This article came from the May 1st issue of "Automotive News:'
CHRYSLER LOOKS TO IMPERIAL TO GO UPSCALE
Rick Kranz
rkranz@xxxxxxxxx
NEW YORK-- Chrysler executives believe Cadillac and Lincoln buyers are
available for the taking. Ditto for some buyers of the BMW 5 series.
And the car to woo them? A premium sedan such as the luxurious
Chrysler Imperial concept. The Imperial would be positioned above the
300C, an upscale trim level of the 300 with a Hemi V-8.
Although the Imperial is a concept, the Chrysler group's Joe Eberhardt
believes the automaker has enhanced the Chrysler brand to the point
that it can credibly add a higher priced sedan such as the Imperial.
Eberhardt says it could be priced several notches above the 300C, whose
sticker price starts at $34,400, including shipping. "I do think a
brand news to evolve, needs to be developed," says Ebergardt,
Chrysler's executive vice president of global sales and marketing. "It
does take time. With each successive product success, you get to notch
it up a little more."
Eberhardt is mum on potential pricing for a premium sedan but says the
brand is not ready for a car that starts at $50,000.
The automaker sold 144,068 Chrysler 300 sedans last year, about a third
of which were 300C models. First quarter sales of the 300 this year
totaled 39,332 units, up 8.5 percent from the first quarter of 2005.
Sales were helped by modest customer or dealer incentives of up to
$1,000 during 2005 and 2006. But Eberhardt points to the 300's average
transaction price as a measure of the car's and of the brand's real;
success.
The average transaction price of all Chrysler 300 models, after
rebates, in the first quarter of 2006 was $30,927, according to Power
Information Network. The success of the car shows there is not
necessarily a price ceiling" for the 300 or the Chrysler brand, says
Eberhardt, interviewed at the New York Auto Show.
"We are selling it from $23,000 up to $43,000, $44,000 (and beyond),
which shows we can very successfully spread a vehicle like the the 300
across $20,000 or so."
Jack Trout, president of Trout & Partners, a marketing strategy firm in
Old Greenwich, Conn., says the 300's success gives the the automaker
the opportunity to move the Chrysler brand upmarket. "They have
generated some excitement for the Chrysler line with the styling and
the Hemi, so i think they have enough there to nudge it up," trout
says. But "I would be very nervous about getting too far into prestige
land."
How much space could be placed between the base 300C and, say, the
Imperial? "I would say $5,000," says Jeff Schuster, executive director
of global forecasting at J.D. Power and Associates. He adds "$7,000
would be kind of capping it." Such a sedan, Schuster says, would need
to be a :unique Chrysler product and not get into Mercedes Benx
territory."
Jim Sanfilippo, executive vice president of the consulting firm AMCI in
Bloomfield Hills, Mich., says the automaker's plans to add a strecthed
300 model this fall show that Chrysler is already moving the brand a
bit upmarket. "Basically, they have confirmed their idea of going
premium," Sanfilippo says.
Chrysler's Eberhardt says baby boomers would be the target for the
Imperial.
MY THOUGHTS:
I see 3 things wrong in the new Imperial concept as presented above.
First, the seeds of the new Imperial's failure are contained in the
very first paragraph, in which Chrysler executives are said to believe
that a new Imperial can steal away Cadillac and Lincoln buyers-- and
BMW buyers.
Nonsense! I just spent a year selling Cadillacs (and Pontiacs and
Nissans) and I can tell you that not once in that entire time did
anyone in my dealership ever take a BMW in trade on a new Cadillac.
Not one. New BMW buyers are simply not interested in Cadillacs or
Lincolns-- period-- and they won't be interested in a new Imperial,
either.
If Chrysler seriously believes this, that they can make a car that
competes with BMW and Lincoln and Cadillac, then the new Imperial will
be another in a long series of bastardized stepchildren like the
Cadillac Catera-ble or the Lincoln LS-- cars whose schizophrenic
natures are neither European enough to please a European nor American
enough to please an American. Folks, please decide what you want the
Imperial to be before you make it. It can either compete against the
Cadillac and the Lincoln, OR the BMW, but not both.
2. If you step back and look at this article what you see is a perfect
illustration of what is wrong with the American car industry right now,
and a clear indicator of why we may not even have an American car
industry in the next few years.
The reason is simple: American car makers are MARKETING DRIVEN.
The most successful carmakers in the world right now (Toyota, Honda,
etc.) are ENGINEERING DRIVEN.
Doubt my word? There are 4, count 'em, FOUR marketing executives
quoted in this article. There is not a single engineer quoted or even
interviewed. In other words, the very things that made Chrysler the
brand it was in its heyday-- and the very thing that makes us remember
the Imperial 50 years later-- engineering greatness-- is not even
playing a role in the decison making process to build the Imperial. It
is all based on market based calculations and mumbo-jumbo.
Let me give you an example. When Honda first came to this country they
built only motorcycles. Then they only built small, 2 door cars.
When, in the 1970's, they decided to venture out into the big world of
4 door sedans, their primary concern was not "How can we position this
vehicle?" or "How much more can we ask for it?" Their primary concern
was "Can we build a good 4 door sedan?" Because to the Japanese
mentality to fail to build a good car is a far greater loss of face
than to build a car and not see it sell well. So they made damn sure
from an engineering point of view that the car they built would be a
great 4 door sedan.
By the way, the car they came out with was the Accord. The rest is
history.
Folks, American car buyers are drawn to and motivated by QUALITY. When
American car makers figure this out and stop worrying about which
celebrity they can sign up to do their commercials, that is the day the
American car industry will turn around.
3. Last, but not least, they say that the new Imperial will be
targeted at Baby Boomers. Well, I'm a Baby Boomer and I think it
stinks. If they want to sell it to Baby Boomers, they need to GET A
BABY BOOMER TO DESIGN IT. Right now, this car looks as if it was
designed by a 28 year old for a 22 year old.
Just my opinion,
Mark McDonald
Back to the Home of the Forward Look Network