LOS ANGELES -- Despite a major increase in spending on advertising and marketing and the transfer of a corporate vice president to head operations in the state, the Chrysler group continues to lose ground in California.
The Chrysler group shed nearly a point of retail market share in the state between Jan. 1 and May 31, falling from 7.7 percent to 6.9 percent, a senior executive says. In that period, General Motors and Ford Motor Co. also gave up share as Toyota, Honda and Nissan gained.
"Either lack of product or advertising has hurt us," Patricia Romero, California marketing manager, said in a recent interview. "We have the greatest opportunity here. If we don't pick up here, it could be detrimental for us in the future."
For symbolic reasons, California is especially important to the Big 3. More than 2 million vehicles were sold in California last year, but the state is an Asian-import stronghold. Toyota is the No. 1 retail brand in the state.
Through May, the Big 3, including non-U.S. brands, held a combined 45.62 percent retail share compared with 39.64 percent for Toyota, Honda and Nissan, the top three Japanese brands.
Last November, the Chrysler group reorganized its 24 sales zones into eight business centers in a bid to speed decision making. Underscoring the importance of California to the automaker, the Chrysler group sent its most experienced field sales executive, 51-year-old Jim Young, to head the center here.
Young is a corporate vice president; the other seven business center heads have the title of director.
|Divvying up California||Leading the pack|
|Retail market share in percent for state's 6 sales leaders||The 10 top-selling cars and trucks in California for the first five months of 2003, based on retail registrations|
|MAKER||JAN.-MAY 2003||2002 TOTAL||Ford F series||35,777|
|1. Toyota||20.06||19.68||Honda Accord||31,101|
|2. GM||17.81||18.17||Toyota Camry||29,341|
|3. Ford||17.46||17.86||Toyota Corolla||27,717|
|4. Honda||13.2||12.55||Chevrolet Silverado||27,378|
|5. DCX||10.35||10.91||Honda Civic||26,525|
|6. Nissan||6.38||5.61||Toyota Tacoma||18,915|
|Source: R.L. Polk & Co.||Ford Explorer||15,804|
|Source: R.L. Polk & Co.|
Romero, 33, was hired in March as part of the push. Her position, too, is unique among the eight business centers.
Romero was born and raised in California and is fluent in Spanish. She worked for American Honda Motor Co. Inc. from 1994 to 1999 in export sales and marketing. Her most recent job was with Toshiba America Inc. in international marketing. She also worked on national and dealer ad campaigns.
Romero says the Chrysler group has committed to adding resources to California for a minimum of eight years. Steps already taken include:
"The intensity with which the imports are marketing and advertising poses challenges," Romero says. "We didn't have products to participate in all the segments."
Romero says the addition of the Chrysler Pacifica and Crossfire and the Dodge Durango to the model mix will boost the company's sales in California. The goals are to increase sales to Hispanics from 12 percent of total to 14 percent by the end of this year and to raise the Chrysler group's market share from 6.9 percent to 8.4 percent next year and to 10.4 percent by 2010.
Romero says Neon sales in in California are up 8 percent, with the SRT-4 accounting for 20 percent of volume.
"So absolutely," she says, "I believe we can increase share."
Maurice Claff, owner of LaBrea Chrysler-Jeep in Los Angeles and co-chairman of the California Chrysler-Jeep Dealer Advertising Association, says the company does fine in the state with trucks but not cars.
"Realistically, this market is import-driven, and nothing will change that until we get cars that are accepted as trendy," Claff says. "We have to change the perception that we have lousy quality and the imports all have good quality."
Claff says the Chrysler group's efforts in California are a good step toward regaining share.
"It may take three to four years to tell people that we build good products," he says. "It won't happen overnight."