What's Wrong With This Picture: Planning Sales Edition
Published: November 5th, 2009
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This graph is representative of a major assumption underlying the entire Chrysler Group turnaround plan: namely, that 2009 is a trough year and that (despite the lack of new mass-market product until 2012) 2010 will see Chrysler not only holding the line on plummeting sales, but actually increasing them dramatically. Where does this optimsim come from? In part, a projected rise in SAAR. Otherwise, the only rationale for this assumption is that the financial plan requires this kind of short-term growth to succeed. [Apologies for the giant images… like Chrysler, we’re doing what we can with what we have]
More by Edward Niedermeyer
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Optimism, guys. This is not the hopeless company many present it to be. Was Chrysler's market share not around the 'hopeful' numbers presented here just a few short years ago-- right before the cost-cutting and suicide-style product development bonanzas the Germans enacted? If they simply freshen product, add some sparkle in that process, continue introducing new product, stand behind this product and market to those ends, is this really so far-fetched? It really isn't. Trust that there is pent-up demand for the return of high-blue collar-style to Chrysler and Dodge. The next renaissance will follow. That's how it works.
iNeon:
Trust that there is pent-up demand for the return of high-blue collar-style to Chrysler and Dodge. I don't have that trust because of a company by the name of Ford. Ford managed to stay away from the bailout stigma, is rolling out a new product line, and is being showered with love from Consumer Reports on the reliability front. Those high-blue collar-style buyers are a key Ford demographics, and as a group, are not bailout fans. Much of Chrysler's lost share has turned into Ford's gained share. To believe that people will revert back to Chrysler after tasting Ford or the imports takes alot more trust than I'll every have.Chrysler would have to do something dramatic like when they created the minivan or gave the Ram big rig styling. Without a new got to have product I don't see increased market share for Chrysler. As I see it, Hyundai and Kia are taking over the lower price end of the car market that Dodge used to occupy. Hard to see a Chrysler increase in market share when Hyundai and Kia are aggressively going after the same buyers.
iNeon, Ford had a leader come in and shake things up, and mortgaged the hell out of the company. There were several products in design when he showed up. Chrysler has little in design, can't leverage any money, and has suppliers shutting down assembly plants because they are not getting paid. the only thing Sergio did with his mind numbing boring presentation was confirm what everybody already knew, they're screwed. Who are they going to steal market share from, Ford, who has a two year headstart? GM, who will continue to muddle along for a couple more years? Maybe toyota will roll over and give up some share. Honda most certainly will. How about the koreans? I hear they are all for Chrysler surviving. The industry has about 3x capacity based on today's purchasing rate. That means we could shut down 2/3 of today's assembly plants before the business will get healthy.