Dodge Dart born as a bargaining chip, and accursed ever since

Short of a last-minute intervention by another automaker, the young Dodge Dart will die this month.

The 4-year, 4-month-old compact sedan was the firstborn child of a shotgun marriage between Fiat S.p.A. and Chrysler, as a way to help the American automaker recover from a debilitating 2009 bankruptcy.

It was born carrying the weight of heavy expectations.

"There's a danger that if this thing flops, that it's going to taint everything I do from here on in," CEO Sergio Marchionne said in January 2012, a few months before the start of production. The automaker had planned to build at least seven other vehicles on the same platform as the Dart; only two others made it to production.

The death of the Dart and the upcoming production end for sibling Chrysler 200 evoke uncomfortable memories of pre-bankruptcy Chrysler.

Before the 2008 crash, the automaker had a product lineup filled with pickups, SUVs and minivans. A sharp spike in fuel prices left many Americans questioning the rationale of commuting to work in large, gas-guzzling, off-roading vehicles. When demand for fuel-efficient vehicles spiked, Chrysler had little to offer, and its sales collapsed.

Now, Fiat Chrysler is returning to a pickup- and SUV-dominated lineup in a bid to improve its profit margins, which lag rivals General Motors and Ford Motor Co. Marchionne said he believes low gasoline prices -- and a corresponding shift in consumer preferences away from sedans -- is a "permanent change" that necessitates abandoning the billions spent developing the Dart and 200. 

In 2009 and 2010, when the Dart and 200 production decisions were made, that shift in consumer preferences was unclear, Marchionne argued during the April first-quarter earnings call. "Had we known this, I think we would have refrained from the investment cycle that we went through," he said. 

Last month, Dart sales in the U.S. fell to their lowest levels since the car's launch in 2012. Since it went on sale in May 2012, the Dart has never finished higher than eighth in a crowded segment dominated by the Toyota Corolla and Honda Civic.

The Dart was conceived, in part, because of politics. It may never have existed were it not for a final-day change in Chrysler's 2009 bankruptcy agreement, which demanded that bailed-out Chrysler build a 40-mpg car in the U.S.

Earlier versions of the agreement required only that such a car be built in a NAFTA country. Fiat had intended to use the Mexico-built Fiat 500 to meet the requirement, according to a source at the time.

The Dart's birth was labored, its launch problematic and its profit margin razor-thin. Yet as soon as the first salable Dart rolled off the assembly line in Belvidere, Ill., in May 2012, the car was considered -- at least on one important criterion -- a success.

Just by being built, the Dart had accomplished its primary mission: satisfying the 40-mpg U.S.-built car requirement. In January 2012, with the start of production still four months away, 5 percent of Chrysler's stock was transferred from the UAW's retiree health care trust to Fiat.

On dealer lots, the Dart replaced the much-maligned Dodge Caliber and was supposed to lock in the compact car segment for what is now Fiat Chrysler Automobiles. It was also the linchpin of a platform-sharing strategy that was to drive the company's future product offerings. But a series of obstacles meant that the Dart never really found legs in the marketplace.

A lot of pressure rode on the Dart's hood at launch. 

Marchionne's five-year business plan in 2009 called for at least seven vehicles that eventually would share the Dart's CUSW platform in the U.S. between 2009 and 2014. 

Just two others were eventually built: the Jeep Cherokee and the Chrysler 200. Though the Cherokee continues to sell well, production of the slow-selling 200 is scheduled to end in December. 

If the Dart failed, Marchionne said, it would be a huge product-development hurdle. "We would really have to go back and rethink the architecture and redo it if it flopped," he said in January 2012. 

When the Dart arrived at dealerships a few months later, the stresses from its rushed birth were evident. 

Though built on a proven -- if aging -- platform that had been used in Europe on the Alfa Romeo Giulietta, the Dart was not launched with the intended new nine-speed automatic transmission from ZF Friedrichshafen, which would have provided significantly better fuel economy. The transmission wasn't ready. 

Instead, the company sourced an off-the-shelf Hyundai six-speed automatic and a Fiat-sourced dual-dry clutch six-speed automatic to get the Dart on dealer lots. The car was launched with a combined fuel economy rating of 29 mpg, which was on a par with many of its competitors but nothing special. 

A bigger transmission problem emerged: The initial batch of Darts sent to dealers in 2012 had only manual transmissions, limiting the ability of many potential customers to take test drives. As a result, the company reported just 25,304 Dart sales in 2012. 

The Dart "got off to a very slow start," said Joe Phillippi, president of Auto Trends Consulting. The automaker didn't offer the kinds of packages people were looking for, he said. The car "got stale very fast, as far as dealers were concerned."

A year after the Dart's glitzy introduction, Marchionne took the blame for its slow start. It had gone "not as well as I wanted," he said, saying that the available powertrains were "not the ideal solutions for that car and that segment."

The dual-dry clutch transmission, popular in Europe, had gone over particularly badly with consumers because it didn't behave the way drivers expected.

"I decided I was going to put a European transmission into the car because I was going to try to teach Americans how to get [better] fuel mileage," Marchionne admitted.

Profit margins were extremely thin on the Dart. In late 2015, a Dart SE had a sticker price of $16,495 before delivery -- just $15 higher than its wholesale price. The dealer holdback at that time was just under $520, leaving little room for dealers to negotiate.

Dodge tried to help spur sales with leasing incentives in some regions, which worked for a while. Dart sales peaked in March 2015, hitting a record 9,572 vehicles in the U.S. But when the lease deals went away in May 2015, monthly Dart sales totals began to fall precipitously.

In January, Marchionne announced that Dart production would be outsourced to another automaker to make way in the Belvidere assembly plant for the Cherokee. Seven months later, FCA has yet to announce what other automaker would build the Dart or what compact car FCA dealers would offer in its place. The same is true for the 200.

Marchionne said last month that FCA continues to work on the issue and is making progress.

"We'll have an answer hopefully soon," Marchionne said. "There are real viable options. Everybody's in the same boat that I am, so to the extent that you can share the burden with somebody else, they would gladly do it, maybe with one exception."