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Chrysler Forging Ahead in Europe

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Chrysler Forging Ahead in Europe

By Eric Mayne

WardsAuto.com, Jun 17, 2010 9:00 AM

SAUSALITO, CA – Chrysler Group LLC is pondering its next international-market move as it pushes a key initiative to restructure its European sales network, a senior executive says.

“At the moment, we own the distribution,” says Mike Manley, lead executive for the auto maker’s international organization. “We have the sales companies in the markets. We’re transferring those over to Fiat (Automobiles SpA).”

That plan to leverage the strong presence of alliance partner Fiat outside North America is “about halfway” complete, Manley tells Ward’s here at a media preview for the all-new ’11 Jeep Grand Cherokee.

Now the auto maker is “looking at Latin America,” he says, almost bristling at the notion Chrysler’s international-market aspirations have been superseded by headline-grabbing projects such as the Grand Cherokee launch – for which Manley also has responsibility as Jeep president and CEO.

Chrysler’s plans for the international market are “very much not on the back-burner,” Manley says firmly.

Manley credits Chrysler CEO Sergio Marchionne, who also heads Fiat, for instilling not only a goal-oriented culture but one that values the processes to ensure goals are met.

“One of the things that we have to do as a company, that we’re really focused on, is really make sure that we look at where the key opportunities lie,” Manley says. “It’s part of the discipline that Sergio has brought.”

Manley: Dodge to be “specialty brand” in Europe.

Chrysler has about 1,000 dealers in Europe. “Over a 4-year period, we think that number will increase by about 25%,” Manley adds.

Another feature of the European-market moves is the replacement of the Chrysler brand with Fiat’s Lancia marque in markets other than the U.K. and Ireland. Lancia has no presence in those regions.

In those areas where Lancia dealerships already exist, they either will compete or the stand-alone stores will be eliminated.

“Chrysler, really, in Europe was known for two nameplates: the Grand Voyager and the 300,” Manley says. “We really spent our money on building the nameplates, and those nameplates will continue to exist into the future.”

Now the focus will be on brand-building where investment, historically, was “limited,” he adds.

“The problem was we had three brands, nearly 20 vehicles and less than 1% market share,” Manley says. “When you have that combination, investing in brand becomes very difficult.”

While Lancia will occupy premium-brand status and Jeep – the strongest of Chrysler’s brands – reinforces its cachet with the Grand Cherokee – Dodge will target the “specialty brand” niche, he says.

“Because a lot of people like (Dodge’s) iconic American styling,” Manley adds.

Meanwhile, the Ram is restricted to the Middle East and Latin America because fullsize pickups are too unwieldy for European roads. Vehicles along the line of the Dakota small pickup are closer to the “heart” of that market, Manley says, offering no hints about plans to replace the vehicle.

A Dakota replacement is on the bubble, according to Chrysler’s 5-year product plan. A successor based on the Fiat Strada has been under consideration.

Against a backdrop of April’s double-digit hikes in Asia, Africa, the Middle East, Eastern Europe and Russia, Chrysler says its sales in Western Europe plummeted 21%, compared with prior-year.

Latin America saw just a 2% uptick, yet that is where the auto maker is setting its dealer restructuring sights next – if only because Fiat is a dominant market force in the region.

Jeep, in particular, resonates in South America, Manley says. But because of oppressive import duties, the brand is a niche player.

“Working with Fiat, there are lots of opportunities,” Manley says, reasserting plans to build Jeep vehicles in the region.

“Definitely,” he adds. “Not potentially.”

Fiat Automobiles parent Fiat Group has three assembly sites in Brazil and one in Argentina. The lone passenger-vehicle plant is in Betim, Brazil, while the other three produce commercial trucks for Fiat’s Iveco SpA division.



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