|
Daimler shows PT Cruiser
|
 |
April 21, 2000: 12:50 p.m. ET
Waits for delivery will be long for the combination small-car/minivan
By Staff Writer Chris Isidore
|
NEW YORK (CNNfn) - Most consumers will get their first look at the new PT Cruiser this weekend as DaimlerChrysler kicks off its marketing campaign with television, print and Internet advertising.
But that may be as close as most people get for some time to come, as demand for the distinctively styled, category-straddling small car/minivan is so great, waits of six to nine months for delivery may not be uncommon.
The company's biggest worry about the car right now is angering customers with long waits or by the possibility of dealers selling the car well above the list price, which the company has kept below $20,000.
|
 | VIDEO |
Watch two PT Cruiser commercials debuting this week.
|
| Commercial 1... |
| Real |
28K |
80K |
| Windows Media |
28K |
80K |
| Commercial 2... |
| Real |
28K |
80K |
| Windows Media |
28K |
80K |
|
"I'm scared to death of this launch because we have so much traffic on it now that I don't want to bring so many people in on just that product alone that we can't deliver," said Theodor Cunningham, executive vice president of global sales and marketing.
The television spots try to build some awareness of both the car's distinctive styling and of its great utility. One shows a little girl in a stroller correctly identifying a bike, a bus and a plane, but then pointing at a PT Cruiser and asking "What the?" Another shows a man cleaning a cluttered garage by loading all of its content into a PT Cruiser before pulling it into an empty garage.
The company is making an unprecedented push in Internet advertising for a new vehicle launch as well. The car will also be on display at the New York auto show that opens Saturday.
Despite the attention that car has gotten at auto shows and in the automotive and general media in the last two years, the campaign is needed, said Bud Liebler, senior vice president of marketing for DaimlerChrysler.
"There are 280 million Americans out there. We haven't reached them all yet," said Liebler.
Liebler and Cunningham say while they're concerned about customers facing long waits for the cars, they're less worried about gouging by dealers. The company is doing everything it can to encourage dealers not to charge above list price, said Cunningham.
 "What you hear about gouging, I'm confident it's maybe 1 percent of dealers," said Liebler. "I think dealers understand this is a once in a lifetime opportunity to make new inroads, to win friends and influence people. Doing them bad going in might help short-term profits, but it will only hurt you in the long run."
Wall Street, which has been disappointed with DaimlerChrysler earnings since its 1998 merger, is looking forward to the car giving the German-U.S. automaker a needed shot in the arm. The styling, which harkens back to the gangster get-away cars of the 1930s, is one of the main drivers of the hype.
"The problem with a lot of cars introduced is achieving differentiation. Most new vehicles rather quickly have to have price concessions," said Rod Lache, analyst with Deutsche Banc Alex. Brown. "This thing is very unique."
DaimlerChrysler plans to sell about 120,000 of the cars this year, and by next year will be selling the full production of 180,000 out of its Mexican plant that is building the vehicle. It moved up plans for production in Europe, but that Swiss plant won't begin building its own 50,000 Cruisers for a year.
Profits limited by low price
But because DaimlerChrysler is going after the small-car buyer with the product, it is keeping the price low enough that it probably won't produce as much gross profit as more expensive sport/utility vehicles or pickup trucks, said David Cole, director of the office for the study of automotive transportation at the University of Michigan.
Still this is seen as an important vehicle for DaimlerChrysler, maybe the most important since the introduction of the minivan in 1983 helped pull it out of its economic problems.
"It is defining a new segment, and it'll do it big time," said Cole. "It's not a low volume segment. It could be as big as minivans. My belief is it'll reshape our whole idea of how we think about a small car."
Hybrid vehicles key to industry's future
The other thing the PT Cruiser does is to bring greater attention to the idea of "hybrid" vehicles that straddle the line between categories. While there have been other vehicles that straddled the line between categories, none have generated the hype of demand of the PT Cruiser.
The hybrids are important because by using what is basically the platform for the compact Neon for the PT Cruiser, it allows DaimlerChrysler to save development costs and shift capacity.
"It's an exaggeration to say they took Neon guts and built a truck over it, but took a lot of things in that platform and modified it," said Lache.
The move to more hybrids and fewer vehicle platforms is an important trend in the industry to lower costs and adjust capacity to the demands of the market much more quickly.
Competition is close behind
That need to respond more quickly to the market means that the PT Cruiser won't have the new category for itself for long, according to both observers of and officials from the industry. Time to go from design to production has been cut drastically from the early 1980s, when Chrysler had the minivan to itself for most of the decade as others scrambled to respond.
"People will be coming at us quickly," said Cunningham. "So it's going to be up to us to look at derivatives of this product quick, and continue to maintain our lead." 
-- Click here to send email to Chris Isidore
|
|
|
|
|
|
DaimlerChrysler
|
Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney
|
|
|
|
 |
|
