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Only one minivan in Chrysler's future, no subcompacts for U.S. market

Mon, 10 Oct 2011

The Chrysler Group will offer just one minivan in the future--the Chrysler Town & Country--as part of a plan to end duplication in dealer showrooms and give each of its brands a strong and distinctive lineup.

Under the plan, the Dodge Grand Caravan minivan and Dodge Avenger mid-sized sedan will be replaced by a single crossover in 2013, Chrysler CEO Sergio Marchionne told Automotive News.

The Chrysler brand will get a replacement for the 200 sedan when the Avenger, its sibling, is replaced. Both the Chrysler sedan and Dodge crossover will be built on Fiat platforms.

"We cannot have the same type of vehicle in the showroom because the consumer is not stupid," Marchionne said. "We're not going to create the confusion and conflict in the showroom."

In an interview in Turin, Italy, Marchionne said he has decided against offering Chrysler and Dodge subcompacts, a departure from the company's November 2009 product plan.

That means the Fiat 500 will remain the group's lone subcompact in the United States for the next few years.

Eliminating duplicate vehicles was a guiding idea behind Project Genesis, a plan that evolved in 2008 under Chrysler's previous owner, Cerberus Capital Management.

With Genesis, Chrysler is consolidating four brands--Chrysler, Jeep, Dodge and Ram--under one roof, eliminating nearly all dealerships with fewer brands.

As of last week, 90 percent of Chrysler's 2,324 U.S. dealerships carried the four brands. Chrysler hopes to get more Genesis deals done this year. The company acknowledged that a few high-performing stores that carry only Dodge and Ram or Chrysler and Jeep are likely to remain open in metropolitan areas.

With the four brands under one roof, the company wants to eliminate duplication of badge-engineered siblings such as the Jeep Liberty and Dodge Nitro, Chrysler Sebring and Dodge Avenger and Chrysler Town & Country and Dodge Grand Caravan.

Chrysler hatched the Genesis plan to simplify life for customers--who face an array of 18 nameplates--and for dealers, who had to train their staffs to sell and service them.

Key elements of the plan

Here's how Marchionne's product plan is shaping up:

-- The Chrysler brand will get a replacement for the 200 sedan in 2013. The 200 name may remain. The sibling Dodge Avenger will disappear and Dodge instead will attempt to cover the mid-sized segment with a crossover--the same vehicle that replaces the Grand Caravan.

-- A second smaller Dodge crossover is planned to replace the current Journey. That vehicle will arrive after 2014.

-- Dodge will cover the compact segment with a four-door sedan, expected to debut at the Detroit auto show in January. The model will replace the outgoing Caliber hatchback. The Chrysler brand will offer a "sort of hatchback," Marchionne said, built on the same underpinnings used by the Dodge compact sedan. That car will be sold in Europe as a Lancia. The Chrysler brand will share many platforms with Lancia.

-- The next-generation full-sized minivan, due in 2014, will be offered only by the Chrysler brand. The crossover that Dodge will offer in lieu of a minivan is meant to appeal to Grand Caravan customers looking for space, flexibility and sportiness. "A crossover is more in line for Dodge to cover that segment than it is for anybody else to cover that segment," Marchionne said.

Through September, 85,830 Grand Caravans and 71,917 Town & Country minivans were sold in the United States.

Chrysler has tried to differentiate its two minivans--with prices, for instance. Late last year, Town & Country models were priced above $30,000 and aimed at upscale competitors such as the Honda Odyssey. The Grand Caravan was priced below $30,000 and was aimed at value shoppers.

Chrysler Group planners are trying to be careful. If they eliminate one minivan, they don't want to eliminate those customers also.

Subcompacts on hold

Marchionne also said Chrysler has shelved plans to offer Fiat-built subcompact models for the Chrysler and Dodge brands, originally planned to debut in 2013.

"Our assessment has been that subcompacts would have limited purview," he said.

That means the mainstream Chrysler and Dodge brands will have no vehicles to compete with the Chevrolet Sonic, Ford Fiesta, Honda Fit and Toyota Yaris. Chrysler Group's Fiat brand does offer the Fiat 500, but it is sold in a limited network of U.S. dealerships, about 150 by year end.

Marchionne said Chrysler would have to be "very, very careful" not to enter the subcompact market with a vehicle that it could not sell at a competitive price.

Marchionne is more open to offering Dodge or Chrysler subcompacts in Canada and Mexico.

"I can introduce them in Canada and Mexico [sourced from] other places in the world, but I would never center the U.S. as being the single largest driver of volumes. It won't happen."

Bradford Wernle contributed to this report

By Luca Ciferri- Automotive News