Projo Cars Blog

Chrysler continues to flail in a market where it seems ill positioned, with its latest move designed to move its new hybrid SUVs off the lot.

But hybrid SUV was always a contradiction in terms – a case of wanting your cake (updating the outmoded SUV with green technology) and eating it too (big SUV-style profits) – that has now fallen flat in an age of high gas prices.

SUVs on the whole do not appeal to environmentally conscious consumers and the savings – going from around 15 combined miles to the gallon to around 20 mpg – are not necessary going to appeal to consumers seeking to save money at the pump.

This is the latest move from privately owned Chrysler which is lumbered with a lineup that include few small cars – the Chrysler PT Cruiser/Convertible and Dodge Caliber – and a bunch of big, aggressive vehicles seemingly from another universe - including the Chrysler 300 and Pacifica and Dodge Challenger, Charger and Magnum, let alone its SUVs and trucks.

Indeed, Chrysler has seen sales drop off nearly 20 percent so far this year compared with the first five months of 2007, including a drop of nearly 25 percent in May.

As a result, it has made a number of moves that seem to reflect a “We’ll pay you to drive them away” mentality.

They include the grand offer of guaranteeing $2.99 a gallon gasoline for 12,000 miles a year over three years for each new vehicle, and a decision to follow General Motors and sell certified used Chrysler, Dodge and Jeep vehicles on eBay.

Last week, chairman and CEO Robert Nardelli had a Jimmy Carter moment of crisis in the face of bad reviews from both Consumer Reports and J.D. Power & Associates, sending off an email to all employees asking them why they thought no one wants to buy the company’s products.

His recommendations included such corporate/marketing mumbo jumbo examples of the something obvious as: “Don’t hesitate to confront problems;” “Everything is about pleasing the customer” and “Raise the standard defining excellent quality.”

Excellent quality indeed!

Now the company has announced it will undercut General Motors in the pricing of its 2009 hybrid SUVs – the Chrysler Aspen and Dodge Durango. Both will be priced at around $45,000 which is about $8,000 less than GM’s 2008 hybrid SUVs – the Chevrolet Tahoe and the GMC Yukon.

But with consumers falling over themselves to buy small, fuel-efficient cars, it remains to be seen whether the SUV hybrid schtick will carry in a world of high gas prices.

- Peter C.T. Elsworth

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