Shed Jeep And Then What?
Of the three Chrysler brands, Jeep is soldiering on as one of America’s strongest automotive nameplates. Heck, Jeep is one of the strongest brands of any kind in the world come to think of it.
With Chrysler LLC getting hammered so badly this year, some automotive analysts are calling for the company to sell Jeep. Realizing that Chrysler LLC is bleeding through cash at an alarming rate and with a much lower survival threshold to weather the current economic climate then Ford or General Motors, the drum beat to ditch Jeep is certain to grow louder.
Though I’ve never been a fan of the Jeep Compass or Patriot, two models which in my opinion have sullied the image of the brand, what remains is quite good. The Wrangler is a perennial favorite for everyone who wants a smaller off road vehicle, the Liberty is a capable compact SUV, and the Grand Cherokee is a decent midsized people move. Get rid of the ugly Commander and you have a line up worth considering.
This past February I stated that Chrysler will be sold within the year and I believe that this move will still take place. Cerberus is a buy ‘em and flip ‘em operation, with very little knowledge of the automotive industry. Overly dependent on the US market, Chrysler would be best suited to team up with Renault and Nissan, becoming the third leg of what would be an incredibly powerful automotive entity.
Selling Jeep apart from the rest of Chrysler LLC would only stem the tide for awhile before the incredibly shrinking automaker would be crying out for relief again. With Jeep, the company is much more appealing. Without it, Chrysler and Dodge dealers would simply be fodder for some Chinese or Indian automaker to gain access to the US market.
Of course, if gas prices suddenly plunge by more than one dollar per gallon over the coming month or two, then Chrysler LLC will buy itself some time before a decision about the automaker must be made. Not that people will return to big cars and SUVs en masse, but it could slow the bleeding long enough for other suitors to step forward.
Viral Marketing Success: Chrysler’s Let’s Refuel America Initiative
Automakers, like all major corporations, craft marketing campaigns designed to help drum up business. Many times these campaigns are developed in coordination with an ad agency to help find the “sweet spot” where customer interest is turned into actual sales.
Some campaigns are a bust, quickly scrapped and soon forgotten. Others, do their job and help bring in a steady stream of customers who might otherwise not show up at a particular brand’s new car showroom, giving sales people the opportunity to market their products.
Once in awhile a marketing campaign has an impact that not only brings in additional customers, but provokes the type of controversy that causes the campaign to go viral. By viral, I mean that the campaign mutates and spreads on its own with very little help from the company or the ad agency.
Let’s Refuel America
A prime example of viral marketing success is Chrysler’s current Let’s Refuel America campaign, an initiative started by Chrysler LLC to guarantee buyers that they would not have to pay more than $2.99 per gallon when filling up. Specifically, customers buying a new Dodge Ram truck would be guaranteed that their gas price would not hit $3 per gallon even if the pump price says $4, $6, or even $10 as some are predicting will happen.
Now Extended Through July 7th
Chrysler’s marketing scheme extends to most other Chrysler, Jeep, and Dodge brand vehicles, not just to the Dodge Ram, and the program was to end on June 2nd. However, Chrysler is reporting a 25% increase in web activity and a 34% increase in lead activity from the internet. With this news, Chrysler is extending the initiative through July 7th, in a bid to keep the momentum building.
Controversy Sparks Free News
Many of the automotive blogs have commented on the Chrysler initiative, with most articles stating that “Let’s Refuel America” is a bad idea. Actually, I’m being kind by not repeating some of the uglier comments as they can easily be found by looking around for yourself.
Personally, I wouldn’t advise a customer interested in buying a Jeep, Dodge, or Chrysler vehicle to join the program for one important reason: you lose the chance to take advantage of other incentives offered by Chrysler LLC including rebates which can add up to more than $5000 for certain vehicles. Yes, as gas prices fluctuate your costs will be capped, but if gas prices drop below $3 per gallon, then you lose the benefit of this program.
Running The Numbers
Chrysler’s does hold the line on gasoline for three full years with their program, an option that will appeal to people who want pump price stability. Personally, I believe gas prices will eventually drop as national demand for fuel continues to drop and prices begin to stabilize later this summer. Even if prices settle at around $3.25 per gallon, the 25 cents per gallon savings with a 26-gallon fuel tank would save you $6.50 per fill up.
Use Lots Of Gas, Save More
Moreover, if you drive a lot and fill up twice per week your savings would be $13 per week or $676 per year. Move that figure out for three years and your savings would be $2028. If gas was to settle at $3.50 per gallon then your savings would be $4056 for the same three year period. Not bad, but if you check Chrysler’s current incentives you could save more money by taking the rebate. Don’t forget, the 2009 Dodge Ram is all-new, therefore the incentives to push 2008 models out of the showroom will only get better.
From a marketing standpoint, the “Let’s Refuel America” campaign is a smart one, even if your depending on gas prices to stay high is a risky idea. For Chrysler, there is risk involved for themselves, especially if certain global conditions push prices to the top of the scale. Yet, the “controversy” generated from this campaign is likely to make Chrysler’s risk worthwhile — just don’t join in as I believe you’d do better by opting for their other deep incentives instead.
Chrysler Announces Major Realignment
Ever since Cerberus Capital Management took over Chrysler last year, the automaker was expected to perform a 
dramatic overhaul of its business model. The first step happened late last year, when Chrysler LLC announced that several models would be eliminated including the Chrysler PT Cruiser and Crossfire, the Dodge Magnum, and two other vehicles.
Yesterday, Cerberus announced that additional models would be cut across its three brands — Jeep, Dodge, and Chrysler — as the automaker stated that they were working toward having dealers sell all three brands under one roof.
Jim Press, Chrysler’s Vice Chairman and President, recently completed an eight city “New Day” road show with members of his executive team in a bid to meet with nearly 3,000 of its dealer partners. The main topic at those meetings was to discuss the company’s 2008 strategy while expressing their commitment to product, dealers and customers; driving dealer profitability; and building franchise value.
A new corporate initiative, Project Genesis, was also introduced with the goal to align the needs and wants of the customer with its product portfolio and the dealer network.
Industry analysts have been pointing out for years that the dealer networks for American’s three automotive manufacturers are a serious cash drain on each company. The new plan would allow fewer dealers to sell more cars, cutting brand overlap while driving up profits.
(Source: www.thefirehouse.biz)
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