Tuesday, September 8, 2009

Chryslers New Ram Plan Poses Brand Jam

Chrysler is potentially headed for a brand problem that will rival the pickle that GM is trying to extricate itself from.

Here is the deal. Chrysler has three main brands at the moment: Chrysler, Dodge and Jeep. But it has made it clear to the ad agencies pitching its ad account that it is splitting off its pickup truck and commercial vehicle business off to a new brand?Ram.

That?s right. Going forward, and as soon as Chrysler has the idea to run with, the pickup it sells now won?t be sold as Dodge Ram, but rather?.Ram. Other vehicles that will come from the Fiat-Chrysler tie up in the commercial segment will also be called Ram.

So, now we are up to four brands to support. Now, add the Fiat 500, which will be sold as a Fiat when it arrives in Chrysler showrooms in 2011. And, don?t forget Alfa Romeo, which Fiat will sell through Chrysler distribution in key markets that make sense for the Italian sport car maker.

This seems like a lot of brand differentiation to manage and support by a company that has been poor at both.

As I look at auto sales numbers through August, I see a 9.2% market share for Chrysler spread among the three brands it has. That share is inevitably going to go down as the company pares models. Indeed, Merrill Lynch projects that Chrysler loses a whopping five to six points of share in the next four years unless it comes up with some product surprises from the Fiat alliance.---...More

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