Why Chrysler is Smiling Again
The hot-selling 300 has reversed the fortunes of the once-troubled automaker. The secret? Bold design—and managers who knew when to get out of the way.
(Business 2.0) – If you've been watching Rap City late nights on BET, or following the buttoned-down business press, you already know that Chrysler's new 300 is a hit with the hip-hop set. 50 Cent featured the car in a recent music video. Snoop Dogg promised to go to bat for Chrysler Group CEO Dieter Zetsche in exchange for a free ride: "If you want this car to blow," Snoop told the German executive in a voice-mail message, "give it to me."
Snoop was right; for the first time in years, Chrysler is getting serious blow—and not just from rappers in baggy pants. White guys with comb-overs are also flocking to the stately rear-wheel-drive sedan, which starts at a decidedly nonluxury price of $23,920. "Young people, old people, men, women—the car sells itself," says Eugene Gibbs, a Chrysler dealer in Los Angeles. "One couple today traded in their Jaguar for one."
In just over five months, Chrysler has sold more than 60,000 300s, with hundreds of customers still on waiting lists nationwide. AutoWeek magazine named the 300 "America's best sedan" of 2004, wresting the title from—achtung, baby!—BMW's celebrated 3 Series. Thanks in part to this enthusiastic buzz, the automaker—which last year lost $1.1 billion in a single quarter—earned $628 million in the quarter that ended in June. Led by the 300, sales of Chrysler-brand cars in August were up 43 percent from a year earlier, making the company the only U.S. automaker to increase its domestic market share this year. The passion for Chrysler is back. Fo' shizzle.
How did Chrysler spark gotta-have-it lust that reaches from the nightclub to the country club? The 300 is well equipped and reasonably priced, and it's been shrewdly marketed. But the car also offers something even more precious: genuine excitement. That's the real reason the 300 is so important—it's brought new luster to the Chrysler brand and set the stage for a slew of vehicle introductions that will follow in months and years ahead.
Chrysler spent four years developing the 300, investing hundreds of millions in R&D, production, and engineering along the way. Yet despite the huge risks, staggering costs, and myriad committees that participated in the effort, the car that emerged from the development process is a product of great design and aesthetic inspiration. Its significance extends even beyond the auto industry: The success of the 300 offers a lesson in how to navigate the tricky terrain where art mingles with commerce—or, to put it bluntly, how to design cool stuff that customers actually want to buy.
Creating a New Heritage
Freeman Thomas is a spectacled 47-year-old automobile designer who resembles your favorite German philosophy professor. Regarded as one of the industry's true visionaries, Thomas made his name in Europe dreaming up successful models for Porsche and Audi. Working alongside designer J. Mays, he also had a hand in the creation of Volkswagen's New Beetle—a car that instantly revitalized that German company's brand. Mays went off to become Ford's head of design in 1997. Chrysler snapped up Thomas in 1999, luring him to become vice president for advanced design strategy. He also got a clear mandate: Unify the visual identity of Chrysler's cars.
Thomas began by drawing on Chrysler's 80-year heritage, developing a series of historically themed design cues that he sprinkled liberally throughout the product lineup. It's an aesthetic he recently described as "Eastern, elegant, deco—with the Chrysler Building as inspiration."
The proud grille and classic contours of Chrysler's PT Cruiser, introduced in 2001, heralded the transformation. Similar design cues made their way to other new models, like the 2001 Sebring midsize car, the 2004 Pacifica minivan, and the 2004 Crossfire sports coupe. "When you see one of these cars in your rearview mirror, you know it's a Chrysler," says Bryon Fitzpatrick, chairman of industrial design at Detroit's College for Creative Studies.
The 300 was to be the culmination of this approach. Built on a traditional rear-wheel-drive platform—as opposed to the front-wheel-drive configuration used exclusively in Chrysler sedans since 1985—the 300 was intended to lure an SUV-loving American public back into passenger cars. "We needed to create a car that told the world, 'Hey, look at me,' but without breaking the bank," says Joe Dehner, Chrysler's interior and exterior design chief.
