Chrysler for the masses; Dodge goes performance

The mid-sized Chrysler 200 sedan began shipping to dealers May 2.
Related Links
Related Stories
Related Topics

DETROIT -- Five years ago, Chrysler Group positioned Dodge to take on Ford, Chevrolet, Toyota and other mass-market brands in the United States.

That didn't pan out. So now, it's the Chrysler marque's turn to battle the mass-market brands, while Dodge shifts to a lineup of performance vehicles.

But that's OK with dealer Doug Moreland near Denver. "We don't sell a lot of Dodge cars. We should be selling more," he said. "But they're not going to let Dodge die."

Fiat Chrysler Automobiles' latest five-year business plan, unveiled last week, lays out an ambitious strategy through 2018 that will:

• Boost the Chrysler brand from three nameplates to six, plus two plug-in hybrids.

• Refocus Dodge from eight vehicles to seven performance-oriented nameplates, eliminating its minivan and mid-sized sedans.

• Return the SRT Viper to Dodge.

The plan is a tacit admission that the company's efforts to move its Chrysler brand upscale and use Dodge to fight full-line brands haven't worked.

"There has been an internal conflict inside Chrysler forever about who does what in the mass market," Fiat Chrysler CEO Sergio Marchionne told journalists last week. "Somebody needs to serve the mass-market side of this business. I need to have a guy that takes on Toyota, Honda and the rest of it."

For now, that guy will be Chrysler brand chief Al Gardner.

The mass-market shift from Dodge to Chrysler will affect the brands' lineups, but not most dealers.

About 92 percent of Chrysler Group's 2,392 dealerships in the United States sell all four of the automaker's core brands, and only about 90 nationwide lack either Dodge or Chrysler, a company spokesman said.

Chrysler Group's 2009 business plan sought to position the Chrysler brand upmarket to compete with brands such as Cadillac or Acura. But that proved unrealistic when one of Chrysler brand's three vehicles was the lackluster Sebring sedan and the second was a minivan.

To more than double 2013's global sales of about 350,000 units, the brand is counting on capturing almost all of Dodge's Grand Caravan and Avenger sales with the Town & Country and redesigned 200.

It's also relying on sales of the Chrysler 100 compact sedan, due in 2016, two new crossovers due in 2017 and 2018, and gains from its existing vehicles.

One place where a Dodge-to-Chrysler shift might make a difference is in the Denver area, where dealer Moreland owns two Dodge-Ram stores and two Chrysler-Jeep stores.

Moreland said Chrysler's lack of a full lineup has hindered the brand as it launches its redesigned Chrysler 200. The mid-sized sedan began shipping to dealers May 2, Chrysler says.

Expanded Chrysler brand
Fiat Chrysler Automobiles' latest 5-year business plan calls for a bigger Chrysler brand in 2018 to take on the mass-market brands.
 2013 Chrysler brand2018 Chrysler brand
Nameplates200, 300, Town & Country100 subcompact sedan, 200, mid-sized CUV, 300, Town & Country*, full-sized CUV*
Plug-in hybrid02
Annual sales350,000800,000
*With electric models Source: Fiat Chrysler Automobiles 2014-18 business plan

"We're not on the shopping list of a lot of people, like import buyers, and to have a full line is paramount," Moreland said.

Dodge will take a significant sales hit when the Avenger and Grand Caravan are killed. Together the Avenger and Grand Caravan sold 217,861 units in 2013 in the United States, or 38 percent of the brand's U.S. sales.

The Avenger ended production in January and sales are winding down; the Grand Caravan will remain until 2016. Dodge is not expected in the plan to reach its 2013 sales level of 596,300 again until 2018.

Yet Dodge brand head Tim Kuniskis said the 100-year-old brand doesn't have to have a vehicle for every consumer.

"Dodge is the American performance brand," Kuniskis said in arguing that it was OK to cede minivan and mid-sized sedan sales to Chrysler. "This is not a new strategy. This is a purification of the brand."

Dodge will eventually get new product under Fiat Chrysler's latest five-year business plan, but not until 2018, when a new subcompact sedan and hatch arrives in the lineup. Until then, the brand will live with its existing nameplates -- the Dart, Charger, Challenger, Journey, Durango and Viper -- which will be refreshed or re-engineered beginning in 2016.

Josh Towbin, co-owner of Towbin Automotive, sold more Dodge vehicles than any other dealer in 2013, according to Kuniskis. Towbin said his two Chrysler-Jeep-Dodge-Ram stores in Las Vegas will adjust to the changes to the Dodge brand.

"We will pump up our Journey, we'll market more and stock more," Towbin said, speaking of his plan to concentrate marketing dollars on Dodge's seven-passenger crossover. "Even though it's already there, I think Journey becomes the volume replacement for Avenger and Caravan."

You can reach Larry P. Vellequette at lvellequette@crain.com.


advertising
Have an opinion about this story? Click here to submit a Letter to the Editor, and we may publish it in print.

Or submit an online comment below. (Terms and Conditions)




Rocket Fuel