Caliber leads Dodge European invasion

ROCKFORD REGISTER STAR

2007 Dodge Caliber SRT-4. (Dodge)

BELVIDERE, Ill. — The Dodge Caliber is not just DaimlerChrysler’s attempt to reinvent itself in the small-car market in the United States, it’s the lead car in the company’s attempt to introduce Dodge to the world.

Since making its debut on U.S. dealer lots early this year, salespeople have sold 75,791 of the aggressive-looking, sporty coupe/SUVs. Those are solid numbers, especially considering the car didn’t make it to all lots until March. Still, the Caliber’s numbers are behind the 110,370 Dodge Neons sold through the first 10 months of 2005.

But increasingly DaimlerChrysler is looking to add sales in markets from Europe to Sri Lanka, and the Caliber is cracking into countries where the Neon never ventured. Through October, the company has sold 12,175 Calibers to buyers outside the U.S. That’s more than the full-year international sales totals of the Neon in 2002, 2003, 2004 and 2005.

"We’ve had Jeep and Chrysler out there (internationally) for 10 or 15 years. We introduced the Dodge Viper, but that’s aimed at a niche group of buyers; the Caliber is our first volume car for the Dodge brand internationally," said Thomas Hausch, the former Mercedes-Benz executive who is now running the Chrysler Group’s international operations, which include dealerships in about 120 countries.

"It’s very affordable, very aggressive, very price-oriented with a lot of thoughtful features," Hausch added, "but it’s also not an easy segment to get into. There is formidable competition in the (small-car) segment."

Indeed, while trucks and SUVs are the most common vehicles found on U.S. roadways, the small car is king in places such as Western Europe, where drivers in countries like Germany, the United Kingdom, Italy, Belgium and France typically pay $4.50 to $6 a gallon for gas. In Europe, the Caliber is competing with European stalwarts such as the Volkswagen Golf, Peugeot 307 and the Mazda 3.

The early returns have been encouraging. In September, DaimlerChrysler sold 3,011 Calibers internationally, and the company hasn’t even rolled it out to dealers in Japan or much of Asia. That was better than the top month for the Neon in any year this decade.

When you factor in international with U.S. sales of the new Calibers and Jeep Compasses and the final few Neons, the company sold 117,415 of models made in Belvidere compared with the 110,370 Neons sold worldwide through October 2005.

September was a stellar month overall for DaimlerChrysler’s international efforts; the company sold 20,493 vehicles outside the U.S., a 5 percent increase from September 2005. Including October, international sales have increased year-over-year for 17 straight months and are up 14 percent compared with 2005. It’s a silver lining for a company whose U.S. sales are down 9 percent — from nearly 1.8 million units through October 2005 to just over 1.62 million through October 2006 — because buyers have been shifting from trucks and SUVs to smaller cars.

"We’re very happy with the Caliber’s reception," Hausch said. "If you look at joint brands, Chrysler, Jeep and Dodge have been described by some groups as the fastest- growing brands in Europe, and Caliber is responsible for much of those gains."

All of the various versions — diesel, nondiesel, left-hand and right-hand drive — of the Caliber and Compass and eventually the Patriot, which will go into retail production in December, are being built in Belvidere, except for the Calibers and Compasses on sale in Venezuela. Because of steep fees charged on imports, workers at a plant in Venezuela make the cars for that country’s buyers.

The fact the Belvidere plant is making so many combinations has been the lone rough spot in the Caliber’s launch. After spending $419 million last winter to renovate the more than 40-year-old staff and retrain its unionized auto workers to build cars in the Japanese-style team systems, software problems in the 3.9 million-square-foot plant’s robotic body shop has caused frequent shutdowns, slowing the flow of available cars for sale. The body shop problems have been cited for slowing the sales gains in the U.S. and are hurting international sales as well.

"The full launch is going to take its time," Hausch said. "We had very aggressive plans and they were overfulfilled from a demand standpoint."

Erich Merkle of Michigan-based auto market research firm IRN Inc. cautioned that although it’s good that DaimlerChrysler is increasing its sales internationally, that alone won’t be enough to lift its flagging earnings. The company reported a $1.5 billion loss in the third quarter.

"It will be helpful, but you’re not looking at sales of 100,000 Calibers," Merkle said. "You’re looking at 15,000 to 20,000 if you’re doing well. They still need to focus on success in the North American market. That’s where their bread is buttered."