Chrysler's New Ram Plan Poses Brand Jam

Chrysler's New Ram Plan Poses Brand Jam
http://www.businessweek.com/autos/autobeat/archives/2009/09/chryslers_new_r.html

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.

If you consider it likely that Fiat and Alfa-Romeo combine for less than
1 point of share, then you have five brands potentially carving up
something between 4 and 6 points of share, and that is if the company
over-achieves. Also…four brands at a single showroom, while we wait to
see how the company sort out the distribution real estate for Alfa at
Chrysler dealerships.

This goes to brand/distribution/marketing efficiency. Toyota has 16.5%
of the market spread across three brands. GM has 16.7% of the market
with the four brands it plans to go forward with—Chevy, Cadillac, Buick,
GMC.

If Chrysler isn’t clever beyonid all expectations, it is going to have a
brand jumble that will make people look to GM as a benchmark of
brand/marketing efficiency.

 

The only way this idea makes sense is if they intend that the brands
still in existence in five years will be Fiat, Alfa Romeo, and Ram.

 

Oops -- also Jeep. Probably. In which case Fiat's investors should
start selling, to avoid the Jeep Curse.

 

Oh wow, gotta get me a new Dodge Ram Van, man....

 

Wish that they would bring that back and get rid of that abortion they
make now. Dodge needs to make a competing full sized "van" and not a
delivery truck. My friend had a Ram Van, 318 V-8, TorqueFlite. He
loved that vehicle. It finally just fell apart around him. He now has
a Dodge Grand Caravan, but he said it is really not the same.