Is Chrysler following the same fate of Lancia?

It is part of the group’s name and one of the most famous car brands in USA. But Chrysler is now facing one of its most difficult challenges: its survival. With only two models available and the lack of a clear plan about its future, many analysts wonder about its chances of surviving in an industry that continues to evolve.

For the Americans, Chrysler is as famous as Ford or Chevrolet. It’s been there for 93 years as the traditional mainstream American car that gained an important piece of the US car market. This is why it made part of several mergers with other car makers, which saw its big potential. It was the case of Mitsubishi and PSA in the 70’s, Daimler in the late 90’s and finally FCA in 2009.

Today Chrysler is one of the nine car brands controlled by FCA, and even if makes part along with Fiat of the name of the group, is one of the most vulnerable to the coming challenges. When it was acquired by Fiat SpA, there were 7 different models available, which included two SUVs, two sedans, two MPVs and one sport car. The financial crisis hit hard with the consequences on its sales at home: 177.000 units in 2009, or 430.000 units less than the total in 2006.

This big drop forced the brand to discontinue some low-selling models like the Crossfire and Aspen. In 2011, the offer was composed by the Voyager, Sebring, 200, 300 and PT Cruiser. The American car market started to grow again in 2011, and Chrysler wasn’t the exception, as its sales increased by 12% that year, and 39% in 2012, when compared to 2011. The best result was in 2015 when 325.000 units were sold, still far from the record in 2005 when Chrysler sold 649.000 vehicles in USA.

As the market was expanding again, Chrysler was going the other way round. FCA wasn’t able to provide Chrysler with the right products in order to make use of the increasing demand. In 2016 when the new Pacifica was introduced, Chrysler sold 232.000 units, down by 29%. One year later there were only 3 models available, which sold 189.000 units. The flop of the Chrysler 200 forced FCA to stop producing it, leaving Chrysler with only 2 models: the 300 sedan (initially introduced as the 300C in 2004), and the Pacifica.

There were no news about the brand in the Capital Markets day. Its US sales in H1 2018 fell by 13% to only 88.600 units, so the question is how feasible it is for FCA to revert this trend and give Chrysler the importance it deserves. As it happened to Lancia, and is happening to Fiat, the lack of SUVs is having a very negative effect on the health of Chrysler. No SUVs means no growth, and now growth means no profits, and no profits mean no future.

If nothing is done within the next year, Chrysler is likely to disappear, or in the best of the cases, it will become the autonomous-driving cars brand of the group with only one model available: the Pacifica. However, having an unique-model brand for a specific region (like Lancia with its Ypsilon and available in Italy only) is not profitable at all.

With limited resources to be distributed among Jeep, Ram and the premium brands, and no SUVs in the pipeline, the outlook doesn’t look good for Chrysler. Besides, US car market is set to stagnate during the coming years. My own prediction is that Chrysler will die within the next 5 years, following the case of Lancia. At the end only the strong will survive.

Source: FGW database, Automotive News, Bestsellingcarsblog.com, Carsitaly.net, KBA, SMMT, UNRAE, ANIACAM, CCFA, FENABRAVE, Autoblog Argentina, JATO Dynamics, Autoblog Uruguay, Motor.com.co, Goodcarbadcar.net