Automotive News - June 30, 2008 - (Page 24)

24 • JUNE 30, 2008 CHRYSLER FUTURE PRODUCT Chrysler looks to alliances to get through turbulent times Bradford Wernle and Rick Kranz bwernle@crain.com W hen Automotive News ran its last Chrysler future product forecast on Oct. 22, the average price for a gallon of regular unleaded gasoline was $2.82. Now, eight months later, the average price per gallon exceeds $4. This stomach-churning climb in fuel prices, coupled with upcoming new corporate average fuel economy rules, has forced Chrysler LLC to reexamine each product program. “Nobody forecasted it. Nobody saw this coming,” says John Wolkonowicz, an analyst for Global Insight in Lexington, Mass. “A whole bunch of things conspired to create this perfect storm, and now they’ve got to deal with it.” Chrysler is trimming its new product budget, with only one major launch scheduled in each of the next four years. Such a schedule means Chrysler will trail its competitors. Chrysler had planned to pare its model line before gasoline prices rose, with the goal of eliminating competing models. The automaker will wind up with about 18 models across the three brands, with a range of fuel-efficient powertrains, including hybrids (see story, Page 28). But the major focus of Chrysler’s product strategy is to reduce vehicle development costs through alliances with other automakers. In fact, most of its future vehicle programs may be tied to alliances, whether as complete vehicles or sharing major components. Alliances on Chrysler LLC’s horizon are: Chery: Chrysler has struggled to jump-start its small-car program with Chery Automobile Co. in China. Chery is working on a range of small, front- drive vehicles for Chrysler that will be sold in North America. But none has been approved for production. The issue? Chrysler is concerned about Chery’s ability to meet the quality and safety standards Americans expect. Chrysler says it is committed to the Chery relationship, but there is no U.S. timetable for the vehicles. Nissan: “You help me, I’ll help you” seems to be the Chrysler-Nissan plan. Nissan will develop and assemble a small, fwd vehicle for Chrysler that draws on styling cues first seen on the Dodge Hornet concept. The car goes on sale next year. Meanwhile, Nissan will replace its full-sized Titan pickup truck with a model developed and assembled by Chrysler. Production begins in 2011. Other projects between the two companies seem likely. Global mid-sized platform: Project D is a crash, six-month effort to develop a plan for a global mid-sized vehicle platform with a high degree of flexibility. Among the questions to be addressed are whether the platform should be front- or rear-wheel drive, or both, and whether the platform should be capable of use for cars, crossovers, minivans and pickups. Also, the Project D team will recommend whether Chrysler should go it alone or look for a partner. The plan is expected to be completed this summer. The first models are penciled in for the 2012 model year, but one or two may arrive earlier. Daimler: The German automaker maintains a 19.9 percent stake in Chrysler LLC and will be involved with the company for the foreseeable future. Some current and future Chrysler vehicles will share components with Mercedes-Benz. For ex- What do the terms mean? Freshen: Sheet metal untouched; may include new grille, fascia, headlights, taillights Reskin: Minor changes to sheet metal Restyle: Extensive changes to exterior and interior Re-engineer: Vehicle’s platform or chassis and components receive an extensive makeover to reduce noise, vibration and harshness and improve qualities such as ride, handling, braking and steering Redesign: New platform; new interior and exterior styling; engine and transmission could be carried over Impact of new CAFE rules: 40% mpg increase Harry Stoffer hstoffer@crain.com MODEL YEAR Possible Sebring reskin Town & Country freshened 300 restyled, re-engineered CHRYSLER Aspen hybrid debuts DODGE Base, R/T Challengers debut Journey debuts Durango hybrid debuts Ram restyled, re-engineered Hornet debuts Possible Avenger freshening Possible Nitro freshening (or 2011) Grand Caravan likely freshened Possible Durango redesign Possible Caliber redesign Charger restyled, re-engineered JEEP Grand Cherokee redesigned (or 2011) Possible Compass freshening Patriot freshened ample, the redesigned Jeep Grand Cherokee will use a range of components shared with Mercedes, as will the 2009 Dodge Challenger SE and the restyled, re-engineered 2009 Ram pickup bowing this fall. Of course, Chrysler’s future vehicle plans may change. With Cerberus Capital Management’s investors looking for a positive return on their money, Chrysler could end