Lack of All-new Jeep Grand Cherokee Hurting DaimlerChrysler's Bottom Line?

Date 2002/5/10 0:00:00 | Topic: Sales

Analysts are concerned that DaimlerChrysler's short-term outlook is weak without all-new Jeeps and trucks to compete.

Yahoo News! is running an interesting article about the fact that DaimlerChrysler may be falling behind its rivals in the 4X4 and truck markets due to its lack of new models in the next few years. Here's a snippet:

It may be turning the corner, thanks to cost cutting and an improving economy, but some analysts think a lack of new products is hindering Chrysler Group's overall recovery.

Company executives vow that Chrysler, part of the German-American auto maker DaimlerChrysler AG, will launch 11 new vehicles in the next three years.
But those vehicles which include a convertible version of the PT Cruiser and the Pacifica crossover vehicle aren't coming fast enough to compete with the import auto makers and an invigorated General Motors Corp, analysts say.
"The problem is the dearth of new products to stimulate demand," said S&P Equity Group analyst Efraim Levy. "You can only save your way to profits for so long; you have to have products to sustain that. In order to have long-term growth, Chrysler has to keep the hits coming."
Fresh products are the key to the success of any auto maker; they create demand and help minimize the use of generous cash rebates and low-rate financing to sell cars.
In the fall, Chrysler plans to launch an all-new Dodge Viper, the PT Cruiser Turbo and a heavy-duty version of the Dodge Ram.
Next year, Chrysler will roll out high-performance versions of its Dodge Ram and Neon, the Chrysler Pacifica crossover vehicle and the Chrysler Crossfire roadster. In 2004, Chrysler plans to launch the convertible PT Cruiser.
Analysts are also concerned that Chrysler's short-term product plan doesn't include many trucks to compete with GM and other rivals.
In addition, too many of those products are updated versions of existing models instead of entirely new vehicles, they say.
Specifically, Chrysler needs to replace its aging Jeep Grand Cherokee SUVs and full-size Dodge Intrepid cars, which haven't had a major redesign since the late 1990s, said Art Spinella, an analyst with CNW Marketing/Research.
Already, GM has launched mid-sized sport-utility vehicles such as the GMC Envoy and the Chevy TrailBlazer, which have been hot sellers in the last several months.
GM also plans to launch such products as the Hummer H2 this summer and the Cadillac SRX crossover vehicle and Pontiac Grand Prix next year, which could also put pressure on Chrysler's sales.
Chrysler spokesman Rick Deneau wouldn't comment on future vehicles beyond those already announced.
However, Burnham Securities analyst David Healy said the next major changes to the Grand Cherokee and the Intrepid aren't due until around 2004.
Be sure to check out the entire article.

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