When automotive archeologists look back on the turn of the 21st century, they likely will regard dot-com mania as the era's silliest development, said Jim Holden, president of DaimlerChrysler's Chrysler Group.
To help foil those conclusions, the goal for contemporary Internet strategists should be to focus almost exclusively on trimming costs.
'The question should be: `How do we use this to revolutionize our cost base?'' Holden said. 'If we do that, we'll break out of the Rust Belt mentality, even if we're still manufacturing companies.'
In a speech at the Automotive News World Congress, Holden reported on the state of the DaimlerChrysler merger and on the potential for sharing costs between Chrysler and Mercedes-Benz.
Engineers from Mercedes and Chrysler are looking at several beneath-the-skin component-sharing opportunities, including suspension parts, engines, transmissions and heating and cooling systems, Holden said.
'There are ways to share components and not share customers,' he said.
For example, Mercedes-Benz will contribute a transmission to the Jeep Grand Cherokee built in Graz, Austria, Holden said.
In another parts-sharing exercise, engineers at each arm of the company looked at engines from the other, he said. Each team found it could eliminate $100 worth of cost from the engine it was looking at without the customer knowing what changes were made. It was an example of the real long-term potential cost savings inherent in the merger, Holden said.
But underlying the lure of parts sharing is the importance of maintaining distinct brands, he said.
A distinct brand will feature product and a communications and marketing voice that is singular and clear. Axing Plymouth was required because the product it offered was redundant, Holden said.
As an example of poor brand management, he pointed to the former Chrysler Corp.'s K-car platform. A single platform spawned six supposedly distinct sedans, along with a handful of coupes and wagons.
'And I was personally responsible for three or four of those LeBarons,' Holden quipped.
Now, following the so-called brand bible, DaimlerChrysler has five sport-utilities - Jeep's Wrangler, Cherokee and Grand Cherokee; the Dodge Durango; and the Mercedes M class - each on its own platform, and each aimed at a distinct segment of the market, Holden said.
In terms of volume growth for the Chrysler group brands, most of the potential is international. Both Jeep and Chrysler can expand sales in Europe, Holden said. And while Dodge is not likely to gain many conquest sales in Europe, it can build volume in South America.
Chrysler, with its minivans and large cars, has room to grow in North America, Holden said. He mentioned the Chrysler 300 Hemi C concept vehicle, unveiled this year at the North American International Auto Show in Detroit, as an example of how Chrysler might position itself for growth in North America.