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Backseat Driver: Chrysler's survival saga continues

Chrysler continues to flail in a market where it seems ill positioned, with its latest move designed to move its new hybrid SUVs off the lot.

But hybrid SUV was always a contradiction in terms – a case of wanting your cake (updating the outmoded SUV with green technology) and eating it too (big SUV-style profits) – that has now fallen flat in an age of high gas prices.

SUVs on the whole do not appeal to environmentally conscious consumers and the savings – going from around 15 combined miles to the gallon to around 20 mpg – are not necessary going to appeal to consumers seeking to save money at the pump.

This is the latest move from privately owned Chrysler which is lumbered with a lineup that include few small cars – the Chrysler PT Cruiser/Convertible and Dodge Caliber – and a bunch of big, aggressive vehicles seemingly from another universe - including the Chrysler 300 and Pacifica and Dodge Challenger, Charger and Magnum, let alone its SUVs and trucks.

Indeed, Chrysler has seen sales drop off nearly 20 percent so far this year compared with the first five months of 2007, including a drop of nearly 25 percent in May.

As a result, it has made a number of moves that seem to reflect a “We’ll pay you to drive them away” mentality.

They include the grand offer of guaranteeing $2.99 a gallon gasoline for 12,000 miles a year over three years for each new vehicle, and a decision to follow General Motors and sell certified used Chrysler, Dodge and Jeep vehicles on eBay.

Last week, chairman and CEO Robert Nardelli had a Jimmy Carter moment of crisis in the face of bad reviews from both Consumer Reports and J.D. Power & Associates, sending off an email to all employees asking them why they thought no one wants to buy the company’s products.

His recommendations included such corporate/marketing mumbo jumbo examples of the something obvious as: “Don’t hesitate to confront problems;” “Everything is about pleasing the customer” and “Raise the standard defining excellent quality.”

Excellent quality indeed!

Now the company has announced it will undercut General Motors in the pricing of its 2009 hybrid SUVs – the Chrysler Aspen and Dodge Durango. Both will be priced at around $45,000 which is about $8,000 less than GM’s 2008 hybrid SUVs – the Chevrolet Tahoe and the GMC Yukon.

But with consumers falling over themselves to buy small, fuel-efficient cars, it remains to be seen whether the SUV hybrid schtick will carry in a world of high gas prices.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 1:42 PM to Chrysler | Permalink | Comments 0

Backseat Driver: Ernie Boch hits home run on small Hondas

It has been an open secret for quite some time: with skyrocketing gas prices, small, fuel efficient cars – new and used – are all the rage.

And as for hybrids, forget about it. As my colleage Bruce Miranda found out in his search for a Toyota Prius, the few used ones entering the market are snapped up right away and buying a new one means a wait of two to three months.

So credit local auto dealer Ernie Boch for having the foresight to see where gas prices were going and the moxie to buy up some $2 million’s worth of small Hondas from dealers around the nation, according to Automotive News.

“We could see it coming,” he told the authoritive industry trade paper of the run on small, fuel efficient cars.

As a result, sales at Boch’s Honda dealership in Norwood, Mass., which is the top-selling Honda store in the nation, are “brisk” while many other dealerships are staring at clogged lots and little foot traffic.

“Civics are going like crazy,” Boch is quoted as saying below a front-page photo of him leaning out the front window of a Civic with a big grin and a thumbs up.

- Peter C.T. Elsworth

Posted by Peter C. T. Elsworth  at 12:14 PM to Fuel economy , Fuel prices , Honda , Local dealerships | Permalink | Comments 0