Chrysler cars head for Europe - but first, a subtle upgrading
Sterling Heights, Mich.
At first glance, the LeBaron GTS rolling down the assembly line at this Chrysler Motors assembly plant in suburban Detroit looks just like any of the 50 or so others that will be built during the next hour. But a closer inspection shows some subtle alterations: The taillights are different, for example, and so are the nameplate and other markings. After the car rolls off the end of the line, it will be trucked across town to a customizing shop, Cars and Concepts, where a number of other minor changes will be made before the GTS is ready for sale - in Europe, as the first Chrysler passenger car bound for the Continent in nearly a decade.
``We want to start invading somebody else's market,'' said Dick Dauch, Chrysler's head of manufacturing, as he watched the first Europe-bound car come off the line recently. In the weeks to come, more and more export models will be built at the Sterling Heights Assembly Plant, as well as two other North American Chrysler plants, including a mini-van line in Windsor, Ontario, just across the Detroit River from Detroit.
Until the late 1970s, Chrysler, like the other automakers in the United States, routinely shipped a small number of its cars to European dealers to supplement the products built by its overseas subsidiaries. But Chrysler sold off its European production facilities during its near-brush with bankruptcy and essentially wrote off export sales, which were further hurt by the strong dollar of the early 1980s.
Today, however, the sharply weakened dollar has reopened many export markets, prompting Mr. Dauch to say, ``In Chrysler's history we have never been so capable of competing worldwide.''
The LeBaron, which will be known as the Chrysler GTS in Europe, will be targeted against such European-made cars as the Ford Sierra and the Audi 80. The weak dollar will allow Chrysler to offer a number of standard features, such as power door-locks and windows, that those competitors normally offer only as options. The company's official goal is to sell 5,000 passenger cars and mini-vans in Europe in 1988, though sources say the company's internal goal is closer to 10,000. Eventually, Chrysler executives say, it is possible to boost that volume to 100,000 units a year, or nearly 1 percent of the total European market.
And that is on top of Jeep sales. The sports utility vehicles were introduced into Europe in 1984 by American Motors Corporation, which was recently taken over by Chrysler, and sales this year will total about 10,000. The goal for 1988 is a 50 percent increase.
Initially, Chrysler will establish a dealer network in West Germany, Switzerland, Austria, Belgium, Luxembourg, and the Netherlands. Eventually, it hopes to go into other European markets.
As much as the dollar has declined, however, that is not enough to ensure Chrysler's success in Europe, concedes executive vice-president Robert Lutz.
Mr. Lutz is quite familiar with the European auto market. Born in Switzerland, he spent a number of years as head of the Ford Motor Company's European operations before defecting to rival Chrysler. Drivers on the Continent, he said, are among the toughest and most demanding in the world. ``They're going to look at us closer than European or Japanese cars because US products have a bad reputation in Europe,'' he said.
To ensure that its export models are up to the more stringent demands, Chrysler will inspect the vehicles far more closely than it normally does vehicles bound for the domestic market, according to officials at the Sterling Heights plant. Chrysler will also try to ease the concerns of European drivers by offering one of the most extensive warranties on the Continent, covering the cars for three years and 70,000 kilometers (about 44,000 miles).
Chrysler is not the only US carmaker hoping to use the weakened dollar as an ``in'' to overseas markets. Both General Motors Corporation and Ford have announced plans to sell in Europe. Their goals are more modest, however, as Ford vice-chairman Harold Poling noted recently. The problem, he says, is that Ford is already one of Europe's largest carmakers, so any US imports sold there would ``simply be substituting for cars we'd build over there,'' not a way, he said, of improving the bottom line.
All three US carmakers, however, would like to see sharp increases in their exports to Japan, where they currently do not operate any production facilities. But while any increase in Japan would be large by percentage, it would be small by actual volume. Industry analysts say they would consider it a success if the Japanese were to buy even 20,000 US-made cars a year.