Bad credit hurting sales more than fuel prices

The auto industry is in a bad sales slump, and while trucks and SUVs are being hurt particularly by fuel prices, the rest of the market has an even bigger problem. The tight credit market is making it much harder for dealers to sell you transportation, and the problem isn't relegated to just those with poor credit. Banks want higher cash-to-debt ratios, larger down payments, and then they're still charging higher interest rates on top of all that. GM's Mark LaNeve estimates his company is losing between 10,000 and 12,000 sales per month due to the credit crunch, which is close to a full point of market share.

Chrysler dealers are likely struggling even more, as the Pentastar recently removed company-financed leasing as a fall back option for those who cannot afford to buy. Chrysler's sales have been down 34% this year through August, and leasing went from 23.5% of the business to just 2%. With the latest rash of bad news hitting the banking industry in the U.S., we don't expect this trend to reverse itself any time soon.

Dodge Challenger Concept designer leaves Chrysler

Big name designers often skip from one job to another in the automotive world. Chrysler seems to be losing more than its fair share of artistic types, as the Auburn Hills-based automaker has lost two top designers in recent weeks. First, long time design chief Trevor Creed retired. Now Dodge Challenger Concept designer Micheal Castiglione has left for a smaller, more diversified design house. Castiglione has joined Ken Okuyama Design as their chief designer where he will work on everything from eye glasses and furniture to trains and planes. Okuyama also has some automotive interests, including the K.O 7 open wheel and the interesting-looking K.O 8 coupe (above). During his 15-year tenure with the Pentastar, Castiglione's best work came in the form of the Dodge Challenger Concept, but he also worked on the Jeep Compass concept and the Chrysler 300 production car.

[Source: Car Design News]

Chrysler offering even more incentives to close out July

The automotive sales sector is in a major state of flux as consumers continue to run from SUVs and pickup trucks into smaller, more fuel efficient cars. One manufacturer hit especially hard by this transition is Chrysler, a company that recently posted the worst fleet average fuel economy numbers of all major automakers in the U.S. due to its truck-heavy lineup. Still, the automaker has built up a large supply of Chrysler, Dodge and Jeep utility vehicles that they have got to get off dealer lots somehow. To ease consumers into the fuel-thirsy utes, Chrysler has introduced new incentives of zero-percent financing for 72 months on the 2008 Dodge Durango, Chrysler Aspen and Jeep Grand Cherokee and Commander.

While the lack of any financing charges will certainly impact the bottom line, it is nothing compared to the losses the automaker has been hit with over its past lease deals. In fact, truck and SUV residuals are so bad these days that Chrysler Financial has gone so far as to completely cut leasing out of its available portfolio starting August 1. The financing deals announced today are scheduled to continue through Thursday, July 31.

Daimler forces Chrysler to give up goods on $515M Q2 loss

Normally the privately owned Chrysler LLC is under no obligation to reveal its financial performance to Wall Street, but yesterday the Cerberus-owned automaker was forced to show a few pages from its accounting books thanks to one of its largest stakeholders and former owner, Daimler AG. The German automaker revealed that in the last six months, its 19.9% stake in Chrysler has cost it $585 million. To clarify Daimler's numbers, Chrysler also revealed yesterday that the loss being attributed to it, all of which was incurred in Daimler's first fiscal quarter of the year, is around 65 million euro, or $103 million, using American accounting standards. Perhaps realizing that all analysts had to do was multiply Daimler's loss by five to arrive at Chrysler's total loss for the last quarter, the automaker just came right out and said it lost about $515 million. While a mere pittance to the $8.7 billion worth of red ink Ford spilled during Q2, it was enough to drag down Daimler's numbers halfway around the world.

Chrysler electric vehicle still 3 to 5 years away

As company after company announces electric vehicle additions to their lineups by 2010, Chrysler is again expected to be a late arrival to the green-car party. The automaker started the semi-autonomous unit, ENVI, last year specifically to design and develop electric drivetrain vehicles like the Dodge Zeo concept pictured above but any belief they can put one of their creations on a showroom floor in a timely (read "competitive") fashion seems misguided. Company spokesperson, Nick Cappa, in a recent e-mail to the Detroit Free Press said they are currently developing electric vehicles and are "...planning on product within three to five years,". After the past disastrous quarter ,that saw sales plunging 22 per cent, there are many who aren't sure the company will even last that long. Bought up by Cerberus Capital Management last year, it has recently been busy fighting off bankruptcy rumors.

