Jerry Flint, 07.05.05, 3:52 PM ET
NEW YORK – DaimlerChrysler‘s American Chrysler Group is largely a truck company. Three quarters of its sales have been minivans, pickups and Jeeps. Chrysler and Dodge cars–even if we count the PT Cruiser as a car–are outsold by passenger cars from Toyota, Chevrolet and Ford. But things are beginning to change. Look at the sales figures.
|Time Period||Sales Of Chrysler Cars||% Of Company Total||% Of Industry|
|2005 (first five months)||296,608||30.6%||9.1%|
|Source: Automotive News|
Back in 2003, Chrysler (nyse: DCX – news – people
) sold 7.2% of the passenger cars bought in the U.S., an abysmal showing. I recall that even little American Motors once briefly reached 7% of the car market. But in the first five months of this year, Chrysler posted a 19% gain in passenger car sales. It is worth noting that during the same time, Chrysler’s truck sales are down only 1%, which is pretty good considering the market.
The Chrysler 300 sedan is a home run and the companion Dodge Magnum wagon is doing well, too. I don’t think that this is a single Kodak moment for Chrysler; instead, I think it is the beginning of a genuine turnaround in the passenger car side of its business. Chrysler executives are also saying that they do not intend to give up ground in trucks, and they seem to have enough new trucks coming to make that true, too.
In a market increasingly driven by new products, Chrysler has several projects in the pipeline. Let’s start with that LX platform, the basis for the 300 and the Dodge Magnum wagon. A new Dodge LX sedan, the Charger, has just gone on sale, and I think 100,000 sales a year is a fair target. The Charger offers an economical V-6 as well as an option of the big Hemi V-8, which means that Dodge is likely to find some success selling the Charger as a fleet car and even police cruiser.
The company is also is working on a stretch version of its Chrysler 300 for limousines and even studying whether to build a four-door 300 convertible. The limo is for real, the convertible uncertain. And souped-up models–a Dodge Charger SRT and Magnum SRT–will be out this fall, too. These last two won’t add a lot of volume but will create buzz.
Of course Chrysler needs more than success with the LX platform for it to regain credibility in the passenger car business. A year from now, it will replace the Dodge Neon, a car that is no longer competitive. Its replacement, an all-new model called the Caliber, is a striking 5-door hatchback and follows the Chrysler strategy of breaking new design ground rather than copying the competition. The Caliber will have a variety of engine options, because Chrysler will sell it worldwide.
Also in the works are replacements for Chrysler’s midsize cars, the Sebring (Chrysler) and Stratus (Dodge), which currently account for 200,000 annual sales. The current models, some which Mitsubishi
(nyse: MTF – news – people
) builds in a factory in Illinois, are unremarkable and need steep sales incentives. Chrysler did an excellent job on the LX platform in giving Chrysler and Dodge versions distinct designs, and I trust that it will do that again when it redesigns its midsize cars–all of which will be built in a Chrysler factory.
Chrysler people say that the Dodge Stratus replacement is bold, consistent with where Dodge has been going with the Ram, Magnum and Charger. It’s been a segment where the domestics have not scored well, but Chrysler thinks that it has a shot at success. The same goes for the Sebring replacement, which was previewed to dealers in Cannes, France, in May. It’s something new, not a mini 300. The convertible Sebring has always been a decent seller, but the new version, probably out in 2007, should be much tighter, with a lot less cowl shake.
What about Chrysler trucks? Coming this fall is a reskinned Dodge Ram pickup line, including a pickup with a full-passenger compartment. Sometime next year, Dodge will also get its own distinct version of the Jeep Liberty compact sport utility vehicle. As for Jeep, it’s getting several new entries, such as the Commander, the first Jeep with three rows of seats, and a high-performance Hemi-powered SRT Jeep Grand Cherokee. Jeep is also getting two smaller models, which will share mechanicals with the car-based upcoming Dodge Caliber. And the Chrysler division is getting a luxury version of the big Dodge Durango sport utility vehicle.
In five months this year, Chrysler and Dodge cars and trucks, excluding Mercedes-Benz, won 14% of the market. Ford
(nyse: F – news – people ) has 18%, without Volvo, Land Rover and Jaguar. In the months ahead, I think that Chrysler can narrow that four-point gap.
Message to my friends at Ford: It is time to start worrying.