The Auto Writer

Chrysler needs fresh product like this Dodge Hornet. Even if they get something to the market, its competitors will likely be several steps ahead of them.

On Wednesday, Chrysler explained to the world how it plans to bring about its recovery, by rolling out new products, expanding market share and global reach, while promising to pay back all of the money that it has borrowed. I wasn’t in the audience to hear Fiat chief Sergio Marchionne speak, but I have looked over what was said by him and others, and can conclude that only luck will ensure Chrysler’s survival.

24 Months

Specifically, Chrysler faces enough challenges in-house without exterior pressures weighing in. It’ll be some 24 months (or longer) before new Fiat-derived Chrysler products hit the market and by then the automobile landscape will have changed dramatically, particularly in North America (United States and Canada) where 90% of Chrysler Group sales are made.

Let’s take a look at some challenges facing a Chrysler recovery from some of its competitors:

Hyundai/Kia Juggernaut – Though run separately, Hyundai owns 38% of Kia thus their success and failures are tied together. Unfortunately for Chrysler, failure hasn’t been uttered by the Korean makes for some time as each new product introduction is a vast improvement over what was offered previously. Kia Soul. Hyundai Genesis. Kia Forte. Hyundai Sonata. Kia Borrego. The list goes on and H/K continues to gobble up market share. Yes, a new Kia plant in Georgia will factor in too.

Ford – You’ve heard this before: only one US automaker hasn’t taken government money and that automaker is Ford. Despite not being the recipient of taxpayer funds, Ford has found a way to become profitable, expand market share, and compete with the best of the players out there. Ford has fixed its own quality problems while Chrysler has not. If someone wants to buy a traditional American brand, then they’ll go with Ford regardless of whether the vehicle is built in Mexico, Turkey, Canada or the United States.

Volkswagen – VW has its designs on becoming the world’s largest automaker and they’ll push that effort by opening up an assembly plant in Chattanooga in 2011. Oh, by the way, that plant will come online before Chrysler can get its new products to the market, producing 150,000 midsize sedans with the ability to double capacity if needed.

GM – I’ve been an outspoken critic of GM all year, but that doesn’t mean that I’ve dismissed the automaker as a force in the industry. In fact, based on its success in China, GM may very well topple Toyota as the new again No. 1. GM has the cash, resources, and chutzpah to recover, enough moxie to siphon sales from Chrysler going forward. Yes, the Cadillac CTS is the best luxury car built in America, one of the best in the world for that matter.

Japan Big 3 – Toyota, Honda and Nissan are each carving out their own paths, with highly efficient hi-tech vehicles on the way. When it comes to hybrids, electric cars and such, these three companies will be at or near the top in production for years to come. Toyota is stumbling and it remains to be seen if its Runaway Toyota problem emerges to become a scandal or is quickly attended to and forgotten.

Other Players

Of course, there are other players in the market who will also siphon sales from Chrysler. And, I’m not even talking about those cars coming from India and China which will disturb the market further thanks to their surprisingly decent quality and low prices. By 2015, mostly everyone will have a good mix of hybrids, pure electric cars and diesel offerings, putting additional pressure on Chrysler to catch up.

Alas, though Chrysler may make it through 2010 and well into 2011, America’s third largest automaker will have a tough time competing even with Fiat’s assistance.

Sergio Marchionne managed to work his magic with Fiat, but me thinks that once the full scope of the Chrysler recovery burden weighs in, he’ll quickly vanish and Chrysler’s slim hopes with it.