The interview with Sergio Marchionne, CEO of both Fiat and Chrysler, related in the July 3-4 edition of The Wall Street Journal, and conducted by Paul Ingrassia, includes Mr. Marchionne's plans to position Chrysler and Fiat's six brands in the U.S. new vehicle marketplace. Mr. Marchionne says that Dodge will focus on performance, Chrysler on the mainstream market, Jeep on SUVs and Ram on trucks. Several of these efforts are well along. Jeep is already pretty much where it needs to be, and will be more clearly defined when one or more of its two crossovers, Compass and Patriot, are dropped. Jeep also will benefit going forward from the recent discontinuation of Hummer, a make that could have been a direct challenge to Jeep. Dodge has been promoting performance for years.
Positioning Chrysler as a mainstream OEM brand will be a change – heretofore Chrysler had been a mid-level make, a la Buick, with dreams of even being a luxury make going up against Cadillac or Lincoln. To be re-positioned as a mainstream make, Chrysler will need a broader product portfolio and these products will need to be priced competitively with those from other mainstream brands, including Ford and Chevrolet. This certainly can be done but it will take a while as customers' perceptions of the brand will need to be changed (as opposed to reinforced as in the cases of Jeep and Dodge).
Two other thoughts come to mind. One is that the brand positioning strategy laid out by Mr. Marchionne in the Wall Street Journal article implies the company will not offer a brand in the luxury market other than the niche Alfa Romeo. This is actually in keeping with other thoughts he mentions, including that "I don't want to conquer North America. I only want a share." But one benefit of a high-end brand is its profits, which can be used to fund product programs company-wide. Without these profits, which Chrysler's competitors currently enjoy, Chrysler will need in the long-run to find other sources for funds for product programs.
Lastly, as mentioned in the same Wall Street Journal article by Mr. Ingrassia, it is no secret that Chrysler has struggled in vehicle quality as measured by both J.D. Power and Associates, and Consumer Reports. If Mr. Marchionne wants to widen the universe of shoppers for each of the six current and upcoming Chrysler brands, it might make sense to improve the company's quality image to attract some owners who currently pass by Chrysler dealerships on their way to Asian, Ford or GM stores.
Posted by Tom Libby, PolkInsight Advisor, Polk (07.21.2010)
Positioning Chrysler as a mainstream OEM brand will be a change – heretofore Chrysler had been a mid-level make, a la Buick, with dreams of even being a luxury make going up against Cadillac or Lincoln. To be re-positioned as a mainstream make, Chrysler will need a broader product portfolio and these products will need to be priced competitively with those from other mainstream brands, including Ford and Chevrolet. This certainly can be done but it will take a while as customers' perceptions of the brand will need to be changed (as opposed to reinforced as in the cases of Jeep and Dodge).
Two other thoughts come to mind. One is that the brand positioning strategy laid out by Mr. Marchionne in the Wall Street Journal article implies the company will not offer a brand in the luxury market other than the niche Alfa Romeo. This is actually in keeping with other thoughts he mentions, including that "I don't want to conquer North America. I only want a share." But one benefit of a high-end brand is its profits, which can be used to fund product programs company-wide. Without these profits, which Chrysler's competitors currently enjoy, Chrysler will need in the long-run to find other sources for funds for product programs.
Lastly, as mentioned in the same Wall Street Journal article by Mr. Ingrassia, it is no secret that Chrysler has struggled in vehicle quality as measured by both J.D. Power and Associates, and Consumer Reports. If Mr. Marchionne wants to widen the universe of shoppers for each of the six current and upcoming Chrysler brands, it might make sense to improve the company's quality image to attract some owners who currently pass by Chrysler dealerships on their way to Asian, Ford or GM stores.
Posted by Tom Libby, PolkInsight Advisor, Polk (07.21.2010)
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