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Analysis: Chrysler's plans are ambitious
Saturday, November 07, 2009

The $23 billion, five-year recovery plan for Chrysler Group LLC unveiled Wednesday was nothing if not ambitious, with big increases in market shares and sales forecast for each of its brands by 2014.

But the company's ability to reach those goals, which includes selling 2.8 million vehicles globally by 2014, may be hampered by consumers concerned about the company's quality control.

The six-hour presentation, headed by Chrysler CEO Sergo Marchionne, calls for unveiling four new Dodge models by 2013 and updating most of its current lineup. Jeep gets an new Grand Cherokee plus a new small Jeep next year and two other models in 2013. Chrysler gets a new 300 next year and in 2013 a replacement for its unpopular Sebring, a new crossover and a new compact car.

"It's a tall order, but I was very impressed that they talked about their quality issues head-on," said Jack Nerad, editorial director of Kelley Blue Book.

The company is talking about "doing things like benchmarking what others are doing, for instance. They very rightly realize that ... it's not just about making sure that things don't break," Mr. Nerad said.

"There also has to be a perceived quality in the use of materials. ... They have to give their vehicles a perceived aura of quality."

Even if it improves the quality of its products, the sales and market share projections for Chrysler products may be overly optimistic. The company hopes to increase the market share from 1.8 percent this year to 3.4 percent in 2014.

Luxury brands from Japan and Europe dominate the field and Cadillac and Lincoln have been vastly improved, providing a tall order for Chrysler to be competitive as a luxury brand.

Still, Mr. Nerad said if anyone can help Chrysler to rebound, it's Mr. Marchionne.

"What generally impressed me is that they bet on the jockey rather than the horse, and Sergio Marchionne seems to be quite a jockey."

Don Hammonds can be reached at dhammonds@post-gazette.com or 412-263-1538.
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First published on November 7, 2009 at 12:00 am