Archive for Chrysler

Other than the obvious buyout by another car company - General Motors, two non-automotive companies have been interested in Chrysler - the Blackstone Group and Cerberus. Investment firm Blackstone is currently already in the auto industry, and has US$125 billion in the bank. It currently has 58% ownership in TRW and has a stake in American Axle. Cerberus is currently looking at Delphi, and already own 51% in GMAC.

Blackstone has been given access to confidential Chrysler data to determine whether the firm is worth buying or not, while Cerberus has hired Chrysler’s former COO to advise it on a possible bid. This former COO is none other than Wolfgang Bernhard, who was involved in turning Chrysler around to a short-lived earnings rebound a few years back, but somehow got booted off the team in 2004. He then joined Volkswagen, and left in January 2007.

Other companies said to be interested in possibly taking up stake in Chrysler include Magna International and General Motors.

GM said they were interested. Renault-Nissan said they had too much on their hands. Hyundai declined any interest. SAIC of China said no interest in anymore foreign buyovers. Here comes Magna International, to Chrysler’s rescue.

Magna International has always been on the lookout for Chrysler. On the eve of the Jeep Wrangler’s launch in August 2006, Chrysler found itself suddenly without a paint-shop supplier. Magna’s chairman Frank Stronach sent in a team from Magna Steyr, adding new equipment to the Toledi Supplier Park and helping Chrysler with talks with the UAW so that the Wranglers could roll off the assembly line on time.

This is of course understandable - 26% of Magna sales come from Chrysler. Total sales for 2006 was US$24.18 billion - 26% is about US$6.28 billion. That’s alot of money. Frank Stronach is also the highest paid auto parts manufacturer executive at US$33.3 million a year in 2005.

Hence as a move to protect it’s contracts with Chrysler, as well as help out a major customer, Magna starts to make it’s moves to buy over Chrysler, with Stronach confirming interest to US media today. But how will Magna buy Chrysler, a company with 2.5 times the revenue of Magna? What makes it worse is despite raking in that much revenue, it still posted a loss of US$1.5 billion in 2006.

More updates on the potential break-up of American-German automotive giant DaimlerChrysler. DaimlerChrysler recently announced it might sell off the Chrysler group, viewed by some as going back on it’s word for commitment in making the partnership work. DaimlerChrysler issued a statement to the media today saying it’s future strategy for Chrysler’s could only be decided in weeks or months.

Chrysler CEO Tom LaSorda has decided to shed some light on the matter, whatever light he is able to shed without implicating himself legally of course. The full unedited email is available after the jump.

Click here to read the rest of Chrysler CEO Tom LaSorda’s email to employees

Jeremy Clarkson of Top Gear compares the Chrysler 300C SRT8 to the E60 BMW M5. Not a bad comparison I would say, as the Chrysler 300C was based on a previous version of the Mercedes Benz E-Class, now called the Chrysler LX platform. The SRT-8 version features a 6.1 liter Hemi V8 engine making 425hp at 6,200rpm and 569Nm of torque at 4,800rpm. This is the same engine used in most SRT-8 versions, including Dodge and Jeep vehicles.

It’s interesting how the two companies chose to engineer the top of the line performance versions of their mid-sized luxury sedans. The BMW M5 proves to be a real driver’s car - but what about the 300C SRT-8?

Video after the jump.

Click here to read the rest of E60 BMW M5 vs Chrysler 300C SRT8 Video

Ever since DaimlerChrysler announced that the sale of Chrysler and it’s brands (Dodge, Jeep) to another party is now an option, there has been plenty of rumours, supposed insider news as well as speculation on who the new buyer would be.

Seen as a forefront to the Chrysler purchase is General Motors, who analysts think would purchase Chrysler as a defensive move against import marques like Toyota. Analysts think purchasing Chrysler would give GM a US$9 billion value in terms of product line-up, operating efficiencies including reduced R&D and advertising costs. Stock market analysts are mixed over the issue, with John Murphy of Merrill Lynch rating GM shares as a buy, while Jon Rogers, a New York-based analyst at Citigroup Investment Research rated them as a sell. DaimlerChrysler shares remain unrated.

Some think Hyundai may be a good match for Chrysler, and Hyundai has already worked with Chrysler before on certain projects including the Global Engine Manufacturing Alliance project along with an accompanying platform, as well as rebadging Hyundais as Dodge cars in Mexico. Hyundai needs more plants in the US, something Chrysler has. Hyundai currently only has one plant in the US. Hyundai needs a V8, Chrysler has the Hemi. Chrysler used to own a 10.5% stake in Hyundai. Hyundai is good at small cars, Chrysler is not - Chrysler’s good at big cars, Hyundai isn’t.

Other speculated potential suitors are the Nissan and Renault alliance, as well as SAIC and Chery of China. Chrysler and Chery already have an agreement for Chery to assist Chrysler in building small compact cars, something that Chery does best. Foreign automakers like Toyota, Hyundai and the Chinese makes are cited as one of the reasons GM would buy Chrysler, as having a foreign Korean or Chinese marque gain access to Chrysler’s extensive dealer network would be a problem - the American companies already have problems fending off the Japanese.

Anyway, whether GM takes up Chrysler or not, they are already in some form of joint venture talks now, as General Motors might give Chrysler access to it’s GMT900 platform large-SUV, something that Chrysler does not have an equivalent in it’s line-up.

