Chrysler Group LLC unveiled a five-year plan yesterday that called for revamping the Dodge brand, a newly created Ram brand for its truck line, and a raft of new technology and cost savings from FiatSpA, the Italian carmaker that now owns 35 percent of the Auburn Hills, Mich.-based company.
Chrysler CEO Sergio Marchionne said the company has $5.7 billion in cash and added $1.7 billion since it left bankruptcy June 10. The third-largest U.S. automaker was profitable on an operating basis in September because of cost controls, Mr. Marchionne told analysts and journalists at the presentation.
"Chrysler's financial status must be at least partly attributed to the one-time windfall generated by dealers who have been rebuilding their inventory after the shortages experienced in the late summer," Edmunds.com CEO Jeremy Anwyl said. "But, the company also deserves credit for being laser-focused on cost-cutting.
"Marchionne certainly knows how to deliver a message in a credible way. The difficult part is not in putting together a compelling presentation, but rather to implement a solid plan."
"The figures disclosed are better than expectations," said Massimo Vecchio, an auto analyst with Mediobanca SpA who attended the presentation.
"The new Chrysler is being parsimonious -- cheap," Mr. Marchionne said, referring to efforts to reduce costs.
Meanwhile, Chairman C. Robert Kidder said the company intends to go public and repay its loans "with all deliberate speed."
Still Chrysler may struggle until the new products developed with Fiat are ready for sale. Chrysler said it will have 21 new models co-developed with Fiat by 2014.
Another key to Chrysler's revival is tackling quality problems and Doug Betts, senior vice president of quality, said the company has begun to address those issues already.
Chrysler was the only domestic car company that did not have a single recommended product in a recent Consumer Reports survey, which labeled the entire lineup as being far below average.
The plan revealed yesterday includes four new Dodges that will be introduced by 2013, plus updates on most of its current lineup. Dodge will lose a number of its current models over the next year or two.
Fred Diaz, head of the new Ram truck brand and Chrysler's sales chief, said the newly created division's goal will be to increase truck sales over the next few years from today's 280,000 to 415,000.
Jeep, arguably Chrysler's most iconic brand, will depend on the Wrangler to anchor the brand, Jeep CEO Mike Manley said.
Jeep was the No. 1 SUV brand in the world through the 1990s. Today it is sixth in the world and third in North America.
"Jeep needs to return to its historic position," Mr. Manley said.
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