US carmaker prepared to sell Dodge Viper label next in bid to cut costs, writes Alastair Sloane
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Troubled US carmaker Chrysler will soon end production of the retro-styled PT Cruiser, once a standout performer for the brand.
Company vice-chairman and president Tom LaSorda said that the PT Cruiser "ends this (northern) summer".
But he said Chrysler would talk to any company interested in buying the tooling to produce the PT Cruiser under another name.
The PT Cruiser will be the seventh model to be cancelled since New York investment company Cerberus Capital Management bought Chrysler in August 2007.
The carmaker is also looking to sell the Dodge Viper brand as it lines up more aid from the US Government and a deal with Italy's Fiat Group.
Chrysler received US$4 billion ($7.6 billion) in federal funds on January 2 and wants another US$3 billion to keep operating. Its captive finance company, Chrysler Financial, will also get US$1.5 billion.
Axing the PT Cruiser will leave Chrysler with only a handful of international models, including the Sebring and 300C sedans and Town & Country minivan, rebadged as the Voyager in some markets.
The company is, however, planning a rear-drive mid-sized sedan for the global market within two years.
The PT Cruiser was an immediate hit when it first appeared in the US in 2000. But sales plunged by 49 per cent last year compared with Chrysler's overall 30 per cent slide and the US market drop of 18 per cent. Sales in New Zealand of the Mexican-built car have been slow for some time.
Fiat will get a 35 per cent stake in Chrysler in exchange for access to fuel-efficient technology and sales in markets outside the US where Chrysler is largely absent. Under the terms, no cash will change hands.
Cerberus paid US$7.4 billion for 80.1 per cent of Chrysler. Germany's Daimler AG owns the remaining 19.1 per cent of the company but has written the value of its stake down to zero. Daimler says it is still wants to sell its share and has been talking again to Cerberus. Fiat says it ultimately wants to raise its stake above 35 per cent.
Automotive analysts in Detroit say Fiat and Chrysler have little in the way of engine and transmission technology that can be transplanted into each other's vehicles - at least not right away.
Right now, the carmakers' powertrains and technologies reflect where most of their volume comes from. Chrysler relies mostly on beefy V8 and V6 petrol engines to power its high-volume US-market vehicles, like the 300C sedan, Dodge pick-ups trucks and Jeep range.
Fiat uses more fuel-efficient powertrains such as small turbocharged petrol and diesel engines. Fiat also has invested in technologies that save fuel and reduce emissions, like the dual-clutch transmission, which retains the fuel economy of a manual transmission while providing the convenience of an automatic, and stop-start system, which automatically turns off the engine when the vehicle stops and quickly restarts it when the driver is ready to accelerate.
Analysts, however, see some eventual technology-sharing between the two companies. A new V6 engine being developed by Fiat could find its way into Chrysler vehicles, giving Fiat lower costs from greater volume.
A diesel emissions system being developed by Fiat could comply with regulations in 50 US states and eliminate expensive filters and traps in the exhaust system. That technology, along with stop-start and dual-clutch technology, might end up in Chrysler's vehicles.
