California Autos Examiner

Sunday, September 07, 2008

Under the Pentastar

Here's the latest from Chrysler's "Under the Pentastar" series. The clip does its best to spin Chrysler's August sales results, talks about the company's efforts to phase out lead wheel weights and finally some racing business.

Given Chrysler's 34% drop in August, perhaps more drivers shopped until they dropped rather than driving off in a new Chrysler, Dodge or Jeep. Certainly the loss of leasing volume whacked the company in the knees, but it wasn't doing that much better in July when leasing was still in effect. Yes, many manufacturers are showing sales drops, but Chrysler has consistently posted very poor results. Some buyers might be worried about Chrysler's future, but I'd say that the majority simply aren't finding what they want on dealers' lots. That Nissan built small car can't get here soon enough, but one car isn't enough to save the day. I'd advocate that Chrysler pair with a manufacturer currently not represented in the U.S. market. One of my favorites would be France's PSA because it has some interesting products that, with some tweaking, could give Chrysler some very competitive entries.

What I don't want to happen to Chrysler is the "Mervyn's Effect" or ME for short. What is the ME you ask? Cerberus and some partners purchased the clothing and housewares retailer, with suspect intentions from the get-go in my opinion, and then proceeded to hack away the retailer's real estate holdings leaving the retailer crippled. Mervyn's has filed a lawsuit against its ex-owners alleging that they sold off its real estate holdings, jacked up its rent, prevented it from closing stores and forced it to pay a special dividend. Cerberus is already starting to hack away at the low hanging fruit at Chrysler but now might be training its eyes on juicier targets. The spin off of the Viper isn't such a big deal in my mind, but if the Jeep brand is ever spun off then it's game over.

No comments: