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Chrysler: Sales, Marketing, and Financial News

Old 10-13-2003, 10:14 AM
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Chrysler's Plan to Push Brand Upmarket Stymied

Price War Stymies Chrysler's Plan to Push Brand Upmarket


~Deeper discounts may be needed to attract customers, but charging more was a key part of the carmaker's turnaround strategy.


By Uta Harnischfeger and James Mackintosh, Financial Times


FRANKFURT, Germany — DaimlerChrysler's attempts to move its U.S. brand upmarket have been derailed by the fierce price war for new cars and could take twice as long as originally planned, the company has admitted.

The push to charge more for Chrysler vehicles was a key part of the turnaround strategy for the money-losing U.S. division, acquired in a $36-billion deal five years ago. But the long-delayed acknowledgment by DaimlerChrysler that improved models alone were not enough to attract customers raised the specter of deeper discounts and an extension of a profit-damaging price war.

"We have been too convinced that the attractiveness and the quality of our new [Chrysler] products and, partially, their improved technology, speaks so strongly for itself that it convinces the customers," said Manfred Gentz, chief financial officer.

Executives at Chrysler in Detroit confirmed that the group had been too optimistic in assuming it could push the brand upmarket within three to five years, or one generation of new vehicles.

"Here in the States people are very focused on the deal," said James Kenyon, a spokesman. "It makes it more difficult. It may double the time it takes."

The problems at Chrysler have led to widespread forecasts by analysts of an operating loss of several hundred million dollars this year, with a similar amount in one-time restructuring charges.

But Gentz insisted Chrysler had not yet given up on posting a positive operating profit in the full year. In the first half, it posted a $930-million operating loss.

Chrysler's failure to shift consumer perceptions of its brand has been reflected in a slow start to sales of the Pacifica, the first of a new wave of models produced under the tenure of Dieter Zetsche.

The crossover vehicle was overpriced when introduced this year, forcing dealers to offer discounts to move the Pacifica. The company was said to be contemplating stopping production for two weeks at its Windsor, Canada, factory.

In September, Chrysler sold 15% fewer cars than a year earlier, sharply contrasting with a 12% increase at General Motors and largely flat sales at Ford Motor Co.
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Old 10-21-2003, 08:25 PM
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Chrysler drags Daimler Chrysler's to an S&P credit rating downgrade

DCX profit below expectations

Reuters / October 21, 2003

DaimlerChrysler pensions shortfall 6.7 billion euros - 2003-10-21

FRANKFURT -- DaimlerChrysler reported a sharper-than-expected drop in profits on Tuesday, with problems at its ailing U.S. unit threatening its earnings outlook and leading to a downgrade of the German automaker's credit rating.

The world's fifth-biggest carmaker, battling to return its U.S. Chrysler unit to long-term profits, posted a third quarter operating profit of 1.25 billion euros ($1.46 billion), a 19 percent drop from a year ago and below analysts' expectations.

They fell sharply after credit rating agency Standard & Poor's cut Daimler's long-term corporate credit rating to BBB from BBB+ and assigned it a negative outlook.

"Although DaimlerChrysler continues to be well positioned in the global luxury and commercial vehicle markets, the risks posed by Chrysler have a significant effect on the overall credit profile of DaimlerChrysler," said S&P.

Equity investors also focused on Chrysler. "The numbers show they (still) have some problems and the problem is the U.S. market, concerning Chrysler," said Martin Sachsenmaier, a fund manager at Frankfurt Trust.

DaimlerChrysler, whose brands include Mercedes, Jeep and Freightliner, said it anticipated a gradual economic recovery in the fourth quarter which should stimulate the auto industry.

The company still aims to post a full-year operating profit of about five billion euros, down from 5.8 billion euros in 2002, but said "significant market risks" remained.

Its stock has lost over two thirds of its value in the five years since the $36 billion merger of Germany's Daimler-Benz and Chrysler, then the most profitable U.S. carmaker.

CHRYSLER RISKS

Chrysler returned to profit in the third quarter after a loss of 948 million euros in the second quarter. It is striving for a small operating profit this year, but says significant risks remain.

"We cannot rule out that we will not achieve that target," Chief Financial Officer Manfred Gentz said on a conference call,

Few analysts are convinced the goal is realistic.

"Chrysler will have to make a fourth quarter profit of 650 million euros if it is to make a small profit for the year as a whole. We view that as unlikely," said a WestLB Panmure analyst.

Chrysler, along with rivals General Motors and Ford Motor, is suffering from a profit-eroding U.S. price war, overcapacity and low productivity levels compared to Japanese rivals, which are hampering a return to sustainable profits.

"We believe that it is realistic that the aggressiveness in increasing incentives may calm down in the fourth quarter," said Gentz, adding that would help Chrysler's efforts.

Chrysler chief Dieter Zetsche, who has already cut about 20 percent of the unit's workforce in the last three years, has said he would step up his efforts and cut costs by a further $1 billion this year. But still many analysts think another deep restructuring might be needed.

Chrysler is banking on new products, including its new Dodge Durango sports utility vehicle (SUV) and the Pacifica, a minivan-SUV crossover which got off to a slow start earlier this year. It is launching 25 new vehicles in the next 36 months.

Mercedes, the company's earnings driver in the last three years, posted an operating profit of 793 million euros in the third quarter, roughly flat from a year ago. The unit expects flat profits this year and flat sales next year.

The trucks unit, also starting to see the rewards of restructuring in the last three years, saw its third quarter operating profit more than double to 237 million euros.

The company wrote down the value of its stake in aerospace group EADS by about two billion euros, a previously flagged move which pushed it to a third quarter net loss. Gentz said the write down may prevent the company posting a full year net profit.
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Old 10-22-2003, 10:41 PM
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Chrysler tackles product lineup;No. 2 exec to target development;discounts an option

Chrysler tackles product lineup

No. 2 exec to target development; discounts an option

By Ed Garsten / The Detroit News



AUSTIN, Texas -- Signaling the seriousness of Chrysler's continuing troubles and weak product lineup, the automaker's No. 2 executive, Chief Operating Officer Wolfgang Bernhard, is taking a more active role in managing product development.

Detroit's No. 3 automaker is also prepared to hike discounts, if necessary, to spur demand for cars and trucks -- a strategy it has stubbornly resisted, Bernhard said in an interview Wednesday with The Detroit News.

Desperate for Chrysler to turn a profit and disappointed by recent product launches that have been hobbled by unfocused advertising, Bernhard will be more involved in all phases of product development to help ensure top-notch quality, reliability and craftsmanship, he said.

Bernhard also will take a more public role in communicating Chrysler's product plans and features, after missteps with the launch of the Pacifica sport wagon earlier this year led to disappointing sales. Chrysler plans to introduce 25 products in the next three years -- nine in 2004 alone -- beginning with the redesigned Dodge Durango sport utility vehicle that goes on sale Nov. 15.

"I've been working with these things for three years," Bernhard said while driving through the Texas Hill Country west of Austin in the restyled Durango.

"How does it look? How does it feel? How does it ride? How does it sound?" he said.

