DaimlerChrysler Canada Pushing for Subcompact Dodge Hornet
What car does DaimlerChrysler Canada want for the Canadian market? According to Steven J. Landry, President and CEO of DaimlerChrysler Canada, the subcompact Dodge Hornet that wowed Geneva auto show-goers in February, would be the ideal concept to put into production.
“I feel the Dodge Hornet would be the perfect vehicle for Canada,” commented Landry while speaking at a Vancouver Board of Trade luncheon on Wednesday. “We’re looking for ways to affordably bring this vehicle to Canada in the near future.”
With small cars making up 47 percent of new car sales in Canada, the more small cars an automaker has to offer the stronger its sales will be. Therefore, the fact that Landry was all smiles when announcing that the new compact Dodge Caliber five-door is getting kudos from auto journalists and attention from customers alike, after only 30 days on the market, makes a great deal of sense.
The DCX Canada boss will likely have reason to keep smiling, as Chrysler Group will soon be launching two new compact Jeep models in the Canadian market, the city-slicker Compass and slightly more rough-and-ready Patriot, both which ride on the same Caliber platform, and due to their convenient size and good expected fuel economy, should reach an all-new urban buyer.
Still, while the compact class is heating up in all markets around the world due to higher fuel costs, the subcompact segment, especially experiencing resurgence in North America, may soon get hotter. New models from Toyota, Honda, Hyundai, Kia, General Motors, Suzuki, and soon Nissan, are contesting for younger first-time buyers as well as those on fixed incomes, and despite the Caliber offering greater size, more power and some pretty trick features for a price that comes close to subcompact five-doors, for some its thirstier, larger displacement engine will be a drawback. This leaves room for something smaller, something like the Hornet.
Interestingly, the time may be ripe for Auburn Hills to make a move down market. Previously, it just didn’t make sense. Americans don’t particularly like tiny subcompacts unless they have mega-appeal, such as BMW’s MINI Cooper, but $3.00+ per gallon pump prices are starting to affect the buying habits of those less affluent, making a strong business case for the Hornet.
Making a stronger case is the European equation. Chrysler Group has been selling various Chrysler and Jeep models in Europe for a fairly long time, but in nominal numbers. Recently, the Dodge brand was added to the European mix, and to that end the Caliber goes on sale across the Atlantic this summer. Something like the Hornet would be an ideal entry vehicle for Dodge overseas, as the Caliber may still be considered relatively large in comparison to popular compact models currently available in that market. Still, Chrysler Group is conservatively bullish about its prospects outside of North America, expecting to sell 20,000 units next year.
“I think in the international business we can sell over 20,000 Calibers next year,” Thomas Hausch, Chrysler’s director of international sales and marketing, told reporters at a presentation of the car in Spain earlier today.
With Europe as an ally, and many DCX dealers in inner-city USA looking to attract more and more first-time new car buyers, DaimlerChrysler Canada has a fighting chance to get the small car it’s needed since the demise of the old Mitsubishi-made Colt.
Dropping Mitsubishi’s name brings up a possible resource partner. Chrysler Group isn’t about to develop a standalone chassis architecture and micro-sized drivetrain for a vehicle that will only result in a single model, as a subcompact Chrysler won’t happen in the North American market at least, nor will a mini-Jeep (Mini Moke fans shouldn’t hold their collective breath - see http://www.mokeclub.org for a wee-bit of an education as to what a Mini Moke is). Therefore, DCX needs a development partner, and despite recent differences of opinion and direction between the two automakers, Mitsubishi and its award-winning Colt would be an ideal donor car. It just so happens that Mitsubishi Cars North America is weighing the possibility of importing the next-generation Colt to this part of the world so as to not lose out on the subcompact wave, and no doubt would like to ease development costs by sharing its underpinnings with a like-minded strategic partner. Could this once again be DaimlerChrysler’s Dodge division?
DCX and Mitsubishi have worked together for years, most recently sharing chassis architecture and the joint “World Engine”, a project which also includes Hyundai, for the new Caliber as well as Mitsu’s upcoming Lancer replacement, plus Dodge makes the chassis and drivetrain, among other components for Mitsubishi’s Raider pickup truck; although this relationship is reportedly strained due to the Japanese company’s inability to fulfill purchase quotas thanks to slow sales. Just the same, assistance developing a global-market subcompact model might ease tensions, and give Dodge the Hornet it needs while providing Mitsubishi with a much-needed capital injection.
Then again, there are rumblings that Chrysler is looking elsewhere, possibly even China’s Chery Automobile Co., championed in North America by Malcolm Bricklin. Reportedly Chery is is a step above other Chinese producers, building some well-made cars. This would be an interesting partnership, if the rumours came true. The fit with Mitsubishi seems the most obvious choice, although who knows how deep the rifts between the two automakers reach. A clean break may be a smart move (excuse the small car pun, as smart has also had a partnership with Mitsubishi for quite some time, sharing its forfour model underpinnings with the Colt and building it at the joint NedCar plant in the Netherlands). This experience will also make clear the need to build the small car anywhere but Europe, as the tiny fortwo, which comes over from Europe, is extremely expensive compared to others in the subcompact class. Yes, China may be a good choice. Then again, with DCX global czar Dieter Zetsche in tight with former DCX exec cum new Volkswagen boss Wolfgang Bernhardt, the VW Lupo, or something similar, may underpin the new Dodge compact.
Money losing automakers in mind, it should be noted that Chrysler Group isn’t exactly shrouded under the same dark cloud as Volkswagen (although VW’s quarterly profits are up for Q1 of ‘06), the even darker Mitsubishi, or for that matter its Big 3 Detroit rivals, GM and Ford. Thanks to a tightly run ship and an extremely innovative and resultantly successful product lineup, the automaker achieved a $126 million CAD ($114 million USD) quarterly profit in Q1 of 2006, which is the “11th quarter in a row where Chrysler Group has made a profit”, claimed Landry. But the trick to maintaining profitability, or at least a good way to continue up the bell curve, is to enter untapped market segments with exciting new products that will be sure to attract attention.
Chrysler Group will soon remind us all once again that they’re the best in the auto business when it comes to flipping the status quo onto its collective rear end. Soon, the two new Jeep models just mentioned, plus a new slightly smaller than midsize 4×4-capable Dodge Nitro SUV, and a slightly smaller than full-size Chrysler Aspen luxury-SUV, just to name a few, will enter the market. Landry also showed Board of Trade members photos of two additional concepts that may get the official Auburn Hills nod in the near future; one being the brilliant orange Dodge Challenger two-door muscle car that created quite the fuss in Detroit last January, and the other being the equally intriguing Chrysler Firepower sport coupe that many expect will replace the automaker’s slow-selling Crossfire coupe and roadster. While such brand-topping models are important for building a nameplate’s image, the Hornet could be a halo car all on its own, and one that could fill the bottom line while increasing sales to levels currently unachievable with the automaker’s current product lineup.
Without doubt Chrysler Group would like to take part in the subcompact party, and now all that remains to be seen is how the powers that be go about bringing the feisty little hatchback to market.
More photos of the Hornet at Car-Desktop.com