I Ben Therbefor
Enthusiast
Dodge concepts must meet high-volume mandate in order to be produced
By DIANA T. KURYLKO
Automotive News
DETROIT - Dodge sees little chance of turning the M80 concept pickup into a production vehicle because of a new internal mandate that says all mainstream Dodges must deliver 100,000 sales annually. The concept truck drew rave reviews after it was introduced in bold "detonator yellow" skin at the Detroit auto show in January. Last month, Chrysler group executives said they were trying to make a business case that would put the M80 on a fast track to production. But Dodge says it is struggling to find a way to price the vehicle low enough to command 100,000 sales annually.
"We won't do a Dodge vehicle that can't get itself to sales of 8,000 to 10,000 (units) a month,'' said James Julow, vice president of Dodge Division. "We have 3,000 dealers. And if you want them all to stock it and to sell it, you can't fall much below that threshold and expect all those Dodge dealers to be in business." The attitude reflects the tighter scrutiny the Chrysler group is giving to new vehicles as it continues with its financial recovery. A 29 percent cut in Chrysler's vehicle development budget - from $42 billion in the past five years to $30 billion for 2002-2006- has forced the company to set higher standards for production vehicles.
The budget cut has been accompanied by an effort to clarify the role and positioning of the Dodge, Jeep and Chrysler brands.
"I'm not sure the outside world has picked up on the differences we have put into the brands in the last year and a half,'' Julow said. "It is amazing internally how this has clarified the role of Dodge. Dodge is a volume brand as defined by our global positioning of all brands within DaimlerChrysler. It is our mainstream and full-line brand. "The definition of niche is different for Dodge than the others. We are looking at 100,000 units a year."
Julow said an exception to the rule is the Dodge Viper, a $70,000, high-profit sports car. Dodge sold 1,388 Vipers last year. Specialty cars created by the Chrysler group's Performance Vehicle Operations unit also would be exempt. "Viper is the odd case, but you probably don't have more than 100 dealers in the country that do multiple Viper sales in a year," he said.
The M80's cost challenges center on the platform. The shortened Dakota platform that was used for the M80 is too expensive, Julow said. The platform's cost is critical because a vehicle such as the M80 would need a base price of $16,000 and must sell for about $20,000 fully loaded to be viable for Dodge, Julow said.
Potential sales volume has become a key factor in Dodge product decisions. The issue is more important to Dodge than it is to the pricier Chrysler Division or to the Jeep sport-utility unit, Julow said. In the past 18 months, Dodge has focused on becoming a true "full-range" volume make with vehicles people can afford, he said. That means there is no room for vehicles with annual sales of 40,000 units, Julow said. New Dodge vehicles that share a platform with sister divisions will have a more distinct appearance in an effort to distinguish the brands. Through new products, the Chrysler group also hopes to boost Dodge more quickly than Jeep or the Chrysler Division, to annual sales of about 2 million units by the end of the decade, Julow said. Last year, Dodge sold 1.26 million vehicles in the United States.
Dodge hasn't tested the M80 in consumer clinics. But Julow and other Chrysler group executives say it has drawn positive responses at the Detroit auto show and other shows since.
The Chrysler Crossfire met similar responses at last year's shows. Those reactions were a major reason the sporty coupe was approved quickly for production. The M80 could open up a new segment for Dodge. But unlike the Crossfire, which even in concept stage heavily used existing components and platforms, the M80 would require "a clean sheet of paper," Julow said.
The M80 concept sits on a modified Dakota platform. "But you have to ask whether that is a credible platform for our target buyers," said Julow. That target is young buyers who will turn 20 this decade. Dodge wants to lure them with vehicles that start at about $15,000 to $16,000. "I'm not sure that the M80 is looking to have as heavy and as costly a platform to launch off of as a Dakota," Julow said. "I'm not saying we're not working our hind ends off in the back of the building trying to find a platform. We are trying to make a commercial case, and at the lower end of the market it's harder to do."
Julow said the problem isn't different from that faced by the Chrysler PT Cruiser, which went on sale two years ago. "PT Cruiser launching at $30,000 would have been a dud," he said. "PT Cruiser at $16,000 is a phenomenon. What you have to do is find a solution to sell it (M80) viably for $16,000 to $20,000 from low to high end and still makes some money to pay off the investment. That's a harder assignment than for us than for a luxury or near-luxury coupe for Chrysler."
A similar fate met the Dodge Razor, a two-seater bare-bones sports car that also was unveiled in January at the Detroit show. Chrysler group executives had said making the Razor a production vehicle would be even more difficult than the M80 because the concept didn't use an existing platform or many parts from production vehicles. Said Julow: "The Razor falls into the same bucket of where the price of making it commercially viable to the customer forces a very efficient solution from us. And that is just not as easily done, which makes the assignment harder."
