After 3 months of kicking the tires and looking under the hood at Chrysler, CEO Sergio Marchionne is about to roll his game plan for fixing the troubled American auto maker.
The Marchionne presentation will focus not only on the broader topic of bringing Chrysler back to profitability, but also on a fresh brand strategy and the models he plans to add, build upon, and push over the next five years.
To implement the plan, Chrysler will reverse course and start hiring more workers, while asking some of it's current staff to put in overtime. In essence, Chrysler is going from playing defense to playing offense.
What's the game plan? Separate, clearly define brands.
It's long been a running joke in the auto industry. What's the difference between a Dodge Caravan and Chrysler Town and Country? The cup holders. The similar minivans have come to symbolize the problem with Chrysler and Dodge. Their line-ups have been, and continue to be, stocked with cars, minivans and SUV's that are trying to attract the same buyer. Sure, there have been a few models that have stood out and differentiated themselves (Chrysler 300C, Dodge Charger), but for the most part they have been indistinguishable, and largely forgettable. That will change, with each brand becoming more distinct.
Chrysler: Look for the brand to go more upscale from its current positioning. Company executives have talked about putting Chrysler on a level with Lincoln and even Cadillac. That's a lofty goal. If Chrysler is going to achieve that level, it will have its work cut out.
Dodge: To differentiate from Chrysler, look for Dodge to build off its performance background and emphasize driving dynamics and technology. If Dodge is going to be the mass market brand Marchionne envisions, it will have to turn around its track record of cranking out lackluster cars.
Jeep: It has the strongest brand name, and should be the easiest for Chrysler to parlay. A model like the Wrangler is a winner. Now Jeep needs to expand that success, especially on the lower end of the market.
Leveraging Fiat platforms
While Chrysler will not be importing and selling the entire line-up of Fiat models, it will be using Fiat platforms and technology to rapidly expand its offerings with fuel-efficient cars. That means building models in the A, B, and C segments that connect with buyers who traditionally have not considered Chrysler, Dodge, and Jeep models for fuel efficiency.
- The smallest, the A platform models will be covered by the Fiat 500, and Fiat 500 convertible coming in early 2011. Six months later, look for models built off the platform used for the Fiat Panda, a popular hatchback in Europe.
- In the C/D segment, where Chrysler offers the Dodge Caliber, Jeep Patriot and Jeep Compass, Fiat plans a flurry of new models including a mid-size crossover to hit showrooms by 2013 and a compact sedan.
Keep in mind, Fiat is not planning to simply replicate its models in the U.S. Nor will it ditch Chrysler, Jeep and Dodge models all together. In fact, I'm told a new Chrysler Sebring and Jeep Liberty are part of the early plans. Above all else, Fiat will use its expertise in small cars to help Chryslers three brands work their way into those segments. Its already making plans to transform its plants in Belvidere, Illinois and Toledo, Ohio to build B and C segment cars.
Come November, Marchionne will unveil his game plan publicly. Until then, he remains a CEO saying little about turning around Chrysler, but promising to match the success he has enjoyed at Fiat.
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