American automaker Chrysler is holding a daylong presentation in Detroit outlining its business plan for the next five years. The ailing automaker says the plan is one one of mere survival, but of growth into the future with a large dependence on smaller, more efficient cars made by Italy’s Fiat group, which rescued Chrysler this past summer after it emerged from bankruptcy.
The past couple of years have not been kind to the Detroit automaker whose brands include Jeep and Dodge.
Chrysler is projected to sell less than a million vehicles this year — 50 percent off what it did just two years ago. Its market share shrunk to 7.9 percent last month, and just yesterday the automaker said October sales were off 30 percent.
Meanwhile, October sales showed stabilization or even growth for much of the rest of the auto industry. Detroit rival GM reported a year-over-year increase of 5 percent (its first uptick in 21 months), while Ford gained 3 percent.
Since emerging from Chapter 11 bankruptcy earlier this year, Chrysler has mainly been in what many are calling “survival mode.”
“We’re anticipating better things in the future, but the more important thing is what we can do immediately to improve what we have,” Paul Whitehead, general sales manager at Orange Coast Chrysler Jeep Dodge in Costa Mesa, told the New York Times last night in a late-breaking article.
Via teleconference from Italy, Fiat chief Sergio Marchionne, who now heads Chrysler, tried to make assurances that the automaker is not bleeding money.
“Some of you have been surmising we’re burning through cash,” he said in opening remarks. “This is not true.”
The company had a reported $5.7 billion in cash on hand at the end of September, compared with $4 billion when Fiat took over in June.
But Chrysler knows that if it is to survive, it needs to make major changes in the cars it makes.
To that end, Chrysler says it will:
- Shift from larger engines to smaller fuel-efficient, Fiat-derived ones — possibly including diesel engines for the U.S. market.
- Add 200 engineers in an effort to make improve quality.
- Eventually bring about electric vehicles.
- Introduce a 1.4-liter, four-cylinder gas engine in the Fiat 500 in the fourth quarter of 2010.
- Have some Jeeps use Fiat platforms starting in 2013
- Eliminate the Jeep Compass and Jeep Patriot after 2012.
- Apply fuel-saving Fiat technology to its Pentastar V6.
- Launch a hybrid Dodge Ram 1500 pickup in 2010.
- Introduce a dual-clutch transmissions
- Replace its logo with a new one.
The big question is, is all of this too little, too late? What do you think?
Can Chrysler return to success in the coming years?
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