Chrysler CEO: Sales of new Dart fall short
TOM KRISHER | January 14, 2013
DETROIT — Chrysler made the new Dodge Dart a little too European for American tastes.
And the company's CEO says that fact is holding back sales of Chrysler's first innovative small car in years.
The Dart, unveiled with much fanfare at last year's Detroit auto show, is off to a slow start after going on sale in May. Only 25,000 were sold last year, which CEO Sergio Marchionne concedes is below his expectations.
Chrysler, owned by Italy's Fiat, had touted the sleek compact as the perfect blend of aggressive American styling and Italian technology. It was supposed to be Chrysler's first competitive compact since the Dodge Neon came out in the 1990s.
But on Monday at this year's Detroit show, Marchionne said the company made the mistake of rolling out the Dart with transmissions and engine combinations that were ill-suited for American drivers. The car initially went on the market with only a manual transmission, which accounts for less than 5 percent of U.S. sales. Then Chrysler offered two six-speed automatic transmissions, one that shifts like cars in Europe, and the other paired with an engine too weak to make the Dart accelerate quickly.
Marchionne said the European transmission shifts more often and accelerates more slowly than Americans are used to.
"It's a great fuel mileage solution, but it's got to meet consumer expectations, and were not quite there," Marchionne said. "If it's a mismatch to consumer expectations, you're going to pay the price, and we have."
The solution, he says, is a nine-speed automatic transmission. The added gears will help the car accelerate faster and give it great mileage. Chrysler is developing such a transmission in America that will first appear in a revamped Jeep Liberty small SUV later this year. The Liberty is to be unveiled at the New York Auto Show in March.
Jake Fisher, Consumer Reports' director of automotive testing, said Darts with a 2-liter four-cylinder engine, and a conventional automatic transmission, are too slow. The European automatic behaves more like a manual transmission and isn't to the liking of Americans, he said.
"I think in Europe they kind of forgive it," said Fisher, who added that the transmission shifts like "someone who's not driving a manual transmission very well."
He praised Marchionne for realizing the car's shortcomings and quickly addressing them.
Chrysler never revealed sales expectations for the Dart, but it hoped the car would attract younger buyers. Darts start at just under $16,000, $2,000 less than the Honda Civic, the top-selling compact in the U.S.
The Dart is designed with a luxurious interior and sports-car handling. Chrysler offered numerous options so buyers could customize their cars.
But so far, the Dart's sales haven't come close to leaders in the compact car segment. Honda sold nearly 318,000 Civics last year.
Marchionne is confident the Dart will eventually sell well. It offers far more features than competitors for the price, he says.
Although Chrysler named the Dart after a popular sedan from the 1960s and 1970s, it's nothing like its predecessor. Instead of the somewhat boxy lines of the original, the new Dart has the sleek stance of a modern muscle car, with a short hood, long roof and slightly flared fenders. And it's based on the frame and suspension of a crisp-handling Alfa Romeo hatchback brought over by Chrysler's Italian owner, Fiat SpA.
Chrysler, which ran out of cash and had to be bailed out by the government in 2009, saw its overall U.S. sales jump 21 percent last year.
Chrysler Tries To Improve Its Aim After Missing The Bullseye With Dodge Dart
2013 Dodge Dart
One disappointment in an otherwise stellar year for Chrysler Group has been the Dodge Dart, a sporty compact that hasn’t lived up to sales expectations.
Chrysler has high hopes for the Illinois-built Dart, the first of many upcoming vehicles based on small-car expertise from its Italian parent, Fiat S.p.A. But after a slow start last June, Dodge dealers are selling only about 6,000 Darts per month, well below the 33,000 per month sold by the segment leader, Honda Civic.
“The easiest thing to do would be to slap $4,000 on the hood, but we’re not looking to get back into that game, which didn’t end well for us in 2009,” said Dodge brand president Reid Bigland, who also serves as company-wide sales chief. Deep discounting destroyed profits and is one of the reasons Chrysler went bankrupt three and a half years ago.