"Now that these things are coming out, I will also be there to communicate it, get the message across, tell what these vehicles are all about, what they're supposed to be, what they're supposed to do."

To make time for his expanded product role, Bernhard is delegating 20 percent of his duties -- mainly related to cost-cutting -- to three executives: Eric Ridenour, Chrysler's top product development executive; Peter Rosenfeld, purchasing chief; and Tom LaSorda, who heads manufacturing for Chrysler, the U.S. unit of DaimlerChrysler AG.

"It's a great idea," Jim Hossack, an analyst with consultants AutoPacific said of Bernhard's new role. "If a guy like Wolfgang says, 'Who is the customer?' instead of focusing so much on cost reductions, that's good. Chrysler will build what people want to buy."

Bernhard came to Chrysler in November 2001 from Mercedes-Benz as CEO Dieter Zetsche's top lieutenant. He has primarily been responsible for executing the aggressive cost-cutting outlined in the company's three-year turnaround plan that called for slashing 26,000 jobs and closing six factories.

But Bernhard, 43, has also become known as a hands-on product guy, a trait on display at the Detroit auto show in January when he took the stage clad in black leather on the back of the Dodge Tomahawk, a 500-horsepower motorcycle that was the surprise hit of the show.

Bernhard sharpened both his operations expertise and his product sense at Mercedes, where he orchestrated the production launch of the S-Class sedan and led the growth of AMG, the luxury carmaker's performance division.

Facing an onslaught of popular new models from Asian, U.S. and European rivals, Chrysler has been criticized by dealers and industry analysts for not revealing more details about upcoming products, even though the company is counting on an array of new iron to stoke profits and reverse sales and market share losses.

The Pacifica, part of the automaker's effort to take the Chrysler brand upscale, suffered from an advertising campaign that did not make clear exactly what consumers could expect from the low-slung station wagon-like vehicle, and pricing that was higher than many consumers were prepared to pay for a Chrysler brand product.

Pacifica ads also failed to mention key features, such as safety advances, versatile seating and other comforts, that compared favorably to rival vehicles.

Pacifica sales are starting to rebound, but Bernhard is determined not to let the same thing happen with other new offerings.

While Chrysler has kept its vehicle plans under wraps, automakers such as Ford Motor Co. and General Motors Corp.'s Saab unit have tried to pique industry and consumer interest in new offerings by releasing sketches and photos of important future products well before they go on sale.

At the New York Auto Show in April, for example, Ford gave reporters a peek at the Futura, one of several sedans set to replace the Taurus. This week, Saab released a photo of the 9-2X, a performance compact that will be based on the Subaru WRX and go on sale next spring.

Bernhard declined to be specific about future Chrysler products in the pipeline, saying only that the Jeep line could be strengthened and that a diesel-powered Jeep Liberty will debut next year.

Along with new attention from Bernhard on product development and promotion comes a major shift in Chrysler's marketing philosophy.

Bernhard said the automaker is abandoning its aversion to aggressive incentives to boost sales.

Chrysler has participated grudgingly in the marketing war launched by GM two years ago to jump-start car and truck sales after the Sept. 11, 2001, terrorist attacks.

Chrysler's former marketing chief, James Schroer, preferred to promote Chrysler products as "aspirational."

He hoped to woo customers more interested in overall value than generous deals who would buy vehicles without demanding profit-eating rebates and low-rate loans.

It's a philosophy also favored by Zetsche. The tactic has failed, however.

Schroer was abruptly dismissed from his job in May and replaced by former Mercedes Benz executive Joe Eberhardt. In August, for the first time, Japanese automaker Toyota Motor Co. surpassed Chrysler in monthly sales, although Chrysler bounced back in September.

Chrysler sales are down 6 percent through September, while U.S. car and truck sales overall are down 1.6 percent. Chrysler lags rivals GM and Ford in incentives, averaging $3,429 in September, compared with $3,698 for Ford and $4,131 for GM.

"We'll be a player," Bernhard said. "That's how it has to be. If you're not participating, you're not being part of the market. If people like it, give it to them."

It's about time, AutoPacific's Hossack said.

"While GM may have gone overboard in promoting incentives," he said, "Chrysler may have gone overboard in minimizing its use of incentives."

Bernhard said $500 coupons are already being sent to owners of the current Durango that can be used toward the purchase of a new one.

Last week, Chrysler announced the sticker prices on the new Durango would be about $1,000 to $2,000 less than the previous model, depending on equipment packages. If sales lag, the automaker is prepared to put even more cash on the hood, Bernhard said.

Chrysler posted a slim $171 million third quarter profit, mainly by cutting material and structural costs, but the automaker is still $756 million in the red for the year.

But Bernhard said sales have been strong through the first few weeks of October, giving him guarded hope that Chrysler can still turn a profit for the year.

"Anything's possible," he said.


You can reach Ed Garsten at (313) 223-3217 or [email protected].




Incentive spree


What automakers are spending on discounts per model, year-to-date through September:

GM: $3,705

Ford: $3,278

Chrysler: $3,361

European brands: $1,961

Nissan: $1,350

Toyota: $965

Honda: $603

Industry average: $2,641
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Old 11-18-2003, 09:37 AM
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Chryslers 04/05 model lineup

from the car connection...

Chrysler Group, struggling under the weight of a stalled restructuring plan, divulged its full lineup of calendar-year 2004 new product launches along with several features and pricing details. Chrysler CEO Dieter Zetche has been on a multi-city tour talking up the new products to dealers. Zetche said he has upped the marketing budget for nine new products by $250 million from his original budget, though he declined to say what that was. Following this month's launch of the Dodge Durango SUV, the company will rollout: The SRT10 Ram pickup in January; PT Cruiser convertible in March; Wrangler Unlimited (long wheelbase) and Chrysler 300C in April; Dodge Magnum and Chrysler Crossfire SRT6 in May; Dakota pickup and Crossfire Roadster in September; Jeep Liberty refresh and all-new Grand Cherokee in November.

Some of the details:

- The 300C will be priced starting at about $25,000 for a 2.7-liter V-6, going all the way up to $35,000 for a 5.7-liter Hemi V-8 version. It will also be available in a 3.5-liter V-6 version.

- The Wrangler Unlimited is 15 inches longer than the standard Wrangler, with 12 inches behind the second seat for added cargo. The longer wheelbase, says Chrysler COO Wolfgang Bernhard, gives the Wrangler "much better road manners, less hop, but with no loss of off-road capability." The Unlimited also comes with a "Sunrise" soft top, which allows the front of the ragtop to be peeled back without removing the whole canvas.

- The 2005 Jeep Grand Cherokee is an evolutionary design, with a longer wheelbase and wider track, and easier egress through the doors. It also comes with a 5.7-liter Hemi engine. There is no third-row seat option. But Chrysler plans to launch a third-row seat SUV based off the Grand Cherokee in 2005 as a 2006 model, according to USA Today.

- A refreshed Jeep Liberty will more clearly differentiate the Liberty from the Renegade, a difference so far only seen in the addition of a light bar on top of the current Renegade. The 2005 Renegade has wheel-flare guards, skid plates, a heavier duty luggage rack and a light bar, lamp covers, as well as a front end differentiated from the standard Liberty.