Nick Cappa, for one, still seems to be taking the long view. Defending the company's tortoise-like pace getting into the rapidly expanding hybrid market he says, "If you want to go ahead and make everything a full hybrid system, fine, but what if you can turn everything into a range-extended vehicle and take it beyond the 2020 campaign for 35 miles per gallon? The new technology ENVI is developing could do that." We hope, indeed, his confidence is well-placed and that they pick up the pace a notch or two.

Chrysler electric vehicle still 3 to 5 years away

As company after company announces electric vehicle additions to their lineups by 2010, Chrysler is again expected to be a late arrival to the green-car party. The automaker started the semi-autonomous unit, ENVI, last year specifically to design and develop electric drivetrain vehicles like the Dodge Zeo concept pictured above but any belief they can put one of their creations on a showroom floor in a timely (read "competitive") fashion seems misguided. Company spokesperson, Nick Cappa, in a recent e-mail to the Detroit Free Press said they are currently developing electric vehicles and are "...planning on product within three to five years,". After the past disastrous quarter ,that saw sales plunging 22 per cent, there are many who aren't sure the company will even last that long. Bought up by Cerberus Capital Management last year, it has recently been busy fighting off bankruptcy rumors.

Nick Cappa, for one, still seems to be taking the long view. Defending the company's tortoise-like pace getting into the rapidly expanding hybrid market he says, "If you want to go ahead and make everything a full hybrid system, fine, but what if you can turn everything into a range-extended vehicle and take it beyond the 2020 campaign for 35 miles per gallon? The new technology ENVI is developing could do that." We hope, indeed, his confidence is well-placed and that they pick up the pace a notch or two.

Chrysler to halt minivan production and cut truck shift at St. Louis

Chrysler announced today that it is indefinitely halting production at its St. Louis South minivan plant starting October 31. Also, beginning September 2nd, Chrysler will also cut production at its St. Louis North truck plant to one shift. Chrysler’s Tom LaSorda also said that it is not likely that the plants will repoen.

Chrysler raises prices by 2 percent on 2008 models

Chrysler has told its dealers that it will raise prices by 2 percent for most of the remaining 2008 models. The price increase, which will start today, will be carried over to the 2009 models. According to executives, the price increase comes from the rise in prices for commodities such as steel.

“The average 2 percent increase brings total model year price increases in line with key competitors,” said Chrysler spokesman Stuart Schorr. “It does not affect vehicles already in dealer inventory. Incentives would not be changed.”

Chrysler Cuda Convertible Concept

Maybe the 'Cuda is alive after all. While we have speculated about the existence of one ever since we first heard a hint of the SEMA show car from last year, all we've had to work with since are rumors and sketches of what might be. Well, today at the weekly Cars and Coffee show in Irvine, a genuine 'Cuda Concept was parked right in the midst of everything. A convertible nonetheless. It just sat there with only a few people really spotting it for what it was.

Chrysler CudaConsidering that real original '70s 'Cudas are plentiful at this show and that several Challenger SRT-8s have already made appearances, it doesn't seem surprising that people might not spot this concept immediately. The surprising part is that it is painted purple with a white convertible top that can't be ignored no matter how hard you try. While the car sported no badges, it wore a mock "NEWCUDA" Colorado plate and had a seemingly stock Challenger-like interior, complete with a Hurst pistol-grip shifter for the automatic trans. While many of the details emulate the 70-74 cars, the bulk says Challenger. Particularly fun is the grill and headlight setup and the Shaker hood scoop. Very nicely done. The only badge we spotted was a big G on the front fenders, the mark of Metalcrafter's Gaffoglio boys. Looks like we have a SEMA '08 preview on our hands.