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DaimlerChrysler might drop Chrysler Group

DaimlerChrysler today announced that it is open to the possibility of dropping the loss-making Chrysler group from it’s organization structure, or finding new partners for the American automotive group. Previously, DCX stood by Chrysler with a long-term commitment since it’s merger in 1998, but perhaps a predicted operating loss of more than US$1.31 billion foreseen by analysts - the third full-year loss since the merger is just too much for DCX to take. This loss will be offsetted by an earnings rebound at premium passenger car division Mercedes Benz and solid results from its market-leading truck manufacturing division.

The announcement pushed Chrysler stock up by more than 5%, up to it’s highest level since June 2002 - peaking at US$67.43 per share. DCX CEO Dieter Zetsche is expected to announce that an investment bank has been hired to review strategic options for the group. However, divesting the two groups is easier said than done, as cutting apart the two companies would cost an estimated US$34 billion, eclipsing DaimlerChrysler earnings, which is expected to be US$1.92 billion for the Q4 of 2006.

I find it funny that such an announcement should be made, announcing the possible separation of two lovers that were never meant to be on Valentine’s day.

Source: AutoNews

After news of talks between Chrysler and Chery surfaced in May last year, Chrysler group CEO Tom LaSorda has finally signed a letter of intent with Chery Automobile Co to develop a small car for the group, but this is pending approval by DaimlerChrysler supervisory board, which will meet this month to discuss the matter. Other partners which were considered were Mitsubishi Motors Corp, and Hyundai Motor Co Ltd, but it is Chery who managed to clinch the deal in the end.

The collaboration is expected to be approved by the DCX board, and manufacturing will soon begin, according to Chrysler spokesman Jason Vines. It is not known for now Which badge under the Chrysler group will appear on the grille of this new small B-segment car, but the logical choice would be Dodge, the group’s value brand. Chrysler previously exhibited a concept small car, the Dodge Hornet, an aggressive-looking muscular small car, but the new compact from the Chery-Chrysler collaboration will not be the Dodge Hornet.

The car is expected to be built in China, as Chrysler says it cannot profitably produce a small car in the US. Chrysler has been in talks with Chery for nearly a year before this agreement was reached. More details will be released in a month’s time or earlier. The new small car will compete against the Toyota Yaris, Chevrolet Aveo, Honda Fit and Nissan Versa in the United States. It will also be sold in Canada, Mexico, Europe and possibly China. While this is a start for Chery’s involvement in the US market, but it is still keen to export it’s own cars under it’s own brand to the US as the small car will not be Chery-branded.

2006 was not a good year at all for Chrysler dealers in the US. The company kept cranking out minivans, medium to big cars and SUVs throughout the whole summer despite warnings and suggestions by dealers against the move. Chrysler just went on and on with overoptimism fueled by the success of the Chrysler 300. Despite employee pricing sales incentives and other promotions, dealers choked on inventory and floorplan bills skyrocketed with dipping sales. The Chrysler group posted a US$1.48 billion loss in the third quarter 2006. Will this new small car give Chrysler and it’s dealers a much needed boost? And even if so, what is Chrysler going to do with it’s sales bank of unsold cars? Instead of slowing down production when demand dropped, production was kept at full capacity, and now unsold Chrysler cars are just lying around in storage areas. Sound familiar?

Check after the jump for an interview with Tom LaSorda.

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2006 Dodge Hornet Concept
Dodge Attitude

Click here to read the rest of Chrysler and Chery sign small car letter of intent

Some news regarding collaboration between DaimlerChrysler and Chery. Previously it was reported that Chrysler will name it’s subcompact car partner by the end of 2006, with talks currently on-going with a few partners. Subcompacts which are known for frugal fuel consumption - important in these high fuel price days - account for 1% of the overall US market currently, but it is expected to double in amount next year.

DaimlerChrysler is said to be in final talks to build cars in China and export them to the US under the Dodge brand to take advantage of the cheaper costs there. This move will follow Honda Motor Co’s recent recision to export vehicles built in China. However, DaimlerChrysler is keeping mum on the issue, and it is said that this collaboration is very controversial within DaimlerChrysler, with opponents questioning whether cars produced in China by Chery can meet quality standards.

Other partners being considered are Mitsubishi Motors Corp, and Hyundai Motor Co Ltd. “We know we can’t do it alone. The capital expense alone would be very high, said Chrysler Group CEO Tom LaSorda.

Source, 2

Chrysler Group’s Jeep has launched a marketing campaign featuring bobbleheads to market the 2007 Jeep Compass crossover to it’s target market of the 22 to 30-year-old urban crowd. Jeep hopes to attract urban dwellers with the Compass, a move that differs from Jeep’s typical off-road target audience. There are 4 videos, called Monday, Gear, Bounce and Phil. Videos after the jump.

Click here to read the rest of Jeep Compass Bobblehead Ads

EON has been in talks with DaimlerChrysler and some of it’s unit companies for a distributorship here in Malaysia. The talks are centered on distributing cars with engine capacities of more than 2 liters. DaimlerChrysler currently has the following marques under their umbrella: Mercedes Benz, Maybach, smart, Chrysler, Dodge, and Jeep. They used to own a stake in Mitsubishi as well but disposed of it not too long ago.

DRB-HICOM who is leading the distributorship talks already assembles and distributes Mercedes cars here in Malaysia, and smart’s engine capacities are below 2 liters. That leaves Chrysler, Dodge, and Jeep. Perhaps we might be able to see a 2.4 liter Dodge Stratus or new Jeeps being officially brought in. The new Jeep Compass looks good. Or this could be a new Mercedes distributorship.

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