Tuesday, July 16, 2024

Chrysler CEO forecasts ‘resurgence in car segment’

Detroit — Chrysler will show a new concept vehicle early next year pointing to the future of the Stellantis NV brand’s “harmony in motion” vision ahead of the launch of its first electric vehicle in 2025, Chris Feuell, the brand CEO’s, said Wednesday.

The remark came as Feuell was discussing the future of the sedan at Chrysler during a fireside chat at Reuters’ Automotive USA summit in light of the 300 ending production at the end of the year in Brampton Assembly Plant outside Toronto. Feuell has said the nameplate could see a return in the future, but Chrysler’s next launch will be a crossover EV.

“It made me kind of sad to see a lot of the OEMs walking away from the car segment,” Feuell said on stage at Huntington Place. “And if you think about what customers are looking for in an electric vehicle, yes, they want range. They want accessible charging. They want something that’s affordable. And from my perspective, I think we’ll see a resurgence in the car segment.”

The company was a leader in the move away from cars when in 2016, Stellantis predecessor Fiat Chrysler Automobiles NV axed most of its sedan models. Similar cuts followed by General Motors Co. and Ford Motor Co.

For now, though, it’s the crossover market that is booming, and Chrysler wants a piece of the action. The electric model in 2025 will be inspired by the Airflow concept the brand debuted last year, but look different, Feuell said. It will be built on the company’s STLA Large platform, have two rows and be the first vehicle in North America to features the automaker’s three new software platform: STLA Brain, STLA SmartCockpit and STLA AutoDrive for up to Level 3 automated driving.

That technology as well as a central message of sustainability from Chrysler’s “harmony in motion” vision is what Feuell says will help differentiate the offering. Chrysler plans to be all-electric by 2028. That extends beyond the product, too, she said, emphasizing efforts to allow customers to purchase a vehicle online, provide customers information at the right time before and after delivery, from installing a home charging station to providing maintenance updates, and use artificial intelligence in its call center to answer general questions.

“We’ve been rolling out this this pilot of digitizing the sales experience, how it may cause a shift and where the margin of the dealership comes from,” Feuell said, “because there used to be very heavy discounts on the front end of a vehicle sale, and then they make it up in (finance and insurance), and parts and services, as well. So, this test is a really good learning for us to see where the margin and value can be captured. And that is a reframing of how the dealer thinks about it, because it’s how you create value for the customer rather than how do we just lock them in an office and extract as much as you can.”

With Stellantis’ global scale, Chrysler also will leverage for future products parts sharing with European brands like Germany’s Opel and France’s DS Automobiles that will reduce investment costs and increase speed to market.

In the meantime, with the end of the 300, Chrysler will onluy have production of the Chrysler Pacifica for 18 months. The minivan pioneered by Chrysler Corp. marks its 40th anniversary this month.

The vehicle has bucked the U.S. sales decline seen at Stellantis’ other brands. Pacifica sales are up 48% year-to-date compared to 2022, driving a 41% increase in Chrysler brand sales. Pent-up demand has helped after production of the Pacifica was affected by a microchip shortage the past few years, though Feuell says the vans are attracting customers with active lifestyles, from empty nesters who enjoy travel to social-media posters of “#vanlife.” Feuell predicts double-digit growth for the plug-in hybrid version in the next year.

“We’re still going to see a lot of those buyers coming back in 2024,” Feuell said of customers affected by the chip shortage. “We started launching some really creative marketing campaigns and sales events to help bolster Pacifica in particular and get it back on the radar of dealers who didn’t have it in inventory. They kind of forgot to sell it, and so we had to really go through a retraining effort with them to refamiliarize them with the Pacifica on how to deliver it properly to those customers.”

The Pacifica is built at Stellantis’ Windsor Assembly Plant in Ontario, which has undergone a $1.38 billion retooling to support new platforms for EVs and plug-in hybrids. Autoworkers represented by Canadian union Unifor ratified a new agreement on Monday that includes 16% wage increases over three years, cost-of-living adjustments, increased pension contributions and a shorter time period to the top wage. As result, Chrysler’s costs are going up, Feuell said.

“We’re looking for efficiencies to offset those costs, because we know that we can’t pass all of that through to the customer,” she said. “We’re going through those processes now, but it’s been something that we’ve been planning for since the negotiations started.”

Affordability in the shift to EVs also is a point of emphasis. Although new Chrysler vehicles will have some of the company’s latest technologies, Feuell said the automaker is focusing on technologies that focus on what consumers need. The brand also is working Stellantis’ financial services on innovative ways to address monthly payments that looking at the overall manufacturer’s suggested retail price.

With interest rates remaining high, Chrysler also has increased incentive spending and emphasized leases.

“That really gets the payment to a much more affordable level for customers and gives them a bridge, whether their term is three years or four years, until they’re ready to come out of that lease and consider something new,” Feuell said. “And ideally, the interest rates are lower at that point in time.”




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