DCC aims to smooth product cycles

Better cycle planning is in the cards at DaimlerChrysler Corp., which wants to eliminate production ups and downs for all of its vehicles beginning with the '04 model year. The strategy is one that is being initiated with the PT Cruiser, which has engineered derivatives already on the shelf ready for when demand slows for the original model.

DCC is in the process of hiking PT assembly capacity to 310,000 units — 260,000 in Toluca, Mexico, and 50,000 in Graz, Austria — by late 2002. And it already has shown off derivatives, including a convertible version of the vehicle and all-wheel-drive models expected to be added to the mix. DCC won't say specifically when it will launch the PT offshoots, but it is clear it wants to manage those rollouts in a way that will keep PT production at or near capacity.

“The nature of any product is, you bring it up, (demand) diminishes and then you have incentives,” says Richard O. Schaum, head of product development, quality and passenger car operations for the Chrysler Group. “And that curve is getting more and more aggressive because (automakers) are renewing things so quickly.”

Mr. Schaum says that beginning with its '04 products, DCC will more thoroughly map out product cycles going in, so that investment for additional body styles and derivatives can be made up front, and introductions can be timed in a way to keep production as close to maximum levels as possible. The trick, executives say, will be to make sure new derivatives represent incremental, not “substitutional” sales.