Hole in One this weekend earns LPGA golfer one of first Aspen Hybrids

Last summer Ichiro Suzuki was selected as the MVP of the baseball All-Star game and got the keys to one of the first Chevy Tahoe Two-Mode Hybrids. At the time, those SUVs were still more than six months away from production. This year, Chrysler is getting ready to launch their own full-size hybrid SUVs and they may be awarding one of the early production Aspen Hybrids to a women golfer at the Ginn Tribute LPGA tournament this weekend. If any of the 144 golfers, including Annika Sorenstarn, shoot a hole-in-one during the tournament they will get one of the first Aspens.

The Aspen and its twin Dodge Durango hybrid don't go on sale until this fall but they are set up very much like the corresponding GM hybrids. The same two-mode hybrid transmission is paired up with a large V8, in Chrysler's case the 5.7L HEMI. The HEMI is also equipped with cylinder deactivation allowing it to run on either four or eight cylinders. The nickel metal hydride battery pack is installed below the second row seat. While GM is offering their hybrids with either rear or all wheel drive, Chrysler is only planning to offer the Aspen/Durango with the latter configuration. The Chrysler press release is after the jump.

Next Chrysler 300 gets evolutionary exterior, "huge leap" in interior

When the Chrysler 300 dropped on an unsuspecting public in 2004, it was all crisp edges and upright stance, with a bulldog face to help drive home the message of urgent thrust delivered by a reborn Hemi V8. Chrysler's got a refreshing in the pipeline for the 300, and that's giving designers fits. It's akin to sophomore album syndrome – when the original is a huge hit, how, exactly, do you follow it up? Chrysler designers are invoking the Porsche philosophy used to update its 911 through the generations as a roadmap for the 300's body changes, so don't expect anything too dramatic on the outside.

Inside, however, will be where the real action occurs. While not the worst interior Chrysler puts out, it's certainly got room for improvement. Cerberus chairman Steven Feinburg is reportedly passionate about improving the quality of Chrysler's offerings, and the lower quality materials we have today are being jettisoned in favor of more competitive finery. Whether that means competitive with what's out there right now, or as good as what everyone else will have by the time the new 300 hits the market, we don't know. Equipment levels, too, are an area where Chrysler wants to improve. Look for more technology and features that are better executed in the new 300, which the design staff has hopefully not managed to whack with an ugly stick in the name of "continued distinctiveness," or some other marketing double-speak for "we couldn't do better, so we did weird."

Chrysler must be happy to keep holding onto GEM

GEM vehicles certainly aren't flashy. They don't go more than 25 mph, they look kind of goofy, and they're stuffed with old-fashioned lead acid batteries. In fact, GEM vehicles embody the "golf cart aesthetic" more than any other NEVs that regularly make an appearance on our little blog here. Still, there's something worth noting about Global Electric Motorcars: it's the Chrysler brand/subsidiary that has growing sales. Automotive News (subs req'd) has a good story that takes a look at how Chrysler is benefiting due to keeping the GEM subsidiary following the Daimler-Chrysler split last year. GEM has sold 37,000 Neighborhood Electric Vehicles since getting started in 1998 and, while the company doesn't announce sales figures, the company is profitable. With Chrysler trying to gin up sales through gas price gimmicks, it's good to see that these zero-emission niche vehicles are going strong. The potential for Chrysler to move GEM from the NEV category into a company that builds vehicles that are capable of higher speeds exists, particularly through Chrysler's ENVI. A GEM Zeo, anyone?

Gas Gimmick from Chrysler

It remains to be seen whether Chrysler LLC's "Let's Refuel America" campaign will create an auto industry sensation like "Employee Prices for Everyone," or "Zero-Percent Financing," but the $2.99 per gallon promotion will certainly burn up the airwaves for a while, in an ad campaign, news reports and word-of-mouth.
Chrysler announced today that starting Wednesday through June 2, customers for most of their biggest-selling vehicles can opt for a credit card that locks in gasoline at $2.99 per gallon for three years. For vehicles with a customer incentive, which is to say pretty much all of them, customers can take the present incentive deal as-is, or accept a reduced incentive, plus the gas card.