Chrysler Needs More Than a New Image
As the three-headed monster called Cerberus Capital Management, LP dissects and digests the "new" Chrysler, changes are coming fast. First there was the odd choice of Bob Nardelli, former GE Jack Welch cost-cutting drone and freshly ousted, overpaid, underperforming CEO of Home Depot, to be Chrysler CEO. Once Wolfgang Bernhardt got a feel for Cerberus, he wisely passed on the position. That was bad for Chrysler as Mr. Bernhardt would have been a great CEO. Bob Nardelli presided over the unprecedented slide of customer service and satisfaction at Home Depot. Good choice for the "new" Chrysler, huh?
Next, after green lighting a slew of new projects like a new V6 engine plant, Cerberus hired Toyota/Lexus marketing robot Deborah Wahl Meyer. Ms. Meyer joined Toyota in 2001 after working on advertising for Ford's Lincoln/Mercury division.
We don't hear much about those dark days at Lincoln/Mercury because those brands were essentially dead while she was there. While at Toyota, she was part of a group that developed Toyota's "Moving Forward" campaign and most recently oversaw the launch of the new Lexus LS ultra-premium sedan. She also gets credit for pushing nontraditional marketing events like a "Taste of Lexus" and sponsorship of events like fashion and classic car shows.
Lexus dealers say these kind of nontraditional events helped increase sales. Ok, if you say so. But how does all this luxury "experience" translate to Chrysler? It doesn't. However, Chrysler wants to reposition itself in the marketplace as a luxury car manufacturer. Huh? Chrysler wants you to believe that it has great products; but the problem is that Chrysler isn't known for great products. To kick start this new plan, Chrysler is falling back on its outdated reputation for great engineering with the new slogan "engineered beautifully".
This is one tall order. Chrysler products are mostly uninspired, poorly engineered cars rental cars. Let's look at Chrysler's current model lineup:
- 300 Sedan and its variants
- Aspen SUV
- Crossfire
- Pacifica
- PT Cruiser and PT Cruiser Convertible
- Sebring and Sebring Convertible
- Town and Country Minivan
Let's start with the junk. The Aspen is a rebadged Dodge Durango SUV -- the answer to the question that no one asked. Now Chrysler has its own gas guzzling, poor quality SUV to sell just as consumers switch tastes to smaller crossover SUVs and sedans. I only see rental Aspens in LA.
The Crossfire Coupe and convertible are interesting styling exercises underpinned by the first-generation Mercedes-Benz SLK convertible. The chassis is old, dated and you can feel the lack of quality when you drive it. The powertrain is equally dated and uninspired. And the onboard electronics are generations behind the competition. It's time for something new.
The Pacifica entered the market a few years ago as a bloated station wagon that never really caught on with the public. Although Chrysler is using some Mercedes parts-bin stuff under the skin and in the chassis, the Pacific got the full Chrysler cheap interior treatment and corporate 3.5 liter V6 powertrain. Fortunately, Chrysler has upgraded the drivetrain to a 4.0 liter V6 mated to a modern six-speed automatic (in Limited trim) but the basic awkward shape and uninspired performance disqualify the Pacifica from what anyone could describe as "engineered beautifully".
The PT Cruiser and PT Cruiser Convertible are cars whose time has come and gone. The design was cool and fresh in 1998, even if Chrysler used a dog-tired; cheap chassis and drivetrain. Over the years, not much has changed. The addition of the turbo engine addition helped with power; but not with the torque steer problem and interior noise. The plastics are cheap and it shows. I recently drove a rental PT Cruiser marveled at its unchanged, unrefined, noisy nature.
The new Chrysler Sebring sedan and convertible were instant hits in the rental fleets. Dan Neil of the LA Times recently reviewed the all-new Sebring convertible. He urged newly-minted Chrysler CEO Bob Nardelli to go to the motor pool and check out a 2008 Chrysler Sebring Convertible (with the optional retractable hardtop). Dan wanted Mr. Nardelli to drive this car so he could experience a "bad car". Ouch. It's a painful slam on the Sebring and Chrysler. I highly recommend reading the full review, 8 August 2007 "Top to Bottom".
