Filed under: Car Buying, SUVs, Crossovers/CUVs, Chrysler, LLC., Dodge, Jeep
Press: Chrysler to cut its SUV offerings in half
It's no secret that Chrysler has some overlapping models in its lineup. Case(s)-in-point: it's hard to make a rational argument that Jeep should be offering both the Compass and Patriot (not to mention Dodge selling the Patriot's platform sibling, the Caliber) or the Grand Cherokee and the Commander. The Chrysler Aspen and Dodge Durango barely pretend to be different vehicles and there's no reason to sell both the Jeep Liberty and Dodge Nitro when they're basically the same machine. This revelation is as obvious to Chrysler's new management as it is to us, and Chrysler President Jim Press, says as much. "We're going to stop overlapping, we're going to bring everything under one roof. By doing that we will have more products in the markets we are not covering."
Also marked as redundant by Press are the Chrysler Town and Country and Dodge Caravan minivans, but as easy as it may be to pinpoint overlapping models, fixing that problem may prove more difficult. Dealers will need to begin offering the whole Chrysler line of vehicles if this strategy of "bringing everything under one roof" is to succeed. Expect to see drastic changes taking place in the next four to five years.
[Source: Bloomberg]
Also marked as redundant by Press are the Chrysler Town and Country and Dodge Caravan minivans, but as easy as it may be to pinpoint overlapping models, fixing that problem may prove more difficult. Dealers will need to begin offering the whole Chrysler line of vehicles if this strategy of "bringing everything under one roof" is to succeed. Expect to see drastic changes taking place in the next four to five years.
[Source: Bloomberg]

Reader Comments (Page 1 of 3)
Chris 9:35AM (3/24/2008)
The Compass should be ceremoniously shoved off a cliff.
Reply
zack 10:55AM (4/01/2008)
You can shove mine off a cliff! ..lol im on the phone with a senior....something at the moment a chrysler Head Office..big problems that are a safety concern with my compasss i hate it so much!!!!!!!! can someone tell me whay it's idle is bouncing frm 300-800rpm's and it's stalling often like wtf..dealership's say ahhh it's fine.......FINE? WTF ughhhh
Soccer Mom 9:51AM (3/24/2008)
Why would you do such a thing? CompAss is a nice vehicle - luxury interior, beautiful exterior curves, outstanding off-road abilities. What else can you ask for?
Reply
FThorn 9:55AM (3/24/2008)
Have you driven one? I liked the ride for the $16k price.
Jason 10:24AM (3/24/2008)
please please please tell me that was sarcasm...
Gardiner Westbound 9:53AM (3/24/2008)
GM and Ford please copy.
Reply
FThorn 9:55AM (3/24/2008)
and now for the piling on of:
-Vibe/Matrix
-Scion xB and Daihatsu Matera
-CRV and RDX
-Camry and ES
-Edge / MKX
-Mountaineer / Explorer
-Sable Taurus
-3 & S40 (bigger stretch)
etc...
Reply
Tourian 10:19AM (3/24/2008)
The difference OF COURSE is that most of those are not sold under the same roof like the Chry/Dod/Jeep stores that they are pushing.
jon 10:03AM (3/24/2008)
This is no different that just about what every other auto manufacture does. More than one model coming off the same line. If this is the direction things are heading get ready for a bunch of workers getting laid off and factories closing. Maybe that is what is needed. Oh yea, and some better products.
Reply
AZMike 10:04AM (3/24/2008)
this could cause a dealer revolt, and with good reason.
one simple fact that Mr. Press isn't considering is that there are still 40% of the dealers who sell Chrysler products who aren't in a Chrysler/Dodge/Jeep configuration. some are just Dodge, some just Chrysler, and some Chrysler/Jeep. hell, there are still stand-alone Jeep dealers!
the logic of taking away their bread-and-butter products is ridiculous. dealers are under absolutely no obligation to sell out to other dealers, or to the factory. thank god for strong franchise laws already in place in every state.
it's interesting that Mr. Press is pushing for this. perhaps he forgot how many sales outlets his former employer, Toyota, sell thru in Japan. what is it, eight separate sales outlets there, for just about the the same number of models we receive here from one?
if selling here thru only one outlet here is so good, why hasn't this success been transferred back to Japan?
