rise to a major environmental problem, as fibreglass does not rot and is not easily disposed of.

DAS

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