So what's left? The Chrysler 300C is the car that revived the brand. It was bold, new, well executed and very popular. But that was a few years ago and while the 300 is still the face of the "new" Chrysler, a German-American hybrid, it's wearing thin in the market. In the "old days" there was a wait to get a 300C with Chrysler's signature 5.7 liter Hemi V8. Now, Chrysler will give you any number of rebates and low financing offers to move the metal. Only the low-volume SRT8 performance model commands full sticker price or a premium. However, with high gas prices, the 6.1 liter, 425 hp V8 is more of a collector's car than a daily driver. Of course, you can afford this beast and price isn't an issue, then the expensive frequent refills shouldn't matter.
The 300C isn't a Lexus. It's not a Mercedes-Benz -- although it does have some old Mercedes parts inside. It's definitely not an Audi or BMW. Infiniti has it beat, hands down. So how do you define Chrysler in the marketplace?
In important luxury benchmarks like fit and finish, plastics quality and the overall cohesiveness of design and engineering, Chrysler isn't playing in the same ballpark as the luxury and near luxury brands. Chrysler is closer to Cadillac; however, Cadillac has a luxury image and some decent, if not great, products. We are all told that the 2008 Cadillac CTS sets a new benchmark for Cadillac that will finally lure some luxury buyers from the German and Japanese luxury brands. I'm still skeptical; time will tell. Chrysler has a long way to go to lift itself to the level of Cadillac!
But back to Chrysler marketing… Ms. Meyer at least has some perspective from outside the Detroit bubble. California, in particular So Cal, is the number one market for Toyota/Lexus, Honda/Acura and Nissan/Infiniti. It's also a big market for the 300C and Chrysler/Dodge Minivans. She knows how Lexus works here. However, without great new products, it's going to be very hard to elevate Chrysler beyond its damaged brand status in the market.
Chrysler certainly isn't seen as a premium brand in California or most other markets. It's going to take much more than the 300/300C to elevate the entire brand. With so many mediocre rental car staples in the Chrysler's lineup, it would take a marketing miracle to elevate Chrysler to the level of Luxury or Near Luxury -- a sweet spot so desperately sought after by manufacturers.
There is one "all new" Chrysler product I haven't addressed yet. And that's the 2008 Town and Country minivan. We are told that it's a complete redesign of the all-important minivan. That's not true. Much of the old minivan carries over, including the chassis and some side sheet metal. There are substantial upgrades to the interior and if you pop for the top Limited model, you get the upgraded corporate 4.0 liter V6 mated to the new six-speed automatic.
I haven't driven the new Town and Country, but I have seen it. The styling is still boring and emasculating. Men are going to run away screaming from this minivan unless their soccer mom wives insist on one. The minivan still offers the best combination of versatility, convenience and cargo capacity -- much better than an SUV alternative. This is the market segment Chrysler invented more than 20 years ago and it still is the dominant player. Chrysler had an opportunity to redefine the segment. The 2008 Town and Country is an upgrade, not a redefinition. Another opportunity has been lost.
Is the Chrysler Town and Country a "luxury" minivan? Maybe; it does have some luxury touches. However, the main competition comes from the Honda Odyssey and Toyota Sienna. And the Korean Twins Hyundai and Kia both offer value-packed alternatives. No luxury manufacturer offers a minivan. It just doesn't fit the image. So how does the redesigned Town and Country fit into a luxury car marketing scheme. It doesn't.
Beautiful Engineering sounds nice. Wine and cheese parties paid for by a car manufacturer sound nice too. Chrysler just revived its 1962 3-D pentagram to glue to the sides of its products. It shows pride in engineering, right? Not so much. GM revived its "GM Mark of Excellence" logo and glues it to the side of all its products. It hasn't made a bit of difference. All the marketing in the world isn't going to revive a brand already on life support. Marketing doesn't make a luxury brand -- although it can help.
Great, fresh products revive brands. In the car biz, it is and always has been about great new products. Real innovation and excellent engineering make for great products. And customers buy great products. People know cars that are "engineered beautifully" when they see and drive them. Marketing can help get the word out and excite customers. Marketing can create an aura around products and car companies -- ask Toyota -- it's a master at creating an image and promoting its products from the "green" Prius to the monster new Tundra pickup truck. Marketing cannot create a great car. Leave that to engineers and designers, not cost accountants.
Ms. Meyers makes it sound easy: "My job is to help make them [Chrysler] profitable. Good things happen after that". Good luck, Ms. Meyers, you now have one of the hardest jobs in the marketing business. Let's get some lipstick out and see if the pig puckers up.
