LLC will drop the all-wheel-drive option for the â€™09 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.
â€śFor the Avenger, the take rate was 1.5% for 2008, and for the Sebring it was at 0.7%.â€ť Cadiz tells Wardâ€™s. â€śSo obviously the bottom line is people want fuel economy, and the AWD modules are not profitable for us. Thatâ€™s something we can get rid of as weâ€™re consolidating products and finding whatâ€™s profitable.â€ť
Cadiz was unable to provide the Caliberâ€™s AWD take rate. Wardâ€™s data shows an â€™08 model take rate of 4.4% through April.
Chris Cook, product business director forInc., which supplies the â€™s AWD system, calls the auto makerâ€™s decision to drop the system from the three models an â€śaberration.â€ť
â€śWhat weâ€™re seeing in terms of market forecasting is that (AWD) in the B-, C- and D-segments is growing globally,â€ť Cook says. â€śSo I think what weâ€™re seeing at Chrysler is not indicative of what the market forecast is showing.â€ť
Cook also sayshas heard comments that Jim Press, Chrysler president and vice chairman, was â€śpuzzledâ€ť why AWD was offered on the trio of vehicles.
â€śPress comes from(Motor Corp.), where they donâ€™t have AWD on a lot of vehicles (in those segments),â€ť Cook says. â€śSo (the decision) was philosophical.â€ť
But Paul Lacy, director-technical research at consulting-firm Global Insight, argues Chryslerâ€™s 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 todayâ€™s AWD systems degrade fuel economy between 2.0% and 10.0%.
â€śNew AWD systems coming on line could change that, but if a manufacturer is struggling to meet the new fuel-economy targets, you wonâ€™t see a lot of added content from them out of the gate,â€ť 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.â€™s Vice President-Global Product Development Bob Lutz told Wardâ€™s last month.
â€ś(AWD) will deteriorate (CAFE),â€ť he says. â€śI 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.â€ť
The â€™08 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, BorgWarnerâ€™s marketing director.
â€śWeâ€™re using more aluminum and plastics in our products and making their mass smaller,â€ť she says. Thatâ€™s how weâ€™re reacting to help OEMs increase their miles per gallon.â€ť
Cadiz says another reason for Chryslerâ€™s 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 â€™08 FWD Avenger R/T begins at $25,685, with AWD raising the price to $26,910.
However,Motor Co.â€™s 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.
â€śAWD is a differentiator for (the) Fusion and Milan, and we plan to continue offering it for the â€™10 model-year products,â€ť he tells Wardâ€™s. â€śWe 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%.â€ť
If take rates for any option fall below 5%-10%, itâ€™s best to pull the plug, says Haig Stoddard, manager of North American light-vehicle forecasting at Global Insight.
â€śI wouldnâ€™t be surprised if it was just an issue at Chrysler,â€ť he says. â€śTheyâ€™re having such a hard time selling just a base version of Sebring or Avenger, thereâ€™s no point in selling them with a pricey option. Iâ€™m sure theyâ€™re not moving.â€ť
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, Wardâ€™s 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. â€śThe 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,â€ť he says. â€śWeâ€™re happy with the system.â€ť