Fostering that creativity required Chrysler's bosses and bean counters to do something that rubs against every executive's deepest instincts: Back off. "Management has to trust the design team," says Tom Matano, a former chief designer at Mazda who now directs the industrial design program at San Francisco's Academy of Art University. Matano likens this relationship to the Renaissance practice of patronage, when the church and nobility sponsored, and spurred, great art. "Something very similar now happens in the corporate world," Matano says.
That kind of trust can be difficult to maintain in the best of times, of course. But the fact that it took root at Chrysler is even more remarkable, given the tumultuous history of the 1998 Daimler and Chrysler merger. Though the partnership was publicly pitched as a "marriage of equals," it soon became clear that the German half would dominate. A joke that made the rounds in Detroit summed up the conventional wisdom: "How do you pronounce DaimlerChrysler? Daimler—the Chrysler is silent."
Yet even as kinks were being worked out in the executive suite, the Germans gave Chrysler's designers plenty of creative freedom. Members of the company's 25-person design team were encouraged to assert their aesthetic opinions as senior managers strolled through the hallways of the design studio. "It's a no-fear environment," Dehner says.
Daimler's brass also offered practical support. The 300 had been on the drawing board before the merger, but the project had stalled; Chrysler insiders were worried that the car's rear-wheel-drive platform would be a dud in the Midwest and Northeast, where drivers assume that front-wheel-drive vehicles do a better job of plowing through winter weather. DaimlerChrysler's German executives shrugged off the risk. Mercedes's rear-wheel-drive cars generate few complaints in snowy Europe, they reasoned, so the rear-drive 300 was quickly green-lighted.
The 300 also benefited from Daimler's expertise in precision engineering. Roughly 20 percent of the parts that go into the 300 are derived from Mercedes-Benz components, including the car's traction control, automatic transmission, and electronic stability systems. The German influence also shows up in Chrysler's increasing dedication to style and craftsmanship. "We owe a lot of that to our business partners across the pond," Dehner says.
Consumer quality watchdog J.D. Power & Associates echoes this sentiment. While Chrysler's quality ratings still lag behind those of its Japanese and European rivals, the company has recently made significant headway. "Chrysler is getting much better," says J.D. Power partner Joe Ivers.
Why Style Sells
Independent of such right-brain considerations, however, design is clearly the 300's most prominent selling point. The secret lies in the way Chrysler's designers tweaked the proportions: the long hood, the short trunk lid, the way the stocky fenders are accentuated by the squinty cockpit glass. Similar themes prevail in the aggressive front end, which features a Cheshire Cat grille flanked by sculpted headlights. The net result is a fresh design that radiates traditional power and status.
The 300's smaller details also convey a high-end feel. The tortoiseshell accents on the steering wheel, shifter knob, and door panels, for example, were inspired by the sunglasses favored by Hollywood stars. Also, the leather-clad seats are raised 2.5 inches from the floor to help SUV-conditioned drivers feel like they command the road.
Then there's the optional 340-horsepower Hemi V-8. Named after the engines that powered Chrysler's high-performance cars of the 1950s and '60s, the Hemi has become another signature element of the company's brand. Though it's installed only in more expensive versions of the 300, 40 percent of the car's buyers drive home with a Hemi under the hood.
Add it all up and the 300 deftly links European refinement with America's muscle-car past. "It's a statement vehicle that says American sedans are OK to drive again," Matano says.
The design is already rubbing off on other models. The new Dodge Magnum wagon, built on the same rear-wheel-drive platform as the 300, shares the bad-ass grille, big wheels, and Hemi power of its Chrysler sibling. The 2006 Dodge Charger will also use the 300 platform, although it will be styled to look like the car's redneck cousin. Meanwhile, Chrysler's competitors are launching similarly priced passenger sedans that will hit auto showrooms next year, including the Buick LaCrosse sedan, Pontiac's G6, Ford's Five Hundred, and Mercury's Montego.
Distinctiveness will be a key selling point. "All cars are now safe, and all offer a good ride," argues Karl Brauer, editor-in-chief of auto research firm Edmunds.com. "Design is the only thing automakers can use to separate themselves from the pack."
"Chrysler has decided it wants to turn heads," adds Robert Hinchliffe, auto analyst at UBS Investment Bank. "The halo from the 300 could rub off positively on the company's entire line of cars."
Word up: When you're getting props from Compton to Wall Street, you know you've done something right.