- The Crossfire SRT-6 will pump 330 horsepower and go zero to 60 mph in just over five seconds. In a video Chrysler showed, the Crossfire SRT-6 bested the Porsche Boxster. The two-seat convertible Roadster edition will follow.

- The SRT-10 Ram achieves zero 60 mph in just over five seconds, pumps out 500 horsepower and 525 pound-feet of torque.

- Chrysler has scuttled any plans to produce the Jeep Scrambler, a Wrangler derivative that would have had a small pickup bed. "There wasn't a good business case for it," said Zetsche.

- Debuting at the North American International Auto Show in January will be two concept vehicles. The Dodge Slingshot has a three-cylinder engine that produces 95 horsepower, and gets 45 miles per gallon. It's hard to know what this concept could lead to. It seemed to be in the class of Mercedes-Benz's original Smart car. The other concept was the Jeep Rescue, an obvious attempt at answering the Hummer H2 with a huge Wrangler. Chrysler intends to answer Hummer's expected H3 SUV with a Wrangler-inspired SUV within a few years. And it is working out a business case for an entry-level Jeep to be priced below $20,000.

- Chrysler will also show a redeveloped minivan at the NAIAS, which will allow both the second and third rows of seats to fold flat to create a wide-open cargo area without removing the seats.

- Another highlight of the Chrysler showcase was the emphasis on proliferating the 5.7-liter Hemi V-8 in as many vehicles as possible. The Chrysler 300C, Dodge Magnum, Dodge Durango, and Jeep Grand Cherokee are all getting the Hemi. "Hemi has quickly become a sub-brand that people are willing to pay for," says sales and marketing chief Joe Eberhard. He expects Hemi-equipped 300Cs and Magnums to account for as much as 40 percent of sales volume or more.
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Old 11-18-2003, 09:49 AM
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Chrysler stresses power, prices

More effective pricing, more muscle under the hood are keys to new vehicle lineup

By Christine Tierney and Brett Clanton / The Detroit News


DaimlerChrysler AG's Chrysler Group will launch its most ambitious product offensive ever in 2004 with nine fresh Chrysler, Dodge and Jeep models that will tackle some of the pricing and horsepower concerns that have tarnished the automaker's recent vehicle launches.

Chrysler wants to improve sales and increase revenues by offering attractive cars and trucks with better quality and more safety, comfort and convenience features.

"Obviously we're coming up with competitive pricing," Chrysler CEO Dieter Zetsche said at a news conference Monday at Cobo Center that capped a whirlwind six-day, eight-city tour to roll out the company's vehicle plan to dealers.

The nine new models are part of a three-year product push that will see the introduction of 25 new vehicles as the automaker tries to rebuild profits and reverse sales losses and market share losses.

Struggling with few new high-volume products and a vicious price war, Chrysler has abandoned a goal to make $2 billion in 2003 but is still striving to show a small profit -- excluding exceptional charges. But most financial analysts expect the automaker to end the year in the red.

Monday's briefing for journalists was designed, in part, to demonstrate Chrysler's future product portfolio is well-stocked -- a concern among investors and analysts. However, the automaker banned photography to sustain consumer and media interest until the cars and trucks are formally introduced.

Next year, Chrysler will spend an additional $250 million on marketing to back the product onslaught, Zetsche said.

The nine models will account for 35 percent of Chrysler sales in 2004, and 60 percent of sales in 2005. Chrysler sold 2.2 million Chrysler, Dodge and Jeep brand cars and trucks in 2002.

Chrysler's U.S. sales are down 4.6 percent this year and its share of the U.S. market has slipped to 12.8 percent from 13.2 percent.

The Chrysler brand's new flagship, the 300 sedan, an upscale, rear-wheel-drive car coming out in April, will carry a base price of around $25,000 -- comparable to well-equipped models of the Toyota Camry and Honda Accord, America's best-selling sedans.

Customers will be able to drive off in the Chrysler 300C, a richly appointed version featuring a 340 horsepower Hemi V-8 engine, for less than $35,000.

Although Chrysler is stressing product features and value in marketing, the company has not repudiated its strategy to push the Chrysler brand upmarket by building better cars with more content, drawing on the resources of parent DaimlerChrysler, including Mercedes-Benz.

"It's not in contradiction to (our plan) to take the Chrysler brand, step by step, into a premium position," Zetsche said. "Over the long term, the image will change, and that might give us premium pricing. But it's not the starting point."

Dealers were impressed by the new model rollout, including a muscular new Jeep Grand Cherokee sport utility vehicle and a high-performance, 330-horsepower Crossfire SRT-6 convertible.

While praised for its good looks, the Crossfire came under criticism from car buffs at its spring debut because of its 215-horsepower engine, which is on the skimpy side for sports cars.

Chrysler's biggest stumble this year, however, has been the new Pacifica sport wagon. It got off to a slow start after Chrysler initially delivered richly equipped, all-wheel-drive models priced at more than $40,000 to appeal to premium car buyers -- too pricey for Chrysler's traditional buyers.

"As long as they can keep the product in the $30,000 to$35,000 range, they'll be successful," said Alan Helfman, a Houston dealer who sells Chrysler and Jeep vehicles. "You get too much around that $40,000 level, and it gets tougher."

Pacifica sales have since picked up and are now approaching Chrysler's goal of 100,000 units a year. The automaker had to rush a lower-priced version to market and dole out generous incentives that hurt its earnings to boost sales.

Analyst Stephen Girsky at investment bank Morgan Stanley said the new lineup seemed promising.

"It's new, it's fresh, it's different, and it seems like it's priced right," Girsky said. "But it's still rough out there. They're not the only ones launching new product."

Besides the Chrysler 300C, the automaker is launching the Dodge Magnum wagon based on the same rear-wheel drive platform, or underpinnings; a PT Cruiser convertible; a rugged Jeep Wrangler Unlimited with an extended wheelbase and more storage space; and a high-performance version of the popular Dodge Ram pickup, the SRT-10.

Next fall, Chrysler will introduce a diesel engine-powered Jeep Liberty. Around 30 percent more fuel-efficient than the current 3.7-liter gasoline powered V-6 SUV, the diesel model boasts a driving range of more than 450 miles.

Chrysler also hinted at possible future products with a trio of concept vehicles that will be showcased at the Detroit auto show in January.

The Jeep Treo, which debuted at the Tokyo auto show last month, is a futuristic-looking, fuel-cell powered vehicle designed to appeal to young buyers. A second concept, the Jeep Rescue, is a large Jeep outfitted as an emergency vehicle.

The Dodge Sling Shot is what Chrysler design chief Trevor Creed called the "opposite" of the Dodge Viper sports car, but just as fun. The Sling Shot is a small, light sports car with a three-cylinder, 90-horsepower engine designed to get 45 miles per gallon.

Over the past three years, Chrysler has boosted the initial quality and reliability of its vehicles by more than 30 percent, cut parts and material costs by more than 15 percent and boosted manufacturing productivity by more than 15 percent. Warranty cost have dropped 30 percent in the last two years.