AZMike
Reply
Soccer Mom 10:14AM (3/24/2008)
I guess the dealers will have to adjust to new reality.
Jared 10:11AM (3/24/2008)
This is EXACTLY what Chryslerbus needs to do. It has way too many dealers -- far more than Toyota even though Toyota sells far more vehicles. It can't afford to buy them out. GM spent $1 Billion to buy out Olds dealers. Dealers that are losing money do not provide good service. Chryslerbus must reduce the number of dealers so that the remaining ones actually make money and provide good service. They can't buy them out, so they are choosing the only alternative they have left.
Furthermore, it does not make sense for Chryslerbus to spend money designing two front-end clips, two rear-end clips, and two different interiors for the same minivan. It does not make sense for Chryslerbus to split their advertising budget over both the Stratus/Avenger, Dodge Charger/300c, etc. Take that extra money and put it into a SINGLE model and make it better. One good car will sell better than two not-so-good cars.
AZMike 10:28AM (3/24/2008)
Jared,
your comments are interesting, and correct on the surface, but not in reality.
have you ever checked the CSI numbers for service at a Toyota dealer? they're in the toilet; one of the worst from NAY manufacturer. the fact that Toyota has so many fewer dealers is NEVER a plus from the customer's level; only the fat dealer's. a dealership should be convenient for a customer; having so few locations is not.
if you want to see astronomically high CSI numbers, you might want to check one of those small, rural dealers that you think should disappear, "because they are not making money". in reality, those small, rural stores are by far more liquid than the large megastores in large metropolitan areas. they also really go out of their way to make sure their customers are happy.
the styling changes you mention are chump change for a manufacturer, and are part of doing business.
another thing you are not considering is that demographics for many of these models are quite different. for example, Chrysler Town and Country buyers make over $50K more per year than Dodge Caravan buyers do. the Dodge Charger buyer is totally different than the 300 buyer; take away their choice, and they will head somewhere else.
AZMike
Mal Fuller 11:10AM (3/24/2008)
By my experience, AZMike, many Chrysler dealers have been revolting for years.
Jared 12:38PM (3/24/2008)
Earth to AZMike.
All of the big 2.5 are trying to reduce their dealership numbers. They will do so, but only slowly because of the absurd franchise laws. You can accept it and make the best of it, or keep making excuses and rationalizations and end up as road kill. You are obviously a Dodge, Chrysler, or Jeep dealer.
Sorry, but you are just flat out wrong about model duplication and overlap. It is killing the domestic brands. Ask a person walking down the street the difference between a Dodge versus a Chrysler (or Chevy versus Pontiac, or a Ford versus a Mercury), and unless you are in Detroit you will get a blank look. The brand differentiation is GONE (and so is most of the Chrysler and Dodge brand equity). It isn't 1960 any more.
That brand differentiation costs money. It costs money to design. It costs money to inventory the extra parts. It takes time to do the design. And the very large issue is the advertising cost. When Toyota brought out the latest Camry, they spent over $100M on marketing. Think about how much better the interior of the Avenger/Stratus could have been if Chrysler had spent an extra $50M on it.
The overlapping models cost a great deal, but give zero benefit.
I've been in 3 Toyota dealerships close to me. I've also been in the local Dodge dealerships. The Toyota dealerships have interior drives where you can get out of the weather when you drop off your car for service. Free wifi. Free coffee. Flat screen TV. Rental cars on site. New attractive showrooms and waiting rooms.
The Dodge dealerships? Complete dumps.
Chryslerbus is facing bankruptcy. They've got maybe a couple years or they're gone. The first step on the road to recovery is to admit that you have a problem. Chryslerbus at least has done that. I have little faith that Minimum Bob will be able to fix it, but at least he's trying something different.
Unfortunately, it is apparent from your attitude that many dealerships haven't gotten to that first step.
AZMike 1:27PM (3/24/2008)
Jared,
about the only thing you are right about was the fact I was a former Dodge dealer. I've been thru the buyout deal (in 1993), and it worked really well for me. however, I did have a choice in whether I wanted to do it or not.
