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Chrysler readies new-product binge

Mon, 09 Aug 2010

Chrysler Group dealers, starving for new products, will get a banquet of nameplates in three years--a startling change for a company that narrowly missed going out of business.

Up to 25 models will be vying for customers' attention in 2013, when new, Fiat-based models are scheduled to arrive. The automaker now has 17 nameplates.

Both the Chrysler and Dodge brands, for instance, will be selling small, compact and mid-sized cars under one roof at most Chrysler Group dealerships. By comparison, a Toyota-Scion dealership now has 19 nameplates, and Ford-Lincoln (minus soon-to-be-extinct Mercury) has 21.

So Chrysler, a far smaller carmaker than Ford or Toyota, will have more brands and nameplates.

While the new products are welcome, they present challenges, say dealers and industry experts:

-- Dealers will need extra marketing and advertising dollars--and finesse--to pitch the new products to a broad range of customers.

-- Salespeople could find themselves scrambling to keep track of all the models and incentive programs.

-- Chrysler's product planners must differentiate the four brands properly to give nameplates distinct identities.

"It sounds to me like it's going to be a bit much to manage," says Ralph Martinez, owner of two Chrysler dealerships in the Portland, Ore., area. "Unless the volumes grow so each of these franchises is kicking up a big number," keeping that many nameplates in stock will be a challenge, he says,

But Kevin Wittrock, general manager of Wittrock Motors in Carroll, Iowa, won't mind at all seeing lots of new models after the drought caused by Chrysler's trip through bankruptcy last year.

"We're in desperate need of new product," says Wittrock, whose store sells all four brands--Chrysler, Dodge, Jeep and Ram. "The Grand Cherokee is the first new vehicle in a long time. I don't think that there's any number that would scare me away. We need some fresh faces on the lot."

The abundance of model offerings in the new plan marks a change of course for Chrysler's Project Genesis dealer consolidation strategy, which was designed to trim the dealer roster by combining all brands under one roof.

When the Genesis plan was introduced in early 2008 under the ownership of Cerberus Capital Management, Chrysler talked with dealers about whittling the number of nameplates to as few as 17 to get rid of badge-engineered clones such as the Chrysler Sebring and Dodge Avenger sedans. Chrysler still wants to get the dealership consolidation finished by the end of 2011.

But when Fiat S.p.A. assumed management control of Chrysler on June 10, 2009, CEO Sergio Marchionne reorganized Chrysler into brand-based business units.

Marchionne's new plan called for more nameplates adapted from Fiat platforms--and one more brand, Ram, for pickups and other commercial vehicles. Chrysler Group has firm plans for 22 nameplates for 2013, adding, for example, small and compact cars for Chrysler and Dodge and two vans for Ram.

The automaker will have 25 if it decides to replace the Dodge Nitro SUV and Dakota pickup and redesign the Dodge Viper sports car. Those three were still under consideration when the company revealed its product plan late last year.

Chrysler's product plan is meant to draw sharp distinctions between the brands, differentiating the vehicles so they appeal to separate groups of customers. For example, the 2011 Jeep Grand Cherokee is only available with five seats, while the Dodge crossover on the same platform will have seven.

Since Fiat took over, Chrysler has hired separate ad agencies for the brands, allowing each to chart a more independent marketing course. Before bankruptcy, the BBDO agency handled advertising for all the brands.

Dealer Martinez says he is optimistic. The recently redesigned Grand Cherokee has convinced him Chrysler is on the right track when it comes to products.

Martinez thinks the current lineup already demonstrates that two models can come from one platform and appeal to different buyers.

"There is a Dodge Charger customer and a Chrysler 300 customer," he says. "Rarely do they cross over. The Dodge Charger is a muscle car, a little sportier. The Chrysler 300 customer is a little more conservative, enjoys the luxury aspect. If there's enough differentiation, we'll have the best of both worlds."

Crowded stores?Chrysler Group could add as many as 8 more nameplates in its 4-brand dealerships.Chrysler Group plan under Fiat, 2013*22-25Chrysler Group lineup, current17Toyota-Scion, current19Ford-Lincoln, current21*Does not include Fiat and Alfa Romeo brands, which will be sold in a limited number of stores.

By Bradford Wernle- Automotive News