SAN FRANCISCO (Bloomberg) -- Chrysler Group LLC is introducing six redesigned Dodge models as it backs the brand to help the company raise domestic sales by as much as 45 percent in 2011.
The improved vehicles, which include the Charger sedan and Durango SUV, are “critical” to meeting those sales targets, Ralph Gilles, head of the Dodge brand, said yesterday in an interview at a race track near San Francisco.
While Dodge-brand sales have increased this year, 40 percent of deliveries during the third quarter were to corporate, government and rental car customers, according to TrueCar.com, a California-based Web site that studies automotive sales and incentives. The new models, all of which go on sale by the end of this year, may lure more retail customers, Gilles said.
“We have nameplates that are still romantically powerful,” he said. “If you take those names, take care of them, market them, improve them, they will do well.”
Chrysler's new Dodge vehicles also include the Avenger sedan, Grand Caravan minivan, Journey SUV and Challenger muscle car. The changes range from complete redesigns, such as with the Charger and Durango, to mid-cycle updates, such as modifications to the Journey's suspension and interior.
While retail sales will grow because of the new models, fleet sales are likely to remain flat, Gilles said.
“They've got to get the retail back in order,” Rebecca Lindland, an industry analyst with IHS Automotive, said. “While fleet can sustain you for some amount of time, it's not going to be able to be your life blood.”
Chrysler also expects improving resale values to help generate more leases, Gilles said.
“We're going to get back into the leasing business in a big way,” Gilles said. “Our residuals should improve dramatically on every nameplate.”
Chrysler's overall leasing rate this year is 11 percent, while the industry average is 21 percent, according to Edmunds.com, a Web site that tracks automotive pricing.
“A huge chunk of the population is leases, 21 to 25 percent, especially as you get into higher priced vehicles,” Gilles said.
Avenger gets fleet boost
Retail sales tend to be more profitable than fleet sales. Purchasing data from the Los Angeles Department of Water & Power shows how fleet sales can mean lower prices for automakers.
The utility purchased 400 of the 2009 Dodge Avenger SXT sedans last year at an average price of $14,868.69, according to the city-owned power provider. The average transaction price of that model for retail customers was $19,684 a year ago, according to Edmunds.
Dodge's U.S. sales rose 23 percent through October compared with last year, the company said.
The new Dodge vehicles are part of 16 new or refreshed vehicles being introduced this year by the automaker, which emerged from bankruptcy last year under the management control of Fiat S.p.A.
Chrysler CEO Sergio Marchionne's plans call for U.S. sales to increase to 1.6 million next year from between 1.1 million and 1.2 million this year.
Dealers are excited, according to David Kelleher, who owns David Dodge Chrysler Jeep in Glen Mills, Pa.
“I've been selling cars that were tough to sell for quite a few years,” he said. “You give me some cars that can sell, I'm going to do some cool things in my showrooms.”