I'm sure you know that your experiences with the "great" Toyota dealers, and the "awful" Dodge dealers are a very subjective thing. I could point out some really nice Dodge (and Chrysler) facilities in my area, as well as some really awful Toyota dealers, but that isn't the point.
badge-engineering isn't so much an American thing as some think. the Japanese have been experts at it for decades. how many Lexus models are just tarted-up Toyotas? why is badge-engineering bad for domestic makes, and not for the Japanese? if seeling thru one outlet is so great, why doesn't Toyota practice this in Japan? you'd think this would be at the top of their efficiency list, since sales in Japan are in the tank, and aren't expected to come out.
I also wouldn't be too concerned about the opinion of that person on the street, either. I would be much more concerned about that person in the showroom, thinking about buying a car. if they want a Town and Country instead of a Caravan, they should have that choice. and that choice has an absolute minumum cost to Chrysler when the minivans sell in the great numbers that they do. as I mentioned before, if the Town and Country was gone, many buyers would just go somewhere else, most likely to a competitor's dealer. they would not buy the Dodge, just like a Charger buyer would not buy a 300.
I'm not quite sure who Chryslerbus is, but CERBERUS is far from bankrupcy.
this bankrupcy thing is comical at best. it reminds me of the days in the early 80's when other far-thinking folks would come in and ask if we were going to be selling Studebakers when "Chrysler went out of business". I'm still waiting!
if you were a student of history, you would know that this cyclical trend is very much part of Chrysler's history. think Chrysler Airflow. think 1957 model year cars, and bad workmanship. think ill-advised 1962 model downsizing, and so on.
also, think engineering innovation. think torsion-bar suspension. think slant-six engine. think HEMI engines. think muscle-car dominance. think minivan innovation. think purchase of Jeep in 1987. think success of LH cars in 1993-today. think 1994 Ram pickup. think Cummins diesel engine. think Challenger.
far from a losing roster, wouldn't you say?
first, Cerberus doesn't buy companies it sees no future in. Cerberus doesn't hire the leadership it has at Chrysler with plans to fail. will it be painful at times? you bet. but the one thing they need to remember is that the dealers are the ones who make EVERYTHING happen. without them, there is no business.
when I had my Dodge dealer, I used to love having "experts" on the car business come into the dealership for the entire day, or even for the week. when they left, their opinion was completely different.
I can remember one guy who "just knew every dealer was screwing everyone". he watched when the factory denied a cylinder head warranty claim on a 2.6L Caravan when an owner didn't stop after blowing a radiator hose, finding it "inconvenient to stop." he watched as we installed a brand-new crate engine, with the dealership picking up the entire bill. we did this because it was the right thing to do. this customer then sent us over 30 people who also bought vehicles, and they purchased another eight themselves.
this is far from an unusual occurance at any dealership of any kind in the USA. it's called keeping a customer, even if the factory isn't interested.
AZMike
mwl 8:00PM (3/24/2008)
Kudos to AZMike,
The reason that many Chrysler group dealers are struggling is that Daddy, the corporation has not designed, developed, and marketed enough hit cars. When you can't make money on the cars you sell, of course customers won't be treated like roylaty. Assholes like Jared are the ones that come into dealerships with their edmunds print outs and ridiculous offers. Its these same mooches that then want free oil changes, free loaners, free everything, and never come back for any customer pay work. Sorry to inform all of you small dealer haters, but Cerberus' current plan of Retail Chemotherapy is going to kill many so called "alpha" points, it the little, low overhead dealers that will survive on.
Robert 10:07AM (3/24/2008)
I'd say at the very least cut the Compass, Commander and Nitro. Instead of cutting the Aspen, improve it to make it more a luxury SUV.
Reply
Theron 12:28PM (3/24/2008)
See, there's the rub. Personally I like the Compass better than the Patriot, the Nitro better than the Liberty and the Commander better than the GC. However, I totally agree with Jared that one good model is better than 2 not so good. What a dilemma!
Jim 10:13AM (3/24/2008)
"one simple fact that Mr. Press isn't considering is that there are still 40% of the dealers who sell Chrysler products who aren't in a Chrysler/Dodge/Jeep configuration. some are just Dodge, some just Chrysler, and some Chrysler/Jeep. hell, there are still stand-alone Jeep dealers!"
they ARE considering it. have you missed all the talk about them "consolidating" their dealer body?
Reply