Chrysler Design Chief Bedeviled by Roadster

AUBURN HILLS, MI – Trevor Creed is a man possessed.

Chrysler LLC’s design chief is not spewing pea soup, “Exorcist”-style.

But he says nothing turns his head these days quite like the Dodge Demon concept roadster, which debuted in March at the Geneva auto show. Particularly at this juncture, as Chrysler moves forward under the auspices of Cerberus Capital Management LP.

Building a production version of the Demon is “foremost in my mind,” Creed tells Ward’s, claiming conditions are ideal – externally and internally – for green-lighting such a car.

Powered by a 2.4L I-4 engine, the Demon satisfies a growing market trend that favors fuel-stingy technology, he says, while the car’s edgy design symbolizes a “rebirth” of the auto maker’s spirit as a bold, American company.

Creed is mum on when a decision might be made on building the Demon, but there’s no great rush. He says its classic proportions give it plenty of shelf life, likening it to the Mercedes-based Chrysler Crossfire 2-seater, which launched in 2003.

Refreshed for ’07, Crossfire’s U.S. sales were up 36% through July, year-over-year. But that increase benefits from comparison with last year’s shortened production run.

Related document: Ward’s U.S. Car Sales by Line and Brand, July 2007

Chrysler proposes a production Dodge Demon would sell for $15,000.

Soft sales through early 2006 sales caused German coachbuilder Wilhelm GmbH Karmann to trim 1,250 workers from the 5,200-member payroll at its Osnabrueck plant – home to Crossfire production.

Creed has said the Demon was conceived as a Miata-fighter. Currently marketed as the MX-5 Miata, the Mazda offering has ruled the roadster segment since its debut in 1989.

After losing its U.S. sales crown last year to the Pontiac Solstice, the MX-5 through July regained its lead, albeit slightly. MX-5 deliveries totaled 10,790, compared with 10,541 for the Solstice.

Classified as middle-specialty cars, according to Ward’s segmentation, both roadsters are part of a declining niche. From a 10-year peak of 548,921 deliveries in 2001, middle-specialty cars in the U.S. are on pace to sell just under 317,000 units, a new low for the period.

But industry observers believe there always is room for an affordable sports car. And affordability is one of the Demon’s hallmarks.

Chrysler proposes a starting price in the $15,000 range.

“If you can make a really good value proposition, you can clearly win some sales,” says Joe Phillippi, principal of New Jersey-based AutoTrends Inc.

There is universal appeal, he says, for a “back-to-basics kind of sports car without a supercharger or turbo that has terrific performance and handling qualities and is user-friendly.”

By user-friendly, he means it must have cargo room for more than “a couple of small gym bags.”

The timing for such a car couldn’t be better.

“There’s an ever-increasing number of Baby Boomers,” Phillippi says. “As they retire, there’s a huge chunk of wealth there. And Baby Boomers, historically, have tended to be somewhat of a conspicuous consumption group.”

He suggests a car such as the Demon could achieve annual U.S. sales of 50,000 to 100,000 units, which would push it beyond the roadster class into Ford Mustang territory at the top of the middle-specialty category.

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