Chrysler Set to Announce Sub-Compact Car Partner
DaimlerChrysler AG’s North American division, Chrysler Group, is probably feeling pretty smug right about now. Not only is it the only profitable automaker among Detroit’s Big 3, but it’s also doing it while raising the quality of its two highest volume brands, Chrysler and Dodge.
Chrysler tied with Honda’s Acura division for top-10 placement, an impressive feat considering it bypassed other entry-level luxury brands, such as Buick, Lincoln, Audi, Volvo, Mercedes-Benz, BMW, Saab and Volkswagen to do so. Dodge, ranking slightly below the industry average, may be bested by Buick, Lincoln, Audi, which it doesn’t really compete directly against, and Chevrolet, which just managed to squeak under the industry average median to post a better than average score, but nevertheless is rated higher than the rest of the premiums just mentioned, as well as its sporty domestic rival Pontiac, and performance-oriented Asian competitors such as Subaru and Mazda.
This bodes well for the brand entering into the highly competitive subcompact segment, a promise that it has made to its dealers who need a smaller car than Caliber in order to pull first-time new car buyers into the Dodge family. The car, likely to resemble the Hornet concept introduced in Geneva earlier this year, will be a global seller, offered in Europe and North America, plus other markets Dodge is currently in, or has plans to enter in the near future.
According to Reuters News service, Chief Operating Officer Eric Ridenour said on Thursday that Chrysler Group expects to announce a partner for its upcoming subcompact by year end.
Ridenour would not name the parties Chrysler is in negotiations with, but said they were several “semi-finalists.” Of these, it is likely Volkswagen AG is at the top, if only because ex-Chrysler Group exec Wolfgang Bernhard, now Volkswagen brand chairman and member of VW AG board, is tight with DaimlerChrysler’s Dieter Zetsche, ex-Chrysler Group CEO and new DaimlerChrysler AG boss. The two companies are working together to develop the upcoming Dodge Caravan/Chrysler Town & Company replacement, vans that will then coexist with a new North American-bound VW-branded midsize van.
Also on the subcompact list is Mitsubishi, being that the two automakers have many years of cooperation. There are others, of course, some talk even about a Chinese partner, but only time will tell which automaker gets the nod. One thing is for sure, Chrysler can’t do it themselves due to the investment needed to design and manufacture a new model that might only be used by a single brand.
In the U.S. alone, which per capita buys the least number of subcompact models, 180,000 subcompact units were sold last year. The market is growing, however, globally, with the U.S. share, now at a mere 1 percent of total vehicle sales, expected to more than double by 2007, to 370,000 units. Even this year, sales are expected to swell to 290,000 units, according to Automotive News.
With such sales projections, expect every automaker not yet in the subcompact game, a list that, other than Chrysler Group, includes some heavyweights such as Ford and Volkswagen, plus influential players such as Mazda and Mitsubishi, as well as Japanese heavyweight Nissan, although its compact-sized Versa is set to target subcompact buyers in the coming months. It is also entirely possible that a new raft of Chinese imports will become available by the time Dodge has its subcompact ready for market, not expected until 2008. Yes, we live in interesting times.