Chrysler Plans, Chrysler Fumbles

March 9th, 2012

I saw at least five news stories about how Sergio Marchionne’s joke about not releasing the new Dart on April Fool’s Day “fell flat.” April 2, a Monday, was always the scheduled date, so the boss was just trying to be cute. Most writers did not pick up on the joke, a fine testament to their lack of humor if not sense.

More significant is the release of Chrysler’s annual report (10-K), from which Car and Driver extracted some interesting highlights. Here are a few:

1. The Alfa-Dodge Dart platform (called CUSW) will underpin several Chrysler products, among them the Chrysler 200 and Jeep Liberty.

2. Upgrades are due for the Ram 1500 and the Jeep Grand Cherokee.

3. New transmissions (the ZF 8-speed and the Fiat dual-clutch) are coming, with a 9-speed arriving in 2013. Where will this gearheadedness end?

4. What C&D didn’t say is that Chrysler Group’s 2011 net income was finally in the black at $183 million (after a $652 million loss in 2010). Net revenue for the year was $55 billion, up 31 percent over 2010. It’s the company’s first profitable year since 1997.

CEO Marchionne took no salary, bonus or stock options. Compare Ford’s Alan Mulally, who just took $34.5 million in stock for a 2009 performance incentive, on top of his (last year’s) $9.45 million bonus and $1.4 million salary.

We’ve written about the Dart before, with high hopes. Anything will be better than the Caliber, which finally went offline last December. You can’t blame Marchionne for that car, but the jury is still out on Chrysler’s new policy of selling pre-owned, warranteed competitors’ cars on their lots.

The idea, the company hopes, is to give its used-car buyers other options—and then convert/entice/persuade them into buying a Chrysler or Fiat product. They call this gambit the Diversified Certified program. Well, of course dealers think it’s a great idea.

However, says automotive.com,

It will be awkward if Chrysler is cuckolded by a wave of customers attracted by the idea, but driving off in a certified Ford with a warranty paid for by Chrysler is like a terrible example of automotive alimony.

The grammar is horrendous, but you get the idea.

What do you think will be the outcome of Diversified Certified? Give us your prediction.

—jgoods

Find Used Cars in Your Area at CarGurus

Used Chrysler 200
Used Jeep Liberty
Used Ram 1500
Used Jeep Grand Cherokee
Used Dodge Caliber

Be Sociable, Share!

  1. jgoods
    March 10th, 2012 at 11:24 | #1

    @ Randy
    @ panayoti
    Great comments, guys, and thanks. Sr. P., your story is all too common. As Randy says, hang in there and hopefully your luck will change. Have you tried advertising on CarGurus? You’ll get a good sense of the market for your car, and if it’s a good deal, people will respond from beyond your local area.

  2. Randy
    March 10th, 2012 at 08:14 | #2

    I think when you get into the 20K and plus range on used car prices it can get a bit difficult. You’re already way beyond the price range of most used car buyers, and with the upwards compression in the used car prices, you get into the range of new cars, although perhaps a lesser model than the one you’re selling. Local economic conditions can compound the difficulty. This is a rough time of year to try to sell a used car, but as we move into spring, it gets better, so I hope your luck changes. Sometimes it’s just a matter of time before the right buyer comes along.

  3. panayoti
    March 9th, 2012 at 19:31 | #3

    Sad to say that most people aren’t equipped to deal with a used car dealer and the beating that they take is brutal. I agree that it is “not smart” to buy from a dealer if you are looking for a deal. As mentioned above, their markups are insane yet people line up at their lots and go home bragging about the “deal” that they got. The only tried and true axiom that sort of still works is to do an insane amount of homework, which most people generally don’t do, with a car that you know well (maybe a neighbor or a relative). Then the “fun” begins with checking out the used car sites to see what a comparable car is fetching on used car lots across your area and then use what little negotiating skills you might have and try to haggle with the dealer.

    I am also close to a new car purchase and to avoid the brutal trade in negotiation, I visited the dealer lots of my vehicle, and found that my model was fetching $24-$25K. When I approached the salesman for a quote on my vehicle, which had less miles and more options than those on the lot, the best he would offer was $19K. He was upset that I walked away. He demanded to know why I refused his “reasonable” offer. When I told him that I wasn’t in the business of letting him take my vehicle, mark it up $6K and put money in his pocket rather than mine, he paused and said that the dealer had to make money somewhere and since he didn’t make any money on a straight deal, it had to be made up somewhere. Sad to say this is true of all dealers and prospective buyers should be warned to do their homework.

    In the meantime I have my vehicle advertised at $21,500 and despite 6 inquiries, I can’t sell my vehicle. Now comes the realization that in my area, despicably poor, I won’t be able to sell this pristine vehicle. So now what would you do? I’m $2K under book and it won’t sell. So I guess I have to keep my car one more year or take it to the dealer and take it in the shorts. Nah, I just won’t do that. But many do. Caveat emptor!!

  4. Randy
    March 9th, 2012 at 16:49 | #4

    The dirty not-well kept secret is that car dealers make most of their money in the used car lot and the service department. All the “diversified certified” program is a phony-sounding name for an expensive used car warranty program that is typically only for the dealer’s franchise brands. Chrysler dealers understandibly need to pump up their used car business given that Chrysler products aren’t great sellers to start with. Not than anyone should buy from these guys in the first place. Tell ya a story– I’ve been looking for a car and have noted several being offered by private sellers. Saw one that I had looked at suddenly show up on a dealer’s lot– same car, no warrany, just sold to the dealer by the private owner. The car was marked up $4000 from what the seller was originally asking, and I doubt the dealer paid that. That amounts to a probably 50% markup… for nothing. Not smart to buy from a dealer unless you know you’re getting a really good deal.

  1. March 15th, 2012 at 13:38 | #1