Special Coverage

Chrysler's Next Chapter

AUBURN HILLS, MI – Chrysler Group LLC will lean heavily on Fiat Automobiles SpA as it takes on what could be its toughest task in its 5-year recovery plan, revitalizing the near-luxury Chrysler brand.

The auto maker has set ambitious targets for its flagship marque – annual U.S. sales of nearly 500,000 units and an almost doubling of market share to 3.4% by 2014 – but it will need a critical product infusion from Fiat to fill a competitive void in the C/D car segment and execute a sweeping marketing effort designed to restore its long-dulled luster.

The Chrysler brand “will be the biggest benefactor of the relationship with Fiat,” Joseph Veltri, vice president-product planning, notes.

The roadmap to recovery is there for Chrysler, says brand President and CEO Olivier Francois, who also heads up Fiat’s Lancia operations and oversaw a similar comeback for that marque this decade.

“Lancia was in the same situation five years ago,” he says, adding Chrysler and the Italian brand have similar DNA, built around “innovation, style and performance.”

Lancia went from six vehicle lines and 4.1% market share in 2006 to four products and a 4.8% share this year, Francois says.

Similarly, Chrysler is tasked with boosting market share from 1.8% on a volume of 182,000 vehicles this year to 3.4% and 498,000 units annually in five years.

Key will be a broadening of the lineup from four models to seven.

Plans call for Chrysler to introduce a new compact sedan based on Fiat architecture in 2012. The following year will see three critical new models come to market, a B-car built by Fiat, a replacement for the Sebring based on a Fiat architecture and a midsize cross/utility vehicle, also derived from a Fiat platform.

Meantime, Chrysler will bridge the gap with a new 300 sedan in first-quarter 2010, and it will refresh the current Sebring midsize car and Town & Country minivan in second-half 2010. The Town & Country will get a total redo, but remain on a Chrysler platform, in 2014.

The PT Cruiser will be phased out at the end of 2010.

Francois also is leading a full-scale marketing assault, not only revamping television and print advertising but overhauling product brochures and the Chrysler brand’s website.

“We want our brochures to be something people put on their coffee tables, not throw into the recycling bin,” he says.

The brand’s winged badging has been modernized, with a sleeker profile and “Chrysler” emblazoned at its center.

And Chrysler will spend less on conventional marketing events and “detour from main street,” Francois says. “We have to present our vehicles like models on a runway.”

Reviving the brand, relegated to second-tier status in the U.S. luxury-vehicle market, will be a tall order.

But Chrysler CEO Sergio Marchionne says he doesn’t believe the financial problems and subsequent negative press that has plagued the auto maker overall will make it any tougher to rejuvenate its namesake brand.

“We don’t believe there’s been irreparable damage to any of our brands,” he says. “The (Chrysler) brand needs to be fixed, but it is not terminal.”

He blames Chrysler’s current weak market position on “structural deficiencies vs. the competition,” namely that Chrysler has had to rely primarily on just two vehicles, its 300 sedan and Town & Country minivan.

“The Sebring doesn’t match up,” he says. “You have to play in the C/D market. If you can’t, you won’t be effective.”

The auto maker does not show any future Chrysler models here at its exhaustive backgrounder on the company’s 5-year plan. But Francoise says upcoming Chryslers will offer “balanced performance, smooth driving, provocative styling and value.

“Our mission is not to be a generic brand,” he says. “The market is crowded. We need to be distinctive.

“One step at a time, we will restore our brand equity.”