"All that's very important, but it's all playing defense," Zetsche said. "Over the past three years, we've prepared the offensive, which is about product."

Dearborn-based Dodge dealer Joe Ricci said he was skeptical before he saw the product presentation but was won over. "Everything I saw was great. They have their game plan together," he said.

To minimize quality snafus and productivity losses that could result from so many launches, Chrysler has set up a high-level launch committee headed by Chief Operating Officer Wolfgang Bernhard to track input from dealers, product communication programs, pricing and other marketing issues.

"The responsibility for perfectly executed launches lies with all of us," Bernhard said.

You can reach Christine Tierney at (313) 222-1463 or [email protected].
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Old 11-18-2003, 11:36 AM
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Holy shit ... SRT6? Is that essentially the AMG SLK?
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Old 11-18-2003, 05:53 PM
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"The Crossfire SRT-6 will pump 330 horsepower and go zero to 60 mph in just over five seconds. In a video Chrysler showed, the Crossfire SRT-6 bested the Porsche Boxster. The two-seat convertible Roadster edition will follow."

I wonder which engine this will be... Could it be the one from the C32 AMG in a detuned form? Interesting though.
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Old 11-18-2003, 07:53 PM
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Originally posted by gavriil
"The Crossfire SRT-6 will pump 330 horsepower and go zero to 60 mph in just over five seconds. In a video Chrysler showed, the Crossfire SRT-6 bested the Porsche Boxster. The two-seat convertible Roadster edition will follow."

I wonder which engine this will be... Could it be the one from the C32 AMG in a detuned form? Interesting though.
Well, a SLK32 would make sense ...
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Old 11-19-2003, 07:02 AM
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Originally posted by charliemike
Well, a SLK32 would make sense ...
We already "have" an SLK 32 AMG out. What do you mean it would make sense?



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Old 11-19-2003, 05:09 PM
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Old 11-23-2003, 06:40 PM
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Chrysler shuffles marketing department

Sunday, November 23, 2003


Chrysler expected to shuffle sales arm

Retirement of veteran executive likely to trigger more changes

By Brett Clanton / The Detroit News



In the latest changes in Chrysler's marketing and sales division, Thomas R. Marinelli, a veteran marketing executive, is expected to announce his retirement as early as this week, according to people familiar with the matter.

Marinelli, 51, has been vice president of Chrysler's global brand center since June 2002. He oversees the marketing for Chrysler brand models, including the new Crossfire sports coupe and Pacifica sport wagon.

The departure comes as Chrysler's sales chief, Joe Eberhardt, undertakes an intensive review of the automaker's marketing operations.

"At this time, the Chrysler Group is evaluating its operations in marketing, sales and service to determine where we can create better efficiencies," said Debra Nelson, a Chrysler spokeswoman.

Marinelli's retirement is expected to prompt more executive moves within Chrysler's marketing operations.

Jeff Bell, vice president for Jeep marketing, and Julie Roehm, head of marketing communications for Dodge, are expected to get expanded roles under George Murphy, senior vice president of global brand marketing for the Chrysler Group.

Sources said as many as 25 to 30 other executives and managers may also retire from the automaker's sales and marketing operations.

Chrysler's marketing team has had several high-profile stumbles in the past year, including the launch of the new Pacifica sport wagon and a high-priced ad campaign featuring singer Celine Dion.

The Pacifica got off to a slow sales start, partly because of introductory prices that were considered high for the Chrysler brand, which Chrysler hopes to move upscale.

After a 28-year career in sales and marketing, Marinelli is retiring for personal reasons, according to people familiar with the matter.

In June, Eberhardt left DaimlerChrysler AG's Mercedes-Benz unit to join the Chrysler Group as executive vice president of global sales and marketing, replacing Jim Schroer, who abruptly resigned in May and had been in the post since Feb. 2001.

A possible reorganization and streamlining of the company's marketing department has been "of particular interest" to Eberhardt since he arrived, Nelson said, declining to give more details.

Chrysler, hampered by an aging product lineup and bruised by a costly pricing war, will struggle to break even this year, analysts say. Combined sales of Chrysler, Jeep and Dodge models are off 5 percent so far this year.

Analysts said Eberhardt has now had enough time to examine the automaker's sales and marketing operations and find more savings.

"It first appeared Eberhardt would have to redecorate to make himself comfortable in his position," said Jim Sanfilippo, executive vice president of AMCI, a Warren-based automotive consulting and marketing firm.

But Sanfilippo said Eberhardt is likely to keep the team he has and "flatten it out a bit."

Marinelli joined Chrysler in 1975 as an administrative trainee in the company's Boston, Mass., sales region. He worked his way up, earning titles such as vice president of marketing for Chrysler Canada and president of Chrysler Jeep Automotive in Brussels before stepping into his current role.

Chrysler is scheduled to launch nine new vehicles next year and 25 new models over the next 36 months. With such a full plate, Eberhardt needs to rally dealers and make his team "faster afoot," Sanfilippo said.

Just last week, Chrysler unveiled several new models to dealers and journalists.

Tom McInerny, a Chrysler-Jeep dealer in Woodhaven, is impressed with the new lineup. "It is extraordinary," he said.

You can reach Brett Clanton at (313) 222-2612 or [email protected].
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Old 12-02-2003, 04:22 PM
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Daimler Chrysler Takeover Trial

DCX: Takeover statement was planned

Automaker says Schrempp wanted to show strategist was in charge of struggling Chrysler

By Lindsay Chappell
Automotive News / December 01, 2003

WILMINGTON, Del. -- If only Juergen Schrempp could take back those words.

The DaimlerChrysler CEO's now-infamous interview with Britain's Financial Times newspaper three years ago remains the lifeblood of a civil trial that opened here Monday.

A nine-member legal team for billionaire investor Kirk Kerkorian says the Schrempp interview was his public admission that Daimler-Benz AG cheated Kerkorian on the sale price of his 89 million shares of Chrysler Corp. stock in 1998. A 10-member legal team for DaimlerChrysler says the argument is nonsense.

But in a trial that will run for the next two weeks, Kerkorian is asking U.S. District Court Judge Joseph Farnan Jr. for at least $1 billion in compensatory damages over a stock deal Kerkorian's lawyer Terry Christensen Monday called "fraud. Plain, old-fashioned fraud."

How could one little interview be so powerful?

According to lead attorney Christensen, Schrempp's October 2000 comments revealed that Daimler never intended to share management with Chrysler in the "merger of equals" partnership the two automakers promised. Instead, Christensen told the court, Daimler intended all along to acquire Chrysler and make it a division of the German corporation -- a proposal that should have fetched a higher sell price for Kerkorian's 13.7 percent interest in Chrysler.

Schrempp himself is expected to take the witness stand Tuesday to respond to the charge that he duped Kerkorian and other shareholders. In the Financial Times interview, Schrempp was quoted saying, "The structure we have now, where Chrysler is a division, like Mercedes cars or like Mercedes trucks, was always the structure I wanted. We had to go a little bit in a round about way, but that has to do with negotiations and with psychology and things like that."

