By Mark Clothier
May 29 (Bloomberg) -- Driving home from work earlier this
month, Chrysler dealer David Kelleher was struck by a pang of
guilt when he stopped at a red light behind a Dodge Caliber, a
compact criticized for stodgy styling and inferior quality
before it was killed off last year.
“It was from my store,” said Kelleher, who has two
Chrysler Group LLC
dealerships in Glen Mills, Pennsylvania. “I
almost feel bad that a customer of mine is driving that car,
considering the offerings we have now.”
Chrysler has mounted a Lazarus-like comeback on the
strength of its Jeeps and Ram pickups. Its car line, long a
weakness, has played a smaller role, as Chief Executive Officer
face-lifted a few sedans with modest styling
tweaks and terminated slow sellers such as the Caliber. That
changes early next year with a redesign of the Chrysler 200
family car, a project that may be the company’s most expensive.
“We really start to see the transformation of Chrysler’s
car lineup next year,” said Jeff Schuster
, an analyst with
researcher LMC Automotive of Troy, Michigan. “That’s the big
test that’s ahead of them. The industry is looking at the full
redesign of the 200 as a way to measure Chrysler’s success.”
Chrysler, which emerged from a U.S.-government backed
bankruptcy in 2009, has had 37 months of consecutive sales gains
in the U.S. Marchionne has forecast Chrysler will earn $2.2
billion this year and the U.S. automaker is now propping up its
Italian savior, Fiat SpA, which is losing money as Europe’s car
market plunges to its lowest level in two decades.
Yet Chrysler cars still sell primarily on price, Kelleher
said. The company has yet to field a signature model, such as
General Motor Co.
’s Cadillac ATS and Ford Motor Co.’s Fusion,
that demonstrates Detroit is building its best sedans in a
“I don’t think anybody wakes up and says, ‘Let’s go out
and get an Avenger,’” Kelleher said of a mid-size Dodge he
manages to move with a $3,000 rebate. “The new 200 is going to
be a different car. People will wake up and come to buy that
Kelleher is among Chrysler dealers who’ve been given a
sneak peak at the next generation 200 and he’s eager to get it
on his showroom floor. Despite improvements Marchionne made to
the current 200 model -- and the fame it gained from being
driven by rapper Eminem in a 2011 Super Bowl ad -- it still
doesn’t match up well against Ford’s stylish Fusion and Toyota
’s top-selling Camry sedan, Schuster said.
“I’ve been selling Chryslers since 1992 and, heck, I don’t
know if we’ve ever been competitive in that market,” Kelleher
said of the mid-sized sedan segment.
Ford’s Fusion, up 25 percent in U.S. sales this year, sent
Chrysler back to the drawing board on its 200 redesign,
according to Kelleher. Chrysler told its dealers it threw away
the design it had planned for the 200 once it saw Ford’s new
Fusion, with styling that evokes an Aston Martin luxury car.
“After seeing the Fusion come out, they said, ’OK, we’ve
got to crumple this up and go back and do better’,” Kelleher
said Chrysler told the dealers. “They were somewhat challenged
by the Fusion.”
Chrysler didn’t start over on the 200 after seeing the
, said brand chief Saad Chehab, though he added that
Ford’s sedan had an impact, as did the Hyundai Sonata and Kia
“We react to things we see no matter where they are and
the Fusion is one of the stops we made,” Chehab said in an
interview. “Our challenge was that if any of us walk into a
room and look at the car, is my jaw going to drop?”
The 200’s predecessor, the Sebring, was the target of
withering criticism. Pulitzer-prizing winning car critic Dan
Neil, then writing for the Los Angeles Times, called the 2008
Sebring convertible “a veritable chalice of wretchedness, a
rattling, thumping, lolling tragedy of a car.”
Marchionne ordered a fast face-lift and a name change for
the Sebring shortly after he took control of Chrysler in 2009.
That, though, was just a place-holder while Chrysler came up
with a more substantial solution for the sedan, Schuster said.
Asked if the new 200 will be Chrysler’s statement car,
meant to set the standard for all that will follow, the
automaker’s design chief, Ralph Gilles said, “Well, we’ll die
trying because you’re right, it’s a very, very critical
Fixing Chrysler cars was the foundation upon which Fiat
gained control of Chrysler out of the Auburn Hills, Michigan-
based company’s bankruptcy. Marchionne promised the U.S.
government he would use Fiat’s technology in developing cars for
Europe to overhaul’s Chrysler’s lackluster lineup.
First, Marchionne improved Chrysler’s car quality, which
had historically lagged behind the competition. That remains a
work in progress, with the Chrysler brand near the bottom of
J.D. Power & Associates Vehicle Dependability Study and the 200
model receiving a below-average rating in reliability from
Consumer Reports magazine.
“We had to tackle the issues we’ve had,” Chehab said.
“We feel we have made the progress so far and now we have the
opportunity to propel into the future with the new 200.”
The new 200 will not be derivative of Chrysler’s big 300
sedan, a styling and sales hit a decade ago that influenced the
look of the entire model line, Gilles said.
“The 300 had a lot of gravity to it back in the day and it
kind of drove the styling of the minivan and some of the other
products,” Gilles, the 300’s designer, said in an interview.
“But the 200 is kind of a clean sheet of paper.”
At a Las Vegas meeting to show Chrysler dealers new models
last October, the 200 was the only introduction that brought
them to their feet, Chehab said.
“The new 200 is a complete home run,” Kelleher said.
“It’s got that strength of a very, very expensive European
sedan like a Mercedes, but it’s definitively American.”
The initial efforts of the Chrysler-Fiat alliance are
beginning to bear fruit, following slow starts. The Dodge Dart
compact, based on a Fiat architecture, had its best U.S. sales
month in April since it debuted a year ago.
Sales are up 6 percent this year for the Fiat 500, which
Marchionne brought to the U.S. in 2011 after a three-decade
absence for the Italian car brand. He also is expanding the 500
line by adding three models this year, including an electric
version and a stretched 500L model that seats five.
Those small models, which sell more modestly, won’t give
Chrysler the car credibility that a well-received 200 would
generate, said Michelle Krebs, an analyst for auto researcher
Edmunds.com. The current version of the 200 is outsold by more
than 2-to-1 by the Camry, Fusion and Honda Motor Co.
“That mid-size car segment is so important,” Krebs said.
“It’s huge. You’re not going to make much of a gain if you
aren’t playing strongly in that segment. That’s how Toyota and
Honda got strong and that’s why Ford is doing so well.”
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--Editors: Keith Naughton
, Jamie Butters, John Brecher.
To contact the reporter on this story:
Mark Clothier in Southfield, Michigan at +1-248-827-7132 or
To contact the editor responsible for this story:
Jamie Butters at +1-248-827-2944 or