LLC will drop the all-wheel-drive option for the ‚Äô09 model Chrysler Sebring and Dodge Avenger midsize sedans and Dodge Caliber small car, a company spokesman confirms.
The auto maker began offering AWD on the Sebring and Avenger in late 2007, but the option really never caught on with consumers, says spokesman Jiyan Cadiz.
‚ÄúFor the Avenger, the take rate was 1.5% for 2008, and for the Sebring it was at 0.7%.‚ÄĚ Cadiz tells Ward‚Äôs. ‚ÄúSo obviously the bottom line is people want fuel economy, and the AWD modules are not profitable for us. That‚Äôs something we can get rid of as we‚Äôre consolidating products and finding what‚Äôs profitable.‚ÄĚ
Cadiz was unable to provide the Caliber‚Äôs AWD take rate. Ward‚Äôs data shows an ‚Äô08 model take rate of 4.4% through April.
Chris Cook, product business director forInc., which supplies the ‚Äôs AWD system, calls the auto maker‚Äôs decision to drop the system from the three models an ‚Äúaberration.‚ÄĚ
‚ÄúWhat we‚Äôre seeing in terms of market forecasting is that (AWD) in the B-, C- and D-segments is growing globally,‚ÄĚ Cook says. ‚ÄúSo I think what we‚Äôre seeing at Chrysler is not indicative of what the market forecast is showing.‚ÄĚ
Cook also sayshas heard comments that Jim Press, Chrysler president and vice chairman, was ‚Äúpuzzled‚ÄĚ why AWD was offered on the trio of vehicles.
‚ÄúPress comes from(Motor Corp.), where they don‚Äôt have AWD on a lot of vehicles (in those segments),‚ÄĚ Cook says. ‚ÄúSo (the decision) was philosophical.‚ÄĚ
But Paul Lacy, director-technical research at consulting-firm Global Insight, argues Chrysler‚Äôs decision may indicate a future trend away from AWD as high gasoline prices drive consumers toward more fuel-efficient cars and cross/utility vehicles.
Lacy estimates today‚Äôs AWD systems degrade fuel economy between 2.0% and 10.0%.
‚ÄúNew AWD systems coming on line could change that, but if a manufacturer is struggling to meet the new fuel-economy targets, you won‚Äôt see a lot of added content from them out of the gate,‚ÄĚ he says.
Pending corporate average fuel economy regulations, which call for light-vehicle fleets to achieve 35 mpg (6.7 L/100 km) by 2020, may force auto makers to rethink their AWD strategy, General Motor Corp.‚Äôs Vice President-Global Product Development Bob Lutz told Ward‚Äôs last month.
‚Äú(AWD) will deteriorate (CAFE),‚ÄĚ he says. ‚ÄúI think you will find all manufacturers either offer less of it or price up to discourage people from buying it, because AWD adds hundreds of pounds and that definitely deteriorates fuel economy.‚ÄĚ
The ‚Äô08 Sebring outfitted with a 3.5L V-6 and AWD earns a U.S. Environmental Protection Agency city/highway rating of 15/24 mpg (16-10 L/100 km), while the front-wheel-drive version with the same engine achieves a thriftier 16/26 mpg rating (15-9 L/100 km).
Suppliers are working on using lighter materials in their AWD offerings to save weight and lessen the impact on fuel economy, says Ericka Nielsen, BorgWarner‚Äôs marketing director.
‚ÄúWe‚Äôre using more aluminum and plastics in our products and making their mass smaller,‚ÄĚ she says. That‚Äôs how we‚Äôre reacting to help OEMs increase their miles per gallon.‚ÄĚ
Cadiz says another reason for Chrysler‚Äôs decision to stop offering AWD in the Sebring and Avenger is the lack of demand by consumers shopping the midsize sedan segment. Price is another factor, as the FWD V-6 Sebring stickers at $27,105, while the AWD model is $29,105.
The ‚Äô08 FWD Avenger R/T begins at $25,685, with AWD raising the price to $26,910.
However,Motor Co.‚Äôs midsize sedans continue to offer the option, which has drawn a healthy number of consumers. The AWD Ford Fusion and Mercury Milan see take rates of nearly 20% in some regions, Ford spokesman Alan Hall says.
‚ÄúAWD is a differentiator for (the) Fusion and Milan, and we plan to continue offering it for the ‚Äô10 model-year products,‚ÄĚ he tells Ward‚Äôs. ‚ÄúWe see the most interest for the option in northern regional markets, due to the weather, (where) the take rates can run as high as 20%.‚ÄĚ
If take rates for any option fall below 5%-10%, it‚Äôs best to pull the plug, says Haig Stoddard, manager of North American light-vehicle forecasting at Global Insight.
‚ÄúI wouldn‚Äôt be surprised if it was just an issue at Chrysler,‚ÄĚ he says. ‚ÄúThey‚Äôre having such a hard time selling just a base version of Sebring or Avenger, there‚Äôs no point in selling them with a pricey option. I‚Äôm sure they‚Äôre not moving.‚ÄĚ
Through September, Sebring sedan sales tumbled 23.2% , compared with year-ago, to 41,660 units, while Avenger deliveries dropped 9.0% to 53,828, Ward‚Äôs data shows. Caliber sales were down 7.8% to 74,069.
Chrysler will continue to offer AWD on other vehicles where the feature has proven more popular, Cadiz says. ‚ÄúThe system is also used in the (Dodge) Journey (CUV), and it accounts for nearly 20%, or a little bit more than that of Journey sales,‚ÄĚ he says. ‚ÄúWe‚Äôre happy with the system.‚ÄĚ