As easy as ABC for Chrysler
Thinking small is the new big thing, writes NEIL McDONALD IF YOU LOOK AT OUR PORTFOLIO, WE HAVE NO SMALL CARS
WHEN Cerberus Capital Management group assumed control of Chrysler, analysts expected it would ‘‘strip it and flip it’’, according to Chrysler LLC Asia Pacific chief executive officer Phil Murtaugh. But that has not been the case, he says. ‘‘Many private-equity companies are accused of that,’’ he says.
But Cerberus, described as a hedge fund cum private equity firm, has exhibited a strong commitment to the brand’s future.
Murtaugh, a General Motors veteran in the US and China, says Chrysler’s priority is to develop a range of A, B and C cars — light, small and medium-segment cars — for the world.
‘‘If you look at our portfolio we have no small cars,’’ he says. ‘‘The Dodge Caliber is the only C-segment car and it’s a C-plus car.’’
Chrysler has entered a strategic co-operation program with Chinese carmaker Chery and intends to address those segments.
‘‘Specific platforms — that haven’t been announced— have been identified to form the basis of that co-operation and development of what’s called ‘top-hats’ off those platforms,’’ he says.
The Dodge Hornet was one opportunity talked about, but Murtaugh says it is still under investigation.
‘‘The highest priority in Chrysler is that 92 per cent of our business is in the US,’’ he says. ‘‘We have to get that business in order.
‘‘As we’re doing that, we have to make that 92 turn into 50, so you have to figure out how to be very successful in China. That’s our second priority.
‘‘The third priority is probably emerging markets in which we don’t operate today, and which have huge potential — India, Russia, Eastern Europe, Latin America.’’
Australia is also a strong focus for Mur- taugh, who says there is a great deal of scope for local growth.
‘‘We’re not contemplating local production in the intermediate future but this is a huge import market for us. It’s the most important import market in Asia. So this is a ‘maintain and grow’ sector,’’ he says.
‘‘If we can develop good B and C cars for Australia, you’ll see the potential for 20 per cent sales gains year on year for quite some time.’’
Chrysler Australia covers Chrysler, Jeep and Dodge. Last year it sold 10,885 vehicles, a 19 per cent lift on 2006. But a breakdown of each brand shows Chrysler’s 3059 sales last year was down 15.3 per cent on 2006.
Eastern promise: the Dodge Hornet is one possibility still being discussed for the Chinese market.