Chrysler still a ‘clunker’ despite billions in government aid

By Branko Brkic 28 October 2009

Chrysler’s tailpipe is still emitting clouds of smoke in the wake of a cash injection of billions of dollars of taxpayers’ money.

The stricken carmaker has been reminding its Jeep, Dodge and Chrysler dealers to always return phone calls and limit customer waiting times, and is generally seeking to put some colour back into its faded image. But it seems the new management is not following its own advice. Little has been said about plans to revamp its ailing products, with dealers struggling to unload unpopular models from their lots. Sales are down almost 40% versus 27% for the industry as a whole. The number of dealers has been slashed by 25%, and models are not rolling off the production line fast enough since Chrysler shut its factories through the summer. By contrast, General Motors has realised its image is hugely dented, and is running an advertising campaign that highlights the quality of its offerings, plus it’s giving a 60-day money-back guarantee. Yet Chrysler is only offering vague assurances that consumers will see sexier versions of the Jeep Grand Cherokee and its large sedan in the near future. Its existing line-up is full of flops such as the Sebring mid-size sedan and Aspen large SUV, and its Dodge counterpart, the Avenger, has hardly sold at all. The silence from new management, Fiat SpA, suggests the Italians were unprepared for what they found at Chrysler. New CEO Sergio Marchionne is supposed to announce his five-year game plan early in November, but he is keeping his cards close to his chest for now, compounding the uncertainty between Chrysler and dealers by frequent management reshuffles. And star of the old Chrysler show, deputy CEO Jim Press, is also on his way out. Even the Obama administration’s “Cash for Clunkers” programme, which encouraged Americans to buy fuel-sipping cars by providing subsidies to the tune of $3-billion, has largely bypassed Chrysler because it lacks fuel-efficient vehicles. And horror of horrors, some analysts say Chrysler’s new small- and mid-size range of vehicles will have Fiat frames and engines. Whether that strategy will see a pickup in the medium-term after September sales fell 42% and market share crashed to 8.3% from 11.1%,is anybody’s guess. But for now, the company is no Italian Stallion.

Read more: AP


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