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post #1 of 1 (permalink) Old 07-17-2008, 03:10 PM Thread Starter
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Chrysler May Scrap Most-Expensive Sebring, Avenger

July 17 (Bloomberg) -- Chrysler LLC, hobbled by a 22 percent drop in U.S. sales this year, may scrap the most- expensive Dodge Avenger and Chrysler Sebring sedans and add more features to cheaper models to gain car buyers.

The revisions, part of a strategy called ``Fight Back,'' mean less-expensive models would have standard features such as heated seats now offered only in the costlier versions, according to a document sent to parts suppliers.

Chrysler is trying to sell more cars after record gasoline prices triggered an 18 percent drop in the industry's truck sales this year and boosted demand for more fuel-efficient vehicles. Chrysler, more dependent on trucks than any major automaker, has posted one of the industry's steepest sales declines.

``This is a classic move to try to jump-start a failing car line,'' said John Wolkonowicz, an analyst at Global Insight Inc. in Lexington, Massachusetts. ``It might sell a few more cars, but because the fundamental car is not that desired to begin with, it's not going to have that big of an impact.''

A reduction in Sebring/Avenger models would expand Chrysler's efforts to simplify its lineup. Under new owner Cerberus Capital Management LP, the No. 3 U.S. automaker is eliminating products such as the Dodge Magnum wagon and PT Cruiser convertible in an effort to end two years of losses.

``We will always look for ways to improve our product based on customer feedback,'' said Rick Deneau, a Chrysler spokesman, without verifying the plan.

`Urgent' Review

Parts suppliers have until today to tell Auburn Hills, Michigan-based Chrysler if the request is feasible, according to the document, which labeled the review ``urgent.''

Chrysler, the industry's sales leader in minivans for more than two decades, ranks sixth in car sales through June. The Avenger is also the nation's sixth best-selling ``upper'' mid- sized car nameplate, according to Autodata Corp. of Woodcliff Lake, New Jersey.

Chrysler sold 41,453 Avengers through June, about one-sixth the volume of Toyota Motor Corp.'s Camry, the best-selling car in the nation and the leader of the category that includes the Avenger. The Sebring ranks ninth, with 32,794 deliveries. Its sales are down 30 percent this year, while the Avenger has gained 2 percent.

Won't Be Missed

The Dodge Avenger R/T and the Chrysler Sebring Limited would be eliminated, according to the document. The base Sebring and the comparable Avenger SE wouldn't change.

All 2009 model-year mid-range Sebring Touring and Avenger SXT models would carry dual-exhaust systems, 18-inch aluminum wheels, and leather, heated and power seats as standard equipment, according to the documents.

Wolkonowicz said Chrysler probably didn't sell many of the most-expensive styles, and those vehicles won't be missed. He said it's a common practice by Honda Motor Co. and Toyota Motor Corp. to put extra features on base models in their final year before a redesign.

Production of vehicles designated as 2009 models would typically begin this month for sales beginning in September. Chrysler's manufacturing operations are in the second week of their annual two-week shutdown to prepare plants to build next year's models.

Vehicle Prices

The Avenger R/T has a suggested retail price of $23,545 and the Sebring Limited lists for $24,415, according to Edmunds.com. The document recommends prices of $21,750 for the SXT Avenger with the added features, or a 9.9 percent increase, and $21,670 for the Sebring Touring, a 3.4 percent boost.

The current 2008 Avenger SXT starts at $19,795 and the Sebring Touring begins at $20,865, Edmunds.com says.

The document also shows a plan to improve the interior of its Dodge Journey small sport-utility vehicle. It says Chrysler intends to add extra storage areas, more comfortable seats, steering-wheel audio controls and a softer instrument panel. The Journey went on sale this spring.

Passenger car sales in the U.S. are down 1.5 percent through June while the entire industry has fallen 10 percent.

Chrysler, which was purchased in August by Cerberus, lost $300 million on an operating basis through April, according to a June 12 Cerberus presentation.

LINK: Bloomberg.com: U.S.

Rick

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