Monday, September 25, 2006

Chrysler faces a rough ride

MARK PHELAN | BEHIND THE WHEEL:

Chrysler slashes production and predicts a billion-dollar loss as sales fall.

Another automaker on the rocks. Here we go again, no?

No.

Chrysler's problems were foreseeable, albeit exacerbated by gasoline prices around $3 a gallon.

Anybody who studies automakers' product cycles knew Chrysler was in for six to nine months of rough sledding, starting about now.

The company's two best-selling models -- minivans and the Ram full-size pickup -- are to be replaced between now and early 2008.

Once the new models hit the road, it should be clear sailing for Chrysler again.

Sales of virtually all cars and trucks slow when they get long in the tooth. Automakers respond by cutting prices, adding incentives, building fewer or all of the above.

Chrysler's in all-of-the-above territory.

The company has several new models going on sale now and over the next few months. They've been received well so far, but even a hit compact car like the Dodge Caliber isn't enough to take the sting out of aging minivans and stalled pickup sales.

The other new models coming include:

• The Jeep Compass, which just went on sale.

• The Jeep Patriot compact off-roader.

• Two- and four-door versions of the all-new Jeep Wrangler.

• The Dodge Nitro, which uses the underpinnings of the Jeep Liberty.

• The Chrysler Aspen, a luxed-out version of the Dodge Durango SUV.

• The Chrysler Sebring midsize sedan.

• The Dodge Avenger midsize sedan.

The Jeeps are all likely to sell well. Jeep is one of the strongest and most admired brands in the world.

Adding twin models like the sophisticated Compass and rugged-looking Patriot should draw new buyers. With prices starting under $15,500, both models -- the Patriot will be the least expensive Jeep -- should also bring new customers into the Jeep fold.

The low base prices mean neither will offset lost Ram sales, however.

The Wrangler is another matter. It should earn Chrysler buckets of money. The new model improves on room and comfort without eroding the vehicle's signature rough-and-ready looks and capability. The four-door model is such a natural addition to the line that the question is not whether it will succeed but why Jeep didn't build it sooner.

Those vehicles and the Caliber exemplify the reason Chrysler has looked so strong over the last couple of years: Every model it introduced stepped out of the box, offering some unique attribute that won raves.

The Nitro, Aspen, Sebring and Avenger, on the other hand, tiptoe to the edge of the box and peek over.

Chrysler's not on the rocks, but it's not yet strong enough to weather an ill wind blowing on trucks and minivans without taking on water.

Chrysler won't truly be shipshape until a couple of key models can spring a leak without sending people scurrying for the lifeboats.

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