Bailout Blues: Will Fiat ever deliver on its promise of new Chryslers?

By John LeBlanc With U.S. lawmakers taking Toyota to the wood shed this week, let’s take a look at another automaker with some, ahem, challenges: Fiat-run Chrysler. It’s been a quiet few months for the U.S. automaker. Virtually taking the year off with no new models for 2010, Chrysler has had little or no presence on the auto show circuit. In fact, the new product tap has been virtually tuned off since the 2009 Journey, Challenger and Ram. But last week, a puff of white smoke emanated from the Detroit automaker. Ralph Gilles, president and CEO of Dodge Car and senior vice president of Chrysler’s Product Design, presented a sketchy-looking teaser shot of a future, Fiat Punto-based Dodge subcompact hatch, above, during a Chicago auto show luncheon. Trouble is, according to Fiat’s published product plans, the new Dodge subcompact isn’t due until 2013, giving fresh competition like the Ford Fiesta, Chevrolet Aveo, VW Polo and Mazda2 (plus the established Yaris/Fit/Accent/Versa clan) a couple of years head start in the marketplace. Today, Chrysler has zero presence in the subcompact class. And although the Fiat 500 city car has been promised to be on sale in Canada by the end of this year, it’s a low-volume niche vehicle at best. So what until 2013? Fiat boss,, Sergio “The Don” Marchionne, has promised to “fix” the current bottom-feeder Chryslers, like the Dodge Caliber, Avenger and Chrysler Sebring, for the 2012 model year, and new versions of its big sedans and SUVs are on the way:

“The first half of 2010 is going to be more difficult than the second, simply because the product offering doesn’t start delivering until the second half. The first real viable, tangible evidence of this is going to be the Grand Cherokee in [quarter two], which is brand new. Then we’re going to see the Wrangler coming out with a significant update. I think there are 14 other interventions, most of which are significant enough to warrant almost a new product launch – that will come out in [quarter three] or [quarter four] this year.”

For 2010, The Don has said Chrysler must sell 1.65 million vehicles worldwide to put the automaker in a "slightly positive" profit position, profit needed to re-pay government loans as he has promised. That would mean about 1.1 million sales in the U.S. Trouble is, U.S. sales for January were down another 8 per cent compared with the same period last year; or about 685,000 annually. Not good. Let’s face it: Sketches are cheap compared to real, new product development. So until Fiat does something tangible—like a competitive family sedan and crossover platform—its hard to fathom just what Fiat’s intentions are with the Chrysler and Dodge brands. But with sales tracking at about half what is needed to stay alive, the numbers just don’t add up in The Don’s favour. Do you think Chrysler can stay in business long enough to see these teaser shots become reality? [Sources: Autobirdblog, The Chicago Sun Times, Edmund’s Auto Observer]

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