Hey, that rhymes!

ha!

With some discipline and focus on the parts of both “Partners” this is a good strategy that boosts Chrysler’s Survival Chances, and Provides Nissan with an answer to expand profit and keep Trucks in their lineup.

Chrysler has no drive to improve fuel economy on jeep (they think people get a jeep because its a jeep, not cause of gas, and they are right) But imagine all of the people that would flok to the brand if their fuel economy got better.

Off road pedigree and 24 mpg… YES PLEASE!

Poser trucks shouldn’t exist – if you haul stuff at least twice per week for a living, then yes, a truck is a need. With prices still well over $3.50 a gallon and not likely to go much lower again I can see the US finally starting to downsize. We’ve lived in this “supersize” everything mantra for too long now in every aspect of our lives.

And the Titan is a far better truck then the Ram. Nissan would be better off adding more options to the Titan than rebadging a Ram. Look at what happened when Mitsu rebadged a Dakota!

If Nissan do expand to rural areas, it might make sense. But they will be attending that party long after Toyota and Honda have already arrived.

Don’t bash it as 3rd rate if you haven’t.

No, I havn’t driven the ‘09. ‘06 is the latest I’ve driven.

Is the ‘09 really a quantum leap forward, compared to the ‘06?

davey49 :
August 9th, 2008 at 5:43 pm

The Titan is actually very good. Nissan should’ve made a regular cab version. That’s why sales are so low. There’s also no HD version and no engine choices.

Thanks for the info. That makes sense – lack of choices.

Have you driven the 2009 Ram?

Don’t bash it as 3rd rate if you haven’t.

Those were my thoughts when VW announced they’d be selling rebadged Chrysler minivans under a strange name.

That doesn’t make much sense either.

Ptrott

Why dont americans believe in america anymore?

We do. I’d rather have an ipod than whatever it is Sony makes to compete with ipod. Apple knows it’s about the product. Detroit just doesn’t get that.

For anyone

How bad is the Titan? Can it really be worse than the Ram?

That’s the entire point: Cerberus is trying to outsource those functions so that it doesn’t have to carry their costs. Less cost –> lower break even point and less risk (at least in theory.)

Mercedes knew they were billions and years away from designing an entirely new product cycle which chrysler needed and still does now.

Again, that’s the impetus to outsource.

Before they acquired it, I have little doubt that Cerberus had a general idea that the car lines should be pared down or scrapped entirely, and that the focus should be on trucks, because they are better at making those.

Nissan is a logical partner for large trucks, because Nissan wants to have a truck in their lineup but has had real trouble in building a satisfactory version of their own.

I see many problems with the Cerberus plan, but those problems are not on the cost side of the equation. Ultimately, they still have serious revenue and branding issues, plus they are entrusting core products to outsiders who have less incentive to care about the outcome than Cerberus does.

If I was advising Cerberus, I don’t think that I’d recommend putting their fate into the hands of Chery, Tata or another company, particularly a company without a US presence that might have an incentive to screw up their end of the bargain just enough to lower the sales price of Chrysler when it comes to sell.

With a product swap, Nissan has more incentives to make a deal work. The Indians and Chinese may not have the same motivations to make it work for both parties. This one is a crap shoot.

If you want to understand Cerberus’ perspective, you have to look at this as a private equity operator would and not as other car companies would measure it.

Their goal is to lower their costs so much that even a moderate level of vehicles sales can generate a profit. If successful, this outsourcing concept should lower their break even point considerably. If it works, there would be no need to beat the Camry or Accord or even the Altima, but just to sell enough cars at a high enough price to generate a return.

You also have to understand that Cerberus pretty much picked up Chrysler for free. The purchase price didn’t really go into Daimler’s pockets, but stayed in the company to be ultimately used as working capital.

In essence, Cerberus assumed the liabilities and the cost of future operations, but got into the deal on the cheap. This means that they don’t need to earn that much in order to make it a profitable venture for the investors, just so long as they can control the burn rate.

It’s not entirely a bad idea, but I suspect that their plan does not allow for enough time for this to happen, and fails to recognize the risks of putting the company’s product quality into the hands of competitors. One of those things that looks great on paper, but in practice is probably going to be tough to implement.