Here’s the predicament: although the Dart starts at $15,995, the average transaction price is $21,800, substantially higher than most compact cars. (Only the Volkswagen Jetta sells for more.) The Civic, by comparison, sells for an average of $19,200, according to Chrysler data. Normally, that translates into fatter profit margins, but Chief Executive Sergio Marchionne says it’s not so because the Dart was “born loaded” with expensive technology and other premium features like an 8.4-inch touchscreen media display.
Marchionne also says the company made a mistake by initially offering the Dart only with a manual transmission and small Fiat engines. “If it’s a mismatch with consumers, you pay the price and we are,” he told a group of reporters at the North American International Auto Show in Detroit. A new 2.4-liter, 184-hp engine and a unique nine-speed automatic transmission, both coming soon, will help, he predicted.
In the meantime, rather than slashing prices, Dodge plans to tinker with its sales strategy by combining the most popular options into feature packages at an affordable price, making it easier for dealers to stock the cars consumers really want. For example, Bigland mentioned one Dart SXT special edition package that will be available by early March for $595. It will include dark tinted headlights, black grille, fog lamps, LED racetrack taillights, integrated dual exhaust, Bluetooth, cruise control and passenger in-seat storage.
Marchionne isn’t worried. “There’s nothing wrong with the car,” he says. “It will do well. It could have done better if we had the right powertrains sooner.”
Chrysler drops shift from Dundee, Mich., facility employing 750
DUNDEE, Mich. — Chrysler has cut production on one of its four-cylinder engines by eliminating a shift at the company’s Dundee Engine Plant.
Tom Zimmerman, plant unit chairman for United Auto Workers Local 723, said Thursday that the automaker gave word last week that it planned to do away with one of the two shifts building Chrysler’s 1.4-liter engine used in the Fiat 500 and some Dodge Darts.
Most of the approximately 60 workers who were on the second shift were moved to other jobs in the plant, Mr. Zimmerman said. However, some workers lost jobs as a result of the production slowdown.
Chrysler fired 14 employees who were days away from the end of their 90-day probationary period, Mr. Zimmerman said. Some UAW-represented contract employees in the plant also lost their jobs when they were bumped out by workers from the eliminated shift. The union didn’t immediately have figures on how many workers were affected.
A Chrysler Group LLC spokesman confirmed the shift elimination and the firings of 14 probationary employees, but did not have a tally on how many contract workers were bumped out, noting seniority issues are handled by the union.
Mr. Zimmerman said the union has filed grievances over the firings of the probationary workers because contract employees still work in the plant.
Dundee Engine, about 25 miles north of Toledo, is Chrysler’s sole source for four-cylinder engines. In addition to the 1.4-liter, Dundee also builds 2.0-liter and 2.4-liter engines that go in vehicles such as the Jeep Compass, Jeep Patriot, and Chrysler 200.
Mr. Zimmerman said production on the 2.0-liter and 2.4-liter engines remains brisk, with employees on two shifts working regular overtime. He expressed surprise that Chrysler was reducing production of the other engine.
“Those fellows had the pedal to the metal all summer,” he said. “Now we hit the brakes.”
The Dundee plant made more than 100,000 of the 1.4-liter engines in 2012.
A company spokesman said Chrysler is “rebalancing” its engine mix with the introduction of new engine options for the Dart.
Though the 1.4-liter is the sole powerplant for the Fiat, a turbocharged version of the engine is one of two options in the Dart.
A third Dundee-made four-cylinder engine is coming soon with the recently introduced Dart GT.
Chrysler officials have been somewhat disappointed with Dart sales, which totaled just more than 25,000 last year. Speaking with reporters at the North American International Auto Show last week, Chrysler Chief Executive Sergio Marchionne put part of that blame on the smooth-shifting automatic transmission Chrysler paired with the 1.4-liter engine.
Though it returns good fuel mileage, the acceleration of the Italian-style setup didn’t meet the expectations of many American buyers.
“The powertrain solutions we made available to that car, in today’s world, in hindsight, were not the ideal solution,” Mr. Marchionne said.
The Dart eventually will get a nine-speed automatic transmission that will debut later this year in Chrysler’s replacement for the Jeep Liberty.
Dundee has been building the 1.4-liter engine since November, 2010, following a $179 million investment from Chrysler.
A second shift of production for the engine was added in August to support the Dart.
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