Chrysler's Resurgence: A Year of Product Blitz and Transformation

Strategic Insights -

A year ago, Chrysler faced significant doubts about its survival, but after stabilizing sales in the US, the company is now on a product blitz that has analysts predicting a turnaround. Chrysler's CEO, Sergio Marchionne, said the company is gaining traction with new products, having subsisted on older models after its government-financed bankruptcy in 2009. The company has introduced several new and revamped models, including a redesigned Jeep Grand Cherokee, which increased sales by 68 percent in 2010.

Key Takeaways:

  • Chrysler's US sales increased by 16 percent in 2010, marking the first year of growth since its bankruptcy.
  • The company's new product blitz includes a redesigned Jeep Grand Cherokee, which achieved a 68 percent sales increase in 2010, and a new version of its flagship sedan, the Chrysler 300.
  • Chrysler has partnered with Fiat to produce several new models, including the Fiat 500 microcar, which is set to arrive in the US later this year.
  • The company has repaid 80 percent of its loans to the US and Canadian governments, totaling $5.6 billion.
  • Sergio Marchionne, Chrysler's CEO, predicts the company will pay off the remaining $1.5 billion in loans by the end of 2011 and then pursue an initial public stock offering.
  • The Chrysler 300 is a critical building block in restoring the company's reputation, with a base price of around $30,000 and estimated fuel economy of 27 miles per gallon.
  • Industry analysts, including David Cole, chairman emeritus of the Center for Automotive Research, believe Chrysler is slowly proving it can come back.

Statistics:

  • Chrysler's US sales increased by 16 percent in 2010.
  • Sales of the redesigned Jeep Grand Cherokee increased by 68 percent in 2010.
  • The Jeep brand's sales improved by 25 percent in 2010.
  • Chrysler has repaid 80 percent of its loans to the US and Canadian governments, totaling $5.6 billion.
  • Sergio Marchionne predicts Chrysler will pay off the remaining $1.5 billion in loans by the end of 2011.
  • The Chrysler 300 has a base price of around $30,000 and estimated fuel economy of 27 miles per gallon.
  • Fiat's stake in Chrysler increased to 25 percent on Monday, with the potential for increased ownership to 35 percent by building a new small car in the US.

Sources:

  • "Chrysler Envisions Revival" by Bill Vlasic (January 31, 2011)
  • "Fiat to raise stake in Chrysler" by Reuters (January 31, 2011)
  • "Chrysler's 300: A Big Turning Point" by Bill Vlasic (January 31, 2011)
  • "Chrysler: A Year of Product Blitz and Transformation" by David Cole, chairman emeritus of the Center for Automotive Research (January 31, 2011)