nalysis & Commentar

iii-m"r P UOMU-UMMuitliiWtlU
ZETSCHE on the recently re-
Enjoying launched Jeep Grand
heady days Cherokee and th; Dodge
^ ^ Chargeran ar;iped-up
sedan version of the Magnum tiiaf s ar-
riving this summer. The point, says
-i"*. Zetsche, is that Chrysler is no longer re-
lying on a single hit to goose profits:
"Today we have four orfivepillars."

KEEPING COSTS LOW

TO KEEP THAT UP, Chrysler is slicing and
dicing the market. It's inventing pricier
derivatives of existing models, including
the Mega Cab, a six-seater version of the
Ram pickup that arrives this fall. And
CARMAKERS Chrysler brands are moving into un-
tapped markets. The Commander, which

THE ZOOM MACHINE also hits showrooms this fall, is Jeep's for-
ay into dl-size three-row sport utility ve-
hiclesa move applauded by analysts.

AT CHRYSLER The Nitro concept, meanwhue, likely

heralds Dodge's move into the popular
small SUV segment next year.
With a slew of new modelsincluding the For the long haul, Chrysler's future
also rides on its next generation of small
hot 300 sedanits momentum is building carsa perennially money-losing seg-
ment for Detroit. Small cars are unlikely
to become Chrysler's
DODGE CALIBER bread and butter, but a
modest success could
eliminate red ink. The
HEN CHRYSLER costs are under con- sporty Caliber hatch-
Group Chief Execu- trol, they've reduced back concept unveiled
uve Dieter Zetsche capital expenditures, in Genevawith its
grabbed an electric and the^re launching fuel-efScient engine-
guitar out of a mu- successful products," offers hints of what
sician's hands and says Dresdner Klein- the 2006 replacement
smashed the glass wort Wasserstein ana- for the Dodge Neon
concealing the Dodge Cahber concept car lyst Jens Schattner. will look like. The Cal-
on Mar. 1, he jolted the genteel Geneva In- "This is the perfect iber W1 be based on
ternational Motor Show. Whue the stunt mix to be successful." the last vehicle chassis
was a ploy to publicize plans to launch the For now the mo- CO-developed with
Dodge brand in Europe next year, it also mentum is being struggling Mitsubishi.
signaled the return of a brash exuberance stoked by the Chrysler Chrysler will go ahead
that characterized the Chrysler of yore. 300. In a market alone with a midsize
Zetsche & Co. have reason to feel jammed with well-en- sedan to replace the
heady. Led by the runaway success of the gineered, competitive- Dodge Stratus and
Chrysler 300 sedan, sales rose 75% in ly priced cars, the Chrysler Sebring in
February, even as other domestic auto 3OO's bold style stands late '06. The trick, say
makers suffered declines. Remarkably, out. Fven better, its Data: DaimlerChrysler; Dresdner Kieinwort Wasserstein analysts, will be to
the sales increase came despite a 6% drop popularity appears to keep costs low, since
in incentives, to an average of $3,760 last have legs. Jeremy P. Anwyl, president of the economies of scale planned for a joint
month, according to Merrill Lynch & Co. auto researcher Fdmunds.com Inc., notes Chrysler-Mitsubishi program are no
The fast start follows a stellar 2004, when that incentives on the 300 have fallen longer in the cards.
Chrysler earned $1.9 billion in operating fi-om $1,500 at launch last April to $900 Zetsche's task is to launch all these new
profits. Not bad, compared with a $637 today, signaling strong consumer interest. models smoothly and then keep the prod-
million loss in '03. Chrysler's iture isn't riding on the uct-development machine tuned up and
Can Chrysler, which has often veered 300 alone. Other 2004 introductions, cranking out worthy successors. He's
from triumph to setback, keep the revival notably the Dodge Magnum sport counting on more hits to keep this
rolling? The answer seems to be yes. wagon and updated versions of the Chrysler revival from being followed by
Most analysts say Chrysler has enough Dodge Caravan and Chrysler Town & yet another crash.
decent product in the pipeline to remain Country minivans, are off to a strong -By Kathleen Kerwin in Geneva, with
profitable for the next few years. "Their start. Chrysler is now pinning its hopes David Welch in Detroit

40 I BusinessWeek I March 21, 2005

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