A PR moment

Observers have wondered for three years why Schrempp would utter such a comment -- especially when, as it was revealed Monday, the British newspaper provided DaimlerChrysler with its interview questions days in advance. On Monday, DaimlerChrysler attorney Jonathan Lerner explained the comments as a public relations move at a time when the two merged automakers were in trouble. DaimlerChrysler's board had just received the bad news in the fall of 2000 that it faced losses of $7 billion over three years, and the company wanted to reassure investors that Schrempp was a man with a strategy.

"When The Financial Times called seeking an interview," Lerner explained to the court, Schrempp "granted it in an attempt to reassure employees and the market that someone with foresight was in charge, and that there was a plan for the integration that would yet provide the financial benefits -- the synergies -- anticipated."

Lerner charged that Kerkorian's lawsuit was simply a ploy to get DaimlerChrysler to add a premium onto the $3 billion in profit he already made from the DaimlerChrysler merger.

"In reality," Lerner said, "this lawsuit has nothing to do with any alleged misrepresentation or 'merger of equals' label. The case is about DaimlerChrysler's sagging stock price and a powerful investor who held some of his stock too long. It's about a billionaire used to snapping his fingers and having Chrysler's chairmen jump."

On the stand Tuesday

Set to take the witness stand Tuesday in the case of billionaire investor Kirk Kerkorian versus DaimlerChrysler AG:


Juergen Schrempp, chairman and CEO of DaimlerChrysler AG

Kirk Kerkorian, Beverly Hills billionaire and largest individual shareholder in DaimlerChrysler

Jim Holden, former DaimlerChrysler Corp. CEO


Source: Automotive News
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Old 12-02-2003, 04:23 PM
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Kerkorian testifies in DCX trial
Reuters / December 02, 2003

WILMINGTON, Del. -- Billionaire investor Kirk Kerkorian told a U.S. court on Tuesday that the 1998 creation of DaimlerChrysler, one of the biggest deals in automotive history, was based on "deception" and "fraudulence."

Kerkorian's testimony came on the second day of the trial in U.S. District Court in Wilmington, Del., where he and his investment firm, Tracinda Corp., are seeking to prove that what Daimler-Benz executives pitched as a "merger of equals" was actually a secret takeover of Chrysler by Germany's oldest automaker.

The 86-year-old Las Vegas casino operator, who owned 13.7 percent of Chrysler Corp. shares before its $36 billion link-up with Daimler-Benz, is demanding more than $1 billion in compensatory damages. He contends that Daimler hid its true intentions in order to avoid paying a higher premium for Chrysler's shares.

DaimlerChrysler has repeatedly denied any wrongdoing. But Kerkorian says he was duped into believing that the merger would create two semi-independent companies with headquarters in Germany and Michigan.

His lawsuit was filed after Juergen Schrempp, architect of the 1998 deal, told The Financial Times in October 2000 that he had always meant to make Chrysler a mere division of a new global automotive giant.

In his testimony, Kerkorian said he was "very surprised, very upset" when he read the interview.

Asked by Tracinda lawyer Terry Christensen why he was upset, Kerkorian replied: "It was deception. I got more upset when Holden was fired. Two people came out from Stuttgart and just took over Chrysler. I think that's when I called you."

He was referring to former Chrysler boss James Holden, who was ousted in November 2000 and replaced by Daimler executive Dieter Zetsche as German managers exerted increasing control over the third-largest U.S. automaker.

In his opening statements on Monday, DaimlerChrysler lawyer Jonathan Lerner contended that Kerkorian was never concerned about whether Germans controlled the merged company. He also alleged that Kerkorian had been anxious to sell his Chrysler stock before an anticipated fall in its value.

'DECEIT AND FRAUD'

But Kerkorian, who launched his own hostile takeover bid for Chrysler in the mid-1990s, disputed those claims. He spoke clearly but slowly, but the courtroom heated up when Lerner questioned him about his sometimes turbulent past as Chrysler's largest shareholder.

"You are representing a client who is in deceit and fraud, Daimler, and you're treating me the same way and I don't like it," Kerkorian snapped at one point during his cross-examination.

DaimlerChrysler, which has lost two-thirds of its market value since the merger deal was announced, settled a parallel lawsuit with a separate group of former investors for $300 million in August.

That was one of the largest out-of-court deals ever reached by U.S. shareholders.

Asked by Christensen whether it was possible to realize the synergies of a merger if one company takes a dominant position, Kerkorian replied: "No. You have to have trust and honesty. If you get deceit, fraudulence, it doesn't work."

In addition to Schrempp, current and former executives ordered to appear and testify at the trial include Holden, DaimlerChrysler CFO anfred Gentz and Robert Eaton, who was the chairman of Chrysler when Schrempp clinched what he hailed as a "marriage made in heaven."

Source: Automotive News
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Old 12-08-2003, 09:31 AM
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Chrysler struggles to 'put up or shut up'

Chrysler struggles to 'put up or shut up'

By David Kiley, USA TODAY

DETROIT — As the DaimlerChrysler-Kirk Kerkorian battle over the 1998 melding of Daimler-Benz and Chrysler plays out in a Delaware court, Chrysler Group CEO Dieter Zetsche is back here trying to get Chrysler on track with a string of new models.
The two automakers called DaimlerChrysler a "merger of equals" when they announced it. Kerkorian, who owned about 14% of Chrysler stock at the time, says it was a takeover, plain and simple. In a takeover, shareholders of the acquired company usually get a premium over what they would get in a merger. Kerkorian says calling it a merger rather than a takeover shorted him $3 billion.

The judge hearing Kerkorian's lawsuit will decide whether it was a merger or a takeover. But it has been clear for some time that Daimler-Benz was the healthier and better run of the two companies, and that Chrysler, with runaway costs and bloated payroll, was likely headed for bankruptcy court or a fire sale without Daimler's deep pockets.

Today, Chrysler is struggling to make a profit. That may not happen this year. And profit will be scant at best next year, partly because the automaker is launching 10 products by the end of 2004, a costly venture.

The 10 are the first of 25 new models coming in 36 months. If that barrage is successful, it could resuscitate Chrysler. If not, it could force Chrysler into a downsizing that could eliminate product lines, like Dodge and Chrysler cars, and force a consolidation with struggling Mitsubishi, in which DaimlerChrysler has controlling interest.

"If profits and market share don't materialize by the end of 2004 with these new products, we may start to see signs of the white flag," says auto industry analyst Joe Phillippi of AutoTrends.

Looking back

Zetsche admits that in the three years he and his team have been struggling to turn Chrysler around, they have made errors in launching models and developing an incentive strategy.

Specifically:

•They blew the launch of the Chrysler Pacifica touring wagon. The three-row Pacifica went on sale last spring at nearly $37,000, hefty for a non-luxury model. After a few months, a $3,000 rebate kicked in. A cheaper version without all-wheel drive was rushed to dealers with a sticker starting under $30,000. And a still-cheaper two-row version is being hurried along.