By DIANA T. KURYLKO
Automotive News
DETROIT - Dodge sees little chance of turning the M80 concept pickup into a production vehicle because of a new internal mandate that says all mainstream Dodges must deliver 100,000 sales annually. The concept truck drew rave reviews after it was introduced in bold "detonator yellow" skin at the Detroit auto show in January. Last month, Chrysler group executives said they were trying to make a business case that would put the M80 on a fast track to production. But Dodge says it is struggling to find a way to price the vehicle low enough to command 100,000 sales annually.
"We won't do a Dodge vehicle that can't get itself to sales of 8,000 to 10,000 (units) a month,'' said James Julow, vice president of Dodge Division. "We have 3,000 dealers. And if you want them all to stock it and to sell it, you can't fall much below that threshold and expect all those Dodge dealers to be in business." The attitude reflects the tighter scrutiny the Chrysler group is giving to new vehicles as it continues with its financial recovery. A 29 percent cut in Chrysler's vehicle development budget - from $42 billion in the past five years to $30 billion for 2002-2006- has forced the company to set higher standards for production vehicles.
The budget cut has been accompanied by an effort to clarify the role and positioning of the Dodge, Jeep and Chrysler brands.
"I'm not sure the outside world has picked up on the differences we have put into the brands in the last year and a half,'' Julow said. "It is amazing internally how this has clarified the role of Dodge. Dodge is a volume brand as defined by our global positioning of all brands within DaimlerChrysler. It is our mainstream and full-line brand. "The definition of niche is different for Dodge than the others. We are looking at 100,000 units a year."
Julow said an exception to the rule is the Dodge Viper, a $70,000, high-profit sports car. Dodge sold 1,388 Vipers last year. Specialty cars created by the Chrysler group's Performance Vehicle Operations unit also would be exempt. "Viper is the odd case, but you probably don't have more than 100 dealers in the country that do multiple Viper sales in a year," he said.
The M80's cost challenges center on the platform. The shortened Dakota platform that was used for the M80 is too expensive, Julow said. The platform's cost is critical because a vehicle such as the M80 would need a base price of $16,000 and must sell for about $20,000 fully loaded to be viable for Dodge, Julow said.
Potential sales volume has become a key factor in Dodge product decisions. The issue is more important to Dodge than it is to the pricier Chrysler Division or to the Jeep sport-utility unit, Julow said. In the past 18 months, Dodge has focused on becoming a true "full-range" volume make with vehicles people can afford, he said. That means there is no room for vehicles with annual sales of 40,000 units, Julow said. New Dodge vehicles that share a platform with sister divisions will have a more distinct appearance in an effort to distinguish the brands. Through new products, the Chrysler group also hopes to boost Dodge more quickly than Jeep or the Chrysler Division, to annual sales of about 2 million units by the end of the decade, Julow said. Last year, Dodge sold 1.26 million vehicles in the United States.
Dodge hasn't tested the M80 in consumer clinics. But Julow and other Chrysler group executives say it has drawn positive responses at the Detroit auto show and other shows since.
The Chrysler Crossfire met similar responses at last year's shows. Those reactions were a major reason the sporty coupe was approved quickly for production. The M80 could open up a new segment for Dodge. But unlike the Crossfire, which even in concept stage heavily used existing components and platforms, the M80 would require "a clean sheet of paper," Julow said.
The M80 concept sits on a modified Dakota platform. "But you have to ask whether that is a credible platform for our target buyers," said Julow. That target is young buyers who will turn 20 this decade. Dodge wants to lure them with vehicles that start at about $15,000 to $16,000. "I'm not sure that the M80 is looking to have as heavy and as costly a platform to launch off of as a Dakota," Julow said. "I'm not saying we're not working our hind ends off in the back of the building trying to find a platform. We are trying to make a commercial case, and at the lower end of the market it's harder to do."
Julow said the problem isn't different from that faced by the Chrysler PT Cruiser, which went on sale two years ago. "PT Cruiser launching at $30,000 would have been a dud," he said. "PT Cruiser at $16,000 is a phenomenon. What you have to do is find a solution to sell it (M80) viably for $16,000 to $20,000 from low to high end and still makes some money to pay off the investment. That's a harder assignment than for us than for a luxury or near-luxury coupe for Chrysler."
A similar fate met the Dodge Razor, a two-seater bare-bones sports car that also was unveiled in January at the Detroit show. Chrysler group executives had said making the Razor a production vehicle would be even more difficult than the M80 because the concept didn't use an existing platform or many parts from production vehicles. Said Julow: "The Razor falls into the same bucket of where the price of making it commercially viable to the customer forces a very efficient solution from us. And that is just not as easily done, which makes the assignment harder."
