SEMA eNews Vol. 10, No. 21, May 24, 2007

CHRYSLER SOLD, WHAT'S NEXT

Despite the sale of Chrysler group by DaimlerChrysler, powertrain analysts at CSM Worldwide expect the restructured Chrysler to remain highly competitive in the powertrain arena well into the next decade. According to a recent CSM Worldwide press release, Chrysler has been aggressively procuring designs and outsourcing powertrain production from its global partners. The link that will be maintained with Daimler AG will be a key element of this strategy.

“Decisions regarding the long-term supply of Chrysler engines and transmissions have already been made,” said Eric Fedewa, vice president of global powertrain forecasts at CSM. “Moving forward, Chrysler will increasingly outsource its powertrain programs, both design and assembly, to outside suppliers and strategic partners.”

As an example: of the engines Chrysler assembles, 42% are purchased designs while almost 35% of its transmissions are purchased designs. By 2013, according to CSM’s forecast, the company will increase design purchasing to 77% for engines and 68% for transmissions. This practice allows access to innovative technologies from suppliers, which is vital for product differentiation and maintaining a competitive edge.

Products from Chrysler’s powertrain strategy include the new line of four-cylinder engines developed in a joint venture with Hyundai and Mitsubishi, the high-tech Phoenix V6 coming in 2010 as a replacement to the current lineup of V6s, and the Two-Mode hybrid transmission co-developed with General Motors and BMW.

A recent AutoWeek article delves further into what to expect from Chrysler as far as product lineup. By the time Cerberus Capital Management’s $7.45 billion purchase of Chrysler finalizes in the third quarter of this year, the 2008 Dodge Challenger will be less than a year from introduction. The article also reports that “well-received Chrysler concepts from the past two years should be in line for the production green light.” 

Chrysler expects to continue to invest in future products as planned, and the new owners of the car company intend to follow Chrysler CEO Tom LaSorda’s lead while investing even more into future products. The company’s future vehicle-production plan includes 20 new vehicles and 13 major facelifts for its current lineup by the end of 2009, despite reducing the company’s platforms from 12 to seven. More specifically, Chrysler plans to bring out its fifth-generation Chrysler minivan later this year, the Chrysler Sebring-/Dodge Avenger-based crossovers and the next-generation Ram pickup.

Cut from the portfolio will be the Dodge Durango and Chrysler Aspen once the plant that produces the slow-selling big SUVs is shut down in late 2009. The company has partnered up with China’s Chery Automobiles to bring out a production version of the Dodge Hornet mini-car (middle picture below). Chery will likely join forces with Chrysler to bring out the production version of the Dodge Demon roadster as well (bottom picture below). Chrysler is also considering production of its well-received Chrysler Imperial concept (top picture below), which the company says could spark further interest in the Chrysler brand.
 

Sources: CSM Worldwide. (May 15, 2007). “CSM Powertrain Analysis: Chrysle’s Powertrain Lineup Will Remain Strong Through Partnerships.” CSM Worldwide press release courtesy of PR Newswire; Gritzinger, Bob. (May 15, 2007). Imperial Dreams: Chrysler Sale Could Bode Well for Future Product. AutoWeek. Retrieved May 18, 2007 from www.autoweek.com.

 

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