"You can't price a car based on your costs. You have to price it to the market, and we ignored that principle," Zetsche says.

•They have let General Motors set the incentive pace each month. Chrysler typically followed GM by a week, then took another week to get the message to dealers and consumers. Zetsche, who admits GM has had Chrysler on its heels for two years, recently gave dealers a three-month incentive plan with room to increase deals the same day.

Zetsche hates rebates and is committed to reducing them. The all-new Durango sport-utility vehicle is priced $2,000 cheaper than the old one and carries no rebate, an attempt to preserve profit and resale value. But comparable Chevy TrailBlazers and Ford Explorers carry $3,000 rebates, undercutting the Durango's price by at least $2,000, depending on options.

If the Durango gets a $2,000 rebate after a few months, Zetsche's pricing gambit will hammer profit unless he jacks up prices and rebates at the same time, which has been GM's strategy.

"It's almost impossible to not have rebates in a high-volume, ultracompetitive segment like midsize SUVs," says GM North America chief Gary Cowger.

"Customers look for rebates like they were standard equipment, but we have to start somewhere to break the cycle," says Joe Eberhardt, recently named Chrysler sales and marketing chief.

Many of the new products reflect how DaimlerChrysler is trying to spread the panache of its Mercedes-Benz luxury brand to Chrysler. Chrysler is just now delivering to dealers the $34,000 Crossfire coupe, built off the bones of a Mercedes CLK.

Ways the Mercedes connection is felt:

•Rear drive. Crossfire, as well as Chrysler 300C sedan and Dodge Magnum wagon due in 2004 and a Dodge sedan due in 2005, are rear drive, which makes for better handling and is held dear by Mercedes. Although the USA is a mostly front-drive market, Chrysler COO Wolfgang Bernhard says the rear-drive cars will be embraced in Southern states and California, while snow-state buyers will opt for the all-wheel-drive option for better traction.

•Interiors. Bernhard and chief designer Trevor Creed are determined to put Mercedes-level interiors in the new models. The bad news: GM and Ford Motor are doing new interiors just as nice.

Despite the new models — and no one denies that Chrysler needs them — marketing experts warn that it will take two generations of new product to get people who don't shop Chrysler brands now interested again.

Hanging over DaimlerChrysler is the question of whether a company can effectively play in both the luxury and mass markets. Rival BMW found it was a bad mix and sold off the British Rover Group, except for Mini, in 2000. BMW's profit margins rebounded right away. "You can't serve both ends of the market and maintain your profitability," says BMW Chairman Helmut Panke.

On whether the merger still looks like a good idea, Zetsche, a Daimler-Benz veteran, says Daimler would have remained healthy without Chrysler. But Chrysler's viability without Daimler is "far more questionable."

Bernhard, who will personally manage logistics and marketing of the launches in 2004, doesn't like the question and has a simpler verdict: "It's time for us to put up or shut up."
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Old 02-02-2004, 08:23 PM
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Meet the new Chrysler. Again.

Monday, February 2, 2004


Chrysler shifts focus of ads

Campaign broadens brand message, coincides with new vehicle launch

By Brett Clanton / The Detroit News




Meet the new Chrysler. Again.

An all-new advertising campaign for Chrysler brand vehicles is set to debut in March that will replace the year-old “Drive & Love” marketing push that was meant to position the brand as upscale, yet affordable, according to Joe Eberhardt, executive vice president of marketing for DaimlerChrysler AG’s Chrysler Group, which includes the Chrysler, Dodge and Jeep brands.

The new campaign will sell the same idea, but take a different approach, Eberhardt said.

“It’s a continuation of our strategic repositioning of Chrysler, and from that perspective, it’s not a new message,” Eberhardt said. “It’s maybe a more stringent interpretation of what that message was supposed to be in the first place.”

Eberhardt said past ads failed to explain that Chrysler vehicles were getting more premium content and did not adequately prepare consumers for higher sticker prices on cars such as the Pacifica sport wagon.

Sales of the Pacifica got off to a slow start when the vehicle debuted last year, in part because Chrysler introduced the most expensive versions first. Consumers were unwilling to pay a luxury price — $40,000 or more — for a vehicle wearing a mass market badge.

“It’s our own fault,” Eberhardt said. “We lost that message in communicating to the marketplace. Everyone thought we wanted to go up-market and luxury, and all that. I think we’re going to relook at how we get this message across.”

The release of new Chrysler television commercials and magazine ads will be timed to coincide with the expected March launch of the brand’s 300 Series sedan. Touted as Chrysler’s new flagship, the 300 will sell for between $24,000 and $33,000.

The new marketing replaces the “Drive & Love” campaign, which was launched by former Chrysler marketing chief James Schroer and never really caught fire. The slogan was changed from “Drive=Love” after Chrysler signed pop diva Celine Dion to anchor ads that were widely criticized by dealers for not focusing enough on the products.

The first Dion-centered ad debuted during last year’s Super Bowl. Beautifully photographed in black-in-white, the spot left many viewers wondering what the commercial was promoting.

“Celine is a great singer,” said Alan Helfman, owner of River Oaks Chrysler Jeep in Houston. “But you got to show the cars.”

Eberhardt hinted at the creative content of the coming campaign, but offered no details.

“I wouldn’t say (it will have a) celebrity,” he said. “But it could be music and other stuff.”

Jack Key, a Chrysler dealer in Las Cruces, N.M., will be happy as long as the new advertising broadens the Chrysler brand message.

“We never have trouble bringing our loyal customers back,” he said. “We just need to go after some of the younger generation.”

The Chrysler brand marketing relaunch comes as the Chrysler Group plans to launch nine new vehicles this year as part of a product blitz that will bring a total of 25 new vehicles to market over the next 36 months.

“We will attack virtually every segment of the auto market — with a heavy emphasis on car-based vehicles that will account for more than half of our new vehicles over the next three years,” Chrysler CEO Dieter Zetsche said Saturday in a speech to the National Automobile Dealers Association in Las Vegas.

New Chrysler brand products coming out in 2004 include the PT Cruiser Convertible, landing in dealerships now; the 300 sedan, coming next month; a redesigned Town & Country minivan, also due in March, and a convertible version of the Crossfire sports car debuting this spring. The rest of the nine new models will be Jeep and Dodge vehicles.

Eberhardt said Chrysler will invest more to promote the launch of the 300 compared with other upcoming models because the sedan will have such a prominent position in Chrysler’s lineup. He declined to be more specific.

The Chrysler Group added $250 million to its marketing budget and $30 million to its public relations budget to support new vehicle launches in 2004. Eberhardt said the company is still deciding whether to renew the allowance for 2005.

Brett Clanton can be reached at (313) 222-2612 or [email protected].
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Old 02-02-2004, 08:33 PM
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Chrysler chief vows 'no fear' about Toyota

Chrysler chief vows 'no fear' about Toyota

Sun February 1, 2004 12:25 AM ET

LAS VEGAS, Jan 31 (Reuters) - The head of DaimlerChrysler's (DCXGn.DE: Quote, Profile, Research) (DCX.N: Quote, Profile, Research) Chrysler division said on Saturday he wasn't worried about the possibility that Toyota Motor Corp. (7203.T: Quote, Profile, Research) will overtake it as the third-largest automaker in the United States.
"I definitely don't fear Toyota selling more or less than we do," Chrysler chief executive and President Dieter Zetsche told a news conference on the sidelines of the National Automobile Dealers Association's annual convention.

