Phil Biggs covers the automotive industry for NewsTalk 1340 WJRW
August 1, 2012 – 2:30 pm ET
AUBURN HILLS, Mich. – Life is a lot better for Chrysler today. Seeing sales drop from 2.6 million units in 1999 to only 1.4 million last year, Chrysler deeply suffered the sting of the Great Recession like most. But now it looks like they are bouncing back. This week Chrysler announced they sold 1.23 million vehicles in just the first six months of 2012, more than half of its total annual goal of 2.4 million.
This 32-percent year-over-year increase in U.S. retail sales is more than pleasant news. While other automakers have faced the harsh negative impact of economic challenges in Europe, Chrysler’s heavy reliance on the North American market for a majority of its global sales has delivered a unique benefit this year.
Beyond remarkable sales growth, there are other good signs beneath the pentastar: Chrysler expects to expand production of the Dodge Dart in its Belvidere (IL) plant, and also the Jefferson North Assembly plant in Detroit where the Jeep Cherokee is built. And they are evaluating adding new production lines at plants in Toledo, OH and Warren, MI where the Jeep Wrangler and Ram pickups are assembled respectively.
Another good sign is its consistent, disciplined senior management. Chrysler-Fiat CEO Sergio Marchionne is a tough executive, and arguably one of the most recognized and respected in the automotive business. He has won well-deserved acclaim for leading Chrysler out of its Chapter 11 status and even paying off their government loans ahead of schedule.
But there are some hurdles ahead. Even though Dodge Ram, Jeep Cherokee and Jeep Wrangler are market-tested winners, and there are high hopes for the new Dodge Dart, Chrysler’s overall product mix presents some issues going forward. Keeping new product and new technologies in the pipeline is an essential yet dizzying requirement for all global automakers, and Chrysler realizes the need for diversity in their lineup.
This decade it is crucial that powertrain alternatives such as hybrid, EV, hydrogen fuel cell and others are available to complete a full spectrum of offerings. Chrysler has lagged Toyota, BMW, Ford and Honda in this area. Meanwhile, with no captive finance division to boost revenues, Chrysler”s profits rely more heavily on sales of its vehicles than rival automakers.
Although overall product mix demand for Chrysler”s lineup has remained relatively strong in 2012, the splintering U.S. market continues to create further marketing challenges. The two key demographic segments, Baby Boomers and Echo Boomers, force constant proliferation of new platforms, constant re-tooling of content, and continued focus on a design business model over a low-cost manufacturing model.
Marchionne understands Chrysler’s challenges. He fully believes that Chrysler’s return to success is marked by its ability to balance the complexity of the North American market and consumers’ intense demand for content, safety, infotainment, and its constant craving of new choices. With its commitment to exceed the expectations of younger buyers, Chrysler is working hard to position itself well to compete and grow as a niche player in an ever-fragmenting global car market.
America needs more manufacturing jobs, renewed consumer confidence, and the creative buzz that comes from what’s ever-changing in the auto business. And so, as Chrysler travels down a new road home, there has never been a better time for its much-needed resurgence.
Read more:
http://www.1340wjrw.com/