up again with a “For Sale” sign on its Michigan headquarters, throwing the future product plans up for grabs again.c Product planners at Chrysler LLC and other automakers always say they need regulatory certainty. Now, on fuel economy, they’ve got it — probably more than they want. Last December, a federal law was enacted requiring light-duty vehicles to average at least 35 mpg by 2020 — about 40 percent higher than today. Today, standards for the 2008 model year are 27.5 mpg for cars and 22.5 mpg for light-duty trucks. The bottom line: Chrysler has a long way to go. Details remain to be worked out, but the Bush administration is clear that it wants the industry to make a fast start. Preliminary rules issued in April would require all automakers to raise car and light-truck fuel economy about 25 percent by the 2015 model year. The rules, which take effect with the 2011 model year, must be completed by April 1, 2009. The Bush administration says it will adopt the final 2011 to 2015 model year rules by the end of this year, but the next president could make changes. A big switch from the past: Because different fuel economy targets are being set for vehicles of different sizes, each automaker in effect will have to meet its own unique standards based on the sizes of the cars and trucks it produces and its product mix. Until now, the corporate average fuel economy program, or CAFE, set an industrywide car standard and truck standard for all automakers.c Upscale Ram reaches for bigger share of a smaller market Bradford Wernle bwernle@crain.com Keys to the new pickup Upscale interior Dodge’s first 4-door crew cab RamBox lockable storage bins built into the bed rails 5-link, coil spring rear suspension for carlike ride Re-engineered, 380-hp, 5.7-liter Hemi engine with variable valve timing and a cylinder cutoff system for better fuel economy The Ram engineering team used an unconventional solution to address a common complaint about most pickups — ride quality. In place of leaf springs, a five-link, coil spring rear suspension was engineered to give the Ram a carlike ride. This is the first coil spring application for a rear pickup suspension since General Motors trucks in the 1960s. “We heard clearly from customers,” says Mike Cairns, chief engineer for the 2009 Ram. “They weren’t entirely happy with ride quality. Leaf springs had reached their peak. “The only way to get improvement is with the link coil suspension. The only debate is market acceptance.” c Rick Kranz contributed to this report The day Chrysler designer Ralph Gilles was assigned to lead the 2009 Dodge Ram 1500 design team, he bought a pickup truck. Gilles, who confesses he isn’t a “pickup guy,” noticed something immediately: Sitting behind the steering wheel, he had to lean far forward to reach the radio controls. So when Gilles and his team designed the 2009 Ram, they placed the radio controls 3½ inches closer to the driver than in the 2008 model. “This interior represents a new era at Chrysler,” said Gilles, commenting on improvements in ergonomics and materials. Dodge planners know higher gasoline prices mean lower truck sales, so they are banking on an upscale-looking interior, new features, a new crew cab version and even an unconventional rear suspension to grab a larger share of a shrinking market. Sales begin this fall. “We are going to pick up share in the truck segment with this new vehicle,” says Michael Accavitti, Dodge brand marketing chief. “We’re at 16.6 percent total pickup truck” market share. “I want it to be much higher.” The interior has two-tone upholstery, chrome accents, soft-touch materials and contrasting stitching on the instrument panel. For the first time, bucket seats are available with a floor shifter in the console. A 4-door crew cab version, which can comfortably accommodate families as well as work crews, is a first for the Ram. It replaces the megacab, which was too big for many customers’ garages. Dodge will offer what it calls “store in the floor” bins with removable liners for holding 10 12-ounce beverages and ice. Another first is the four-door crew cab version. Crew cabs, which can comfortably accommodate families and work crews, account for 50 percent of the truck market, says Accavitti. The crew cab replaces the massive four-door megacab that Accavitti acknowledges was so big that many customers couldn’t fit it into their garages. The 2009 Ram will get more oomph under the hood with a re-engineered 380-hp, 5.7-liter Hemi V-8 that has variable valve timing and a cylinder cutoff system. A light on the instrument panel tells the driver when four cylinders are firing instead of eight, conserving fuel.

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