He spoke after recent results showing that Toyota had unseated Ford Motor Co. (F.N: Quote, Profile, Research) as the world's second-largest automaker last year. His remarks were also prompted by a Reuters interview on Friday in which a senior Toyota executive predicted the Japanese juggernaut would grab more U.S. market share this year.

"We have growth plans as well ... volume plans," Zetsche said.

Chrysler, which is struggling to return to long-term profitability, saw its share of the U.S. market dip 0.3 percentage point to 12.7 percent last year. Toyota's share, while still a long way off, continued the seemingly relentless march it has enjoyed for decades to rise 0.8 point to 11.2 percent.

In the hypercompetitive U.S. market every sliver of share is fought over tooth and nail or bolt by bolt.

"If you add up the sales plans of all manufacturers in the U.S. for this year, like for the past years, you would end up with -- I don't know -- 120 or 130 percent market share," said Zetsche, mocking not just Toyota but other automakers forecasting near-term growth in their hard-fought U.S. market share.

"I don't expect that they (Toyota) will surpass us, but if so that's a nice headline for you but not a major concern for us," he said.

Toyota, the biggest and most profitable of Japan's Big Three automakers, has set a goal of seizing 15 percent of the world's car market some time in the next decade, from about 11 percent now.

While that would likely leave Chrysler in the dust in the United States it could also could put Toyota ahead of General Motors Corp. (GM.N: Quote, Profile, Research) as the biggest automaker anywhere around the globe.
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Old 02-02-2004, 08:44 PM
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the Drive and Love thing came off as entirely too feminine for my tastes. probably scared off alot of potential buyers.
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Old 02-02-2004, 09:14 PM
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I agree with ItalianStallion, theres no way that a little marketing is going to sell an expensive car and give the brand an image of being upscale, and the image given off was really gay
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Old 02-02-2004, 10:20 PM
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lose celine and get beyonce
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Old 02-03-2004, 06:23 PM
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Another case of Big three attitude.

I read somewhere a while ago where the president of Cadillac said that their goal was to become the world standard within 10 years.
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Old 03-04-2004, 04:49 AM
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Dion's role with Chrysler shrinks

Thursday, March 4, 2004


Dion's role with Chrysler shrinks

Singer won't be in ad campaign but will do public service spots

By Brett Clanton / The Detroit News





Despite a three year, multi-million dollar contract, Celine Dion’s moody TV ads for Chrysler won’t be going on and on.

DaimlerChrysler AG’s Chrysler Group has yanked pop star Celine Dion from its advertising as the automaker prepares to launch a new marketing campaign for the Chrysler brand.

A series of Dion-centered ads last year designed to reposition Chrysler as a premium marque were widely considered a flop.

“We’re just moving into an exciting new direction,” Chrysler spokesman David Barnas said Wednesday. “I’m not at all saying she wasn’t a good fit.”

Barnas said the new ads will focus more on the product.

Dion will continue her relationship with Chrysler. The automaker began filming public service ads Monday about keeping kids safe in vehicles that star the Canadian chanteuse.

The safety ads debut March 25 on radio and TV and are cosponsored by the National Safety Council. Because they are public service announcements, they will not mention Chrysler by name.

Giving Dion the lower-profile role may be a good way for Chrysler to shift focus yet still get mileage from her contract, said Michael Bernacchi, a marketing professor at University of Detroit Mercy.

“They paid her $14 million,” he said. “They (have to) get something out of it.”

Barnas said the safety spots are simply “the next phase” of the automaker’s alliance with Dion.

In 2002, Chrysler inked a three-year deal with Dion reportedly worth $14 million to sponsor her five-night-a-week show at Caesar’s Palace in Las Vegas and to feature Dion and her music in Chrysler ads. Chrysler will continue to sponsor Dion’s Las Vegas show, Barnas said.

Chrysler launched the first Dion ad, called “Pacifica Performance,” in January 2003 to promote the company’s Pacifica sport wagon. The ads were shot in black-and-white and featured Dion’s single, “I Drove All Night.”

Dealers and analysts criticized the campaign for being more about the star and less about the cars.

“She just did not connect with (DaimlerChrysler) or their brands at all,” Bernacchi said. “It just wasn’t a good match.”

You can reach Brett Clanton at (313) 222-2612 or [email protected] detnews.com.
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Old 03-07-2004, 01:02 AM
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SHOCKING !!!!!!!!!!!!!!!
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Old 03-07-2004, 04:31 PM
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Those commercials were annoying.
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Old 03-09-2004, 05:39 AM
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Chrysler ads refocus on cars

New back-to-basics approach on airwaves shuns celebrities, trumpets vehicles, prices

By Brett Clanton / The Detroit News


No celebrities. No rock music. No jokes. Just the cars.

DaimlerChrysler AG’s Chrysler Group is taking a back-to-basics approach with new advertising hitting the airwaves this month for its Chrysler brand.

Unlike a previous campaign built around pop star Celine Dion that was criticized for being vague and needlessly celebrity-driven, the new ads trumpet specific vehicle attributes, showcase vehicles on the road and talk about price.

At the same time, the campaign is meant to evoke Chrysler’s heritage as an upscale yet affordable vehicle brand, a message company officials say has been diluted as the brand evolved.

While Dodge and Jeep have well-defined brand images, the Chrysler brand has struggled to find its niche in a crowded market.

Chrysler is counting on several critical product launches this year, including the Chrysler 300 Series sedan and a redesigned Town & Country minivan, to lay the groundwork for a gradual repositioning of Chrysler from middle-class marque to premium brand.

“Actually, I don’t know if it’s a re-anything,” Jeff Bell, vice president of marketing for the Chrysler brand, said Monday.

“The one thing all great brands in America have is a certain equity, and Chrysler has equity in the United States. And when people see it, they don’t have to rehash anything. It’s just right. They go: Yes!”

The ads introduce a new slogan, “Inspiration Comes Standard,” that’s meant to recall the Chrysler brand’s past as an innovator of such products as the minivan, Bell said.

The slogan replaces “Drive + Love,” which never caught on with consumers.

The first three ads, which started Saturday, include spots that feature the entire Chrysler lineup, the Town & Country minivan and the Pacifica crossover vehicle.

To drive the innovative product message home, the minivan ad focuses on second-and-third-row seats that fold flat into the floor.

The Pacifica spot heralds the wagon’s safety attributes, including a five-star crash test rating, and asks the question, “Can inspiration go beyond the SUV?”

Spots for the Chrysler 300 Series sedans, including one dedicated to the top-of-the-line 300C model equipped with a V-8 Hemi engine, will be launched this spring, as the cars arrive in dealerships.

