Dodge Dart Gets New Life in Biggest Test for Fiat-Chrysler: Cars

The Dodge Dart was a hit in the 1960s, known for its tail fins and low price. Now Chrysler Group LLC, using technology from its savior Fiat SpA (F), is bringing back the car to carry the company into the future.

Yes, the Dodge Dart. The car last produced in 1976.

Chrysler will unveil a new one today, and when the compact model goes on sale starting at $15,995 this year it will be the biggest test of the 2 1/2-year Fiat-Chrysler relationship. The Turin, Italy-based company boosted its Chrysler stake last week by committing to build a 40 mpg Dart in Belvidere, Illinois.

Sergio Marchionne, chief executive officer of both automakers, gained control of Auburn Hills, Michigan-based Chrysler by promising it would benefit from Fiat’s small-car expertise and sharing of vehicle underpinnings, which reduces cost and speeds introductions of new cars and trucks. Dart is Chrysler’s first vehicle based on a Fiat architecture.

“This is really their first test of true sharing across platforms and technology,” Jeff Schuster, senior vice president of global forecasting at LMC Automotive, said in a phone interview. “That’s been pushed internally and externally as their strategy and why this makes sense. Dart will give us some indication of what direction Chrysler and Fiat are going.”

Chrysler’s engineers based Dart on Fiat’s “compact wide” platform, which was developed in Italy and forms the basis of the Alfa Romeo Giulietta. The architecture for Dart was lengthened by 12 inches (30.5 centimeters) and widened by about 2 inches for buyers in North America.

‘Swiss Army Knife’

“This compact wide is the Swiss Army knife of Fiat and Chrysler,” Marchionne said in April during an interview at his office in Turin. The platform will be the basis of vehicles selling in China and may eventually be used by the Jeep brand in addition to Alfa Romeo, Chrysler and Dodge models, he said.

Chrysler and Fiat sharing vehicle architectures decreases the amount each needs to spend on engineering, design and development because the costs are spread between them.

Fiat boosted its stake in Chrysler to 58.5 percent from 53.5 percent after the commitment to build Dart increased the fleet’s average fuel ratings. Earning that 5 percent of Chrysler ownership, as negotiated in its 2009 exit from bankruptcy, was “a fundamental step” toward integrating the companies, Marchionne said in a Jan. 5 statement. The U.S. government no longer owns any of Chrysler. The additional 41.5 percent is owned by the United Auto Workers union’s retiree health-care trust.

Merger Plans

Marchionne plans to merge Fiat and Chrysler by the end of 2014 to achieve a target of more than 100 billion euros ($127 billion) in revenue. By then, Chrysler will reduce its number of vehicle platforms to seven from 11 in 2010. Three of the seven will be shared with Fiat, the company has said.

Chrysler is reviving the Dart nameplate after a 36-year absence, said Kathy Graham, a company spokeswoman. Dart began sales in 1960 and sold in compact, mid- and full-size versions. The car had some of Chrysler’s most popular engines such as Hemi V-8s and the Slant-6 before Dart’s run ended in 1976.

Q-Tip of the rap group A Tribe Called Quest sang about a road trip in a ‘74 Dart in the 1990 release “I Left My Wallet in El Sugundo.”

Dart will compete against some of the top-selling cars in the U.S., including Toyota Motor Corp. (7203)’s Corolla, Honda Motor Co. (7267)’s Civic and General Motors Co. (GM)’s Chevrolet Cruze. Compact- car sales comprised about 15 percent of industry sales last year and the segment leads the industry in retail deliveries.

Sales Estimate

Dart sales may exceed 100,000 this year, according to LMC Automotive estimates. Toyota’s Corolla, the segment leader and fourth-best selling car last year, totaled 240,259 deliveries in the U.S.

“They’re going to give the segment a run,” said LMC’s Schuster, who is based in Troy, Michigan. Dart will “put a lot of pressure on Toyota and Honda,” he said.

The 40 mpg rating for Dart that boosted Fiat’s stake in Chrysler may not match the sticker in dealer showrooms. It’s based on an older system used by regulators, rather than a predictor of actual fuel economy that drivers can expect.

The Dart, which will start from about $16,000, may get an “in market” certification of 40 mpg, Reid Bigland, Dodge’s brand president, said in an interview today.

Chrysler will have to overcome consumer perception that its models are among the least fuel-efficient, said Alan Baum, principal of Baum & Associates in West Bloomfield, Michigan. The Dodge Caliber compact, which Chrysler is discontinuing, had worse fuel-economy ratings than Corolla, Cruze or Civic.

Buyers’ Views

“When you think of Chrysler, you think of the Jeeps and you think of Ram,” Baum said in a phone interview. “The Caliber didn’t do well because of the product, but it also didn’t do well because of what people think of when they think of Chrysler. That’s not an easy ship to turn around.”

Caliber was “not really able to go toe-to-toe” with other compact cars, Bigland said in a briefing with reporters last month. Its replacement will have “class-leading” wind resistance that inspired Chrysler to bring back the Dart name, he said.

“There’s not much more aerodynamic than a dart,” he said.

Sales of Chrysler’s 200 sedan shows the company may be making progress in changing buyers’ minds, Baum said. Deliveries of the new model totaled 86,987 last year, according to Autodata Corp., more than double the year-earlier sales of the Sebring sedan it replaced. The company’s total U.S. sales rose 26 percent last year, missing a goal for a 45 percent jump.

Dart will have an available touch screen that uses Chrysler’s Uconnect system and at 8.4 inches is the largest among compact cars, according to the company. The touch screen will have available Garmin Ltd. (GRMN) navigation, controls for Apple Inc. (AAPL) iPods and a Sirius XM Radio Inc. (SIRI) system for weather and stock portfolio updates and sports scores.

Labor Costs

Dart will be the smallest model Chrysler builds in the U.S. The automaker will benefit by having kept its total hourly labor costs at an estimated $51 an hour, little changed by its new four-year agreement with the United Auto Workers ratified in October. The contract gives Chrysler an advantage over Dearborn, Michigan-based Ford (F), which has estimated its labor costs will rise to $59 an hour.

Chrysler has said future models also will cut costs by as much as 65 percent through sharing key parts among cars, utilities and trucks in their lineups. The Fiat 500 is made in Mexico.

Fiat and Chrysler plan to introduce eight new models based on the compact platform in 2013 and 2014, after the Dodge Dart and the Fiat sedan for the Chinese market in 2012.

“Chrysler has a lot to benefit in the small-car area from Fiat technology and products in those segments,” Schuster said. “Fiat wasn’t out just to rescue Chrysler, it was really making a go at the global market and leveraging expertise on both sides.”

To contact the reporters on this story: Craig Trudell in Detroit at ctrudell1@bloomberg.net; Tommaso Ebhardt in Milan at tebhardt@bloomberg.net

To contact the editors responsible for this story: Jamie Butters at jbutters@bloomberg.net; Chad Thomas at cthomas16@bloomberg.net

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