Pontiac Died, So Why Is Chrysler Living?

[rickaren]

Pontiac Died, So Why Is Chrysler Living?

April 29, 2009

Over the last two weeks one of the more intriguing (and downright scary to some people) suggestions is the idea of the auto task force killing the Chrysler brand. I'm not talking about the Chrysler corporation, but simply the Chrysler brand.

Three months ago that idea would have been roundly dismissed as "crazy talk", not anymore.

Let's be clear, folks at Chrysler Corp. are telling me the Chrysler brand isn't going anywhere. Still, the idea has people from Detroit to Washington to New York asking the same question: If the Auto Task Force killed Pontiac, why wouldn't it do the same thing at Chrysler?

On paper, I can see the rationale.

For starters, when you break down Chrysler Corp, the real value is with Jeep and Dodge trucks. Jeep is a sleeping giant with great global brand recognition and winning models (Wrangler, Grand Cherokee). As for Dodge trucks, they are a still sizable force in the market. Sure, the Ram is a distant third to the Ford F-Series, the Chevy Silverado/GMC Sierra combination, but it still owns about 15% of the lucrative U.S. Pick-up market.

So what are you left with the Chrysler brand? Well, it's the weakest of the auto makers three brands.

* Chrysler 18%
* Jeep 25%
* Dodge 56%

It's weakness is highlighted by a line-up that is gasping for air and relevance. The 300, Crossfire, and Sebring cars are going nowhere (sales down 71% this year) while the SUV/minivan line-up of the Aspen, Pacifica, PT Cruiser, and Town & Country minivan is better (sales down 50%), but not impressive. Only the Town & Country has substantial sales.

Given the weak numbers and the desire of the Auto Task Force to rationalize the industry, why would they let the Chrysler brand live? I'm hard pressed to find many valid reasons. Dealer network? Chrysler already has more dealers than it needs so eliminating the brand would help cull that network.

I raise the question of why Chrysler is surviving simply because the Task Force has made it clear that it wants a slimmed down auto industry. And if Chrysler Corp. ends up doing a pre-packaged Chapter 11 bankruptcy, Don't be surprised if the Chrysler brand winds up being a casualty.

LINK: Pontiac Died, So Why Is Chrysler Living? - Behind the Wheel - Phil Lebeau - CNBC.com