They are expected to focus on the 300’s engineering offerings, such as electronic stability control, and the return of rear-wheel drive technology in a big Chrysler sedan.

Striking the right chord with the 300 ads will be especially important, said Jim Sanfilippo, an analyst with AMCI, a Farmington Hills-based consulting firm.

The launch of the upscale 300, which starts at under $24,000, is “not just a watershed moment for Chrysler but a watershed moment for the entire industry,” Sanfilippo said.

By pricing a luxury vehicle so low, “Chrysler is now doing something the other domestics have been unwilling to do.”.

Getting consumers to pay attention will be the challenge, he said..

Chrysler brand sales fell 3.5 percent in 2003, but have been rising in recent months. Chrysler Group officials hope a nine vehicle new product blitz this year, which includes four new Chrysler models, will boost the brand’s sales numbers and its image.

Chrysler launched a marketing campaign last year featuring Dion that was designed to give the brand a more premium feel.

But Chrysler had only a couple of new vehicles to back up the claim — the Pacifica and Crossfire sports coupe.

With both priced above $35,000, the vehicles represented too big a leap for many customers who had come to think of Chrysler as a value brand.

With the 300 and other new vehicles, Chrysler finally has the product offerings to make the case, said Dennis Virag, president of Automotive Consulting Group Inc. in Ann Arbor.

“You don’t turn the ship around overnight. You do it one vehicle at a time,” Virag said.

You can reach Brett Clanton at (313) 222-2612 or [email protected].
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Old 03-26-2004, 08:08 AM
  #25  
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Chrysler will Not offer Leases in NY State

From Canadiandriver.ca

Farmington Hills, Michigan - Chrysler Financial announced it will no longer offer leasing in the state of New York beginning May 1, 2004. According to Chrysler, New York remains the only state in the U.S. with antiquated unlimited lessor vicarious liability law.

Under the existing law in New York the "owner" of a motor vehicle is responsible for personal injury and property damage caused by the driver of a leased vehicle, regardless of any fault or responsibility of the leasing company. With leasing, the finance company holds the title to the vehicle and therefore has significant exposure under the existing vicarious liability statutes.

"The current legislative environment in New York has forced us to exit based on the significant financial exposure we risk if we continue to offer leasing in this market," said Klaus Entenmann, Vice President - Chrysler Financial. "Chrysler Financial has made every effort, along with the New York State Automotive Dealers Association and the Alliance of Automotive Manufacturers, to encourage changing legislation in the state of New York to no avail," said Entenmann.

While leasing will cease to be an option available for customers in New York, Chrysler Financial may reenter the leasing market if meaningful reform is forthcoming from the New York legislature.

Will anyone else follow?
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Old 03-26-2004, 08:50 AM
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The loses must be greater than what they make on the leases. That is one of the stupidest laws I've heard of.
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Old 03-26-2004, 08:59 AM
  #27  
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This is still pretty strange to me. Whats the popultaion in NY State? Chrysler sales are going to get killed when they demand people buy the car. Especially their higher end cars.
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Old 03-26-2004, 10:22 AM
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Problem is that the group with the authority to change this neanderthal law is made up of guess who? Yup...lawmakers who are lawyers on the side. Actually it's more like lawyers who are lawmakers on the side. Talk about totally and blatantly ignoring the good of the masses for your own self interest!
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Old 03-26-2004, 12:19 PM
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I'm sure there will be plenty of leasing companies left. The only thing that will change is that local Chrysler dealer can't give you his own deal, he'll have to sell you someone elses'.
I wonder if this means that MB will be doing this too? That might be more troublesome since such a high portion of those cars are leased. Of course the typical MB driver will have enough insurance that the lease company won't have to worry as much about the law coming after them.
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Old 03-26-2004, 12:38 PM
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Re: Chrysler will Not offer Leases in NY State

Originally posted by domn
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Will anyone else follow?
Honda had just resumed leasing in NY. It stopped allowing leasing in NY a few months earlier for the exact same reason.
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Old 03-26-2004, 01:26 PM
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If you read most TV ads about lease programs from all the major brands in the US, they usually include a little disclaimer on the bottom about excluding NY and another state. It's strange that it takes so long to change a law that is so obviously outdated... history on this law...

So back in the day, when cars were a new-fangled machine and whatnot, normal people couldn't possibly afford them, let alone insure them. But some of the jobs just required the use of this 'auto carriage'. So NY passed this law so that big companies could have many drivers use their vehicles without the need for individual insurances, with the company taking care of the ownership of the car.

It's funny how old laws backfire in the long run. I think the State of Colorado just rid itself of an old law they had since the pioneer days. The law was that anyone found guilty of stealing a horse from another person and leaving them stranded was eligable for the death penalty.

Junkster, who wonders what other silly outdated laws there are.
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Old 03-26-2004, 04:15 PM
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Originally posted by Junkster
It's strange that it takes so long to change a law that is so obviously outdated... history on this law...
The law did come up for review last year. The lawyers/lawmakers decided to keep it and not overturn it. Someone needs to bring this up for arbitration!
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Old 03-26-2004, 11:19 PM
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There is a way around it, what Honda/Acura and others have done is very similar to a lease, instead, at the end of the loan it requires a balloon payment, or the car back, so you make a loan for the differnce in residual value at the time period you do this.

The ONLY big difference is that the consumer OWNS the car (title is in customers name, not leasing company). This gets around the lease law liability and affords the customer the same payment options as a lease (but uses your credit up, as you own the whole car).

It works.
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Old 03-16-2015, 05:19 PM
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Dodge suspends orders for Hellcat models

Demand has outstripped supply/capacity selling at nearly double the forecasts, which I guess is a good problem to have -

Dodge SRT Hellcat Orders Suspended to Catch Up With Demand
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Old 03-16-2015, 07:07 PM
  #35  
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I believe they were only planning on building 4k for each model for 2015.

Dodge always warned dealers not to fuck around with this car, no markups, etc.

Then Dodge publicly warned buyers against shady dealers.

And now Dodge has to sort through all the BS. In the interim...markups and secondary market on these cars is going to sky rocket.
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Old 03-16-2015, 09:42 PM
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Wow, talk about supply and demand......
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Old 03-17-2015, 10:20 AM
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My friend has a lot of inside knowledge with the auto industry and was told by those at Dodge that they would build as many as demand needed (they really werent going to put a cap or limit), they werent expecting supply shortages
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Old 03-17-2015, 01:58 PM
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Originally Posted by fsttyms1 View Post
My friend has a lot of inside knowledge with the auto industry and was told by those at Dodge that they would build as many as demand needed (they really werent going to put a cap or limit), they werent expecting supply shortages
Dodge always said limited production, same as the insider I had from Dodge, but this was in the very beginning.

It would be silly for Dodge to not change their minds on this one as that car is completely in demand right now.
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Old 03-17-2015, 02:45 PM
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I hope they build tons so that the secondary market for them will be big down the road.
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Old 03-17-2015, 09:45 PM
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Originally Posted by CCColtsicehockey View Post
I hope they build tons so that the secondary market for them will be big down the road.
You and me both...I would love to own another one, one day.
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