“Detroit disease” hits Chrysler

Chrysler was once admired for its toughness, even at a point where the atmosphere attracts falling sales and massive losses. However, according to some analysts, it seems that Chrysler has lost its protective layer and has finally suffered the so-called “Detroit disease.”

Automotive reports show that Chrysler will lose $ 1.5 billion in the third quarter, roughly more than double what it expected in advance. This loss is due to slow sales of gas-guzzling trucks and SUVs.

According to Tom Appel, editor of Consumer Guide Automotive, “The company has been particularly affected by the public’s growing desire for smaller, more fuel-efficient cars. But the problem may be more perception than reality.”

“I think Chrysler is being hurt by the general impression that its large and so far well-received cars like the Chrysler 300 and Charger are not very fuel efficient, so there is a bit of a backlash,” Appel added.

Chrysler President and CEO Tom LaSorda said the company intends to be more competitive internationally with a portfolio of smaller cars. “We are addressing these issues and moving our product portfolio to a mix more in line with recent realities and market trends,” LaSorda explained.

“But while new products are important, Chrysler, like Ford and GM, needs to better manage their car and truck inventories with flexible manufacturing processes like those used by Asian manufacturers,” said Kevin Reale, research director at AMR Research. .

Analysts also say that Chrysler’s lineup has other problems. One problem is its limited offering in the midsize SUV market. For one thing, Dodge Durango sales have fallen sharply. To avoid falling sales, the automaker is tweaking Chrysler auto parts to establish an astonishing lineup.

New Chrysler products launching this year include the Sebring sedan, Jeep Compass, Jeep Patriot and the compact Dodge Caliber. “Dodge is about to launch the Nitro midsize SUV, so that will help them in the area of ​​perception of fuel economy, but when it comes to minivans, someone has to invent something new,” added Appel. “The expectation is that the new Dodge Caravan and Chrysler Town & Country minivans will be something new, but their launch is still a long way off, they aren’t supposed to come out until mid-2008.”

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