Chrysler: 'The best little car company in America'
While sales will decline in the U.S., the automaker says it wants to think locally, but act globally.
NEW YORK (CNNMoney.com) -- Chrysler wants to be "the best little car company in America," the automaker's president recently said. But in order to do that, it's setting its sights beyond the United States.
"Our big opportunity for growth is outside the U.S.," with international markets eventually making up half of sales, James Press told a group of reporters.
Chrysler will never approach the sales volumes of market leaders like General Motors and Toyota, Press said. They each already sell more than three times as many cars worldwide as Chrysler hopes to sell.
The goal is global volume of about 3 million cars, which is slightly ahead of its current sales volume. But Chrysler will have to do that in the face of severely shrinking U.S. sales and a weak international presence. Last year, it sold only about 238,000 cars outside of North America, according to the company.
A lynchpin of its strategy is world-car designs: Identical vehicles that can be sold both in the U.S. and overseas.
That differs from the global product strategy of GM and Ford, which usually design American cars for the domestic market but different cars for overseas countries while sharing unseen components to save costs.
In contrast, Dodge and Chrysler cars will be designed to appeal to those who want something different and identifiably American, no matter where in the world they may be, said Press.
The new Dodge Journey crossover SUV is a perfect example. The Journey was unveiled in Europe before being shown in America. In Europe, it comes with a range of engines and transmissions, including a diesel engine, designed to appeal to that market. It can also be built easily in either right-hand or left-hand drive. But the point is that it's all the same car.
Chrysler's outlook for big international sales boost is optimistic, said Jim Hossack of automotive marketing consultants AutoPacific. "I think it's going to be tough to make up overseas with what they're likely to lose at home," he said.
And doing it without offering products uniquely tailored to various markets will be even tougher. "Often, it's more difficult than it seems to have a world car," said Hossack.
Companies that succeed tend to be luxury car brands that can command high prices to offset high costs, he said. Differing safety and emissions regulations and peculiar customer expectations add expense.
Even the roads are against you when trying to sell one car worldwide, said Charlie Vogelheim, vice president of J.D. Power and Associates. In European cities, streets are often narrow and twisting, calling for smaller, narrower vehicles.
There is an aspect of Chrysler's "one small company takes on the big world" strategy that seems very wise, said Hossack, and that's Chrysler's plan to put a very American face on its products, no matter where they're sold. Its Jeep brand is already as iconically American as Mickey Mouse and nearly as well loved.
Chrysler has also carved out a niche in the U.S. for brash "in your face" designs with cars like the big and glitzy Chrysler 300 and the small and scrappy-looking Dodge Caliber, both of which sell well overseas because they stand out.
"The French people already have plenty of French cars to buy," Hossack said.
Charlie Vogelheim, vice president of J.D. Power and Associates, recalled how, on a recent drive through France, he found himself surrounded on three sides by two Chryslers and a Jeep.
But some industry watchers wonder how far Chrysler can get by trading on its American origins. James Bell, publisher of the automotive Web site IntelliChoice.com, sees inherent dangers. "If you take an American car into the rest of the world, there's a natural reluctance," he said.
The United States does not have a long-standing reputation, internationally, as a source of high-quality, desirable cars, Bell said. And these days, it's a country that many overseas would rather berate than embrace.
To have any hope of succeeding, Bell said, Chrysler must improve the quality of its vehicles, as GM and Ford have done. If not, the automaker's current crop will only serve to reinforce an already ugly stereotype of American vehicles -- that they stink.
Consumer Reports recently announced the percentage of Chrysler, Dodge and Jeep vehicles it recommends had dropped to just 14 percent this year from an already-low 21 percent last year.
"That represents a picture of the past," Chrysler president Press told reporters recently, promising that quality was already improving.
It will need to, said Bell. Speaking of the Dodge Journey, Bell said, "If its going to be success in a world arena it has to be a stellar vehicle."