Chrysler Pins Recovery on New 200 Sedan After Q1 Loss
Chrysler began shipping the redesigned 200 sedan in May 2014, aiming to revive sales after a first-quarter shortfall and to meet ambitious growth targets set by Fiat Chrysler.
Chrysler Group LLC started shipping its new 200 sedan to US dealerships in May 2014, banking on the midsize model to reverse a disappointing first quarter and lay the groundwork for future growth. The launch follows a reported quarterly loss, the first in some time, as parent company Fiat SpA completed its buyout of Chrysler earlier that year.
Chrysler’s chief financial officer, Richard Palmer, said the new 200 would not have a major impact on sales until the third quarter, as initial shipments ramp up. The car is central to the company’s five-year plan, which targets an increase in Chrysler brand deliveries from around 350,000 units in 2013 to 800,000 by 2018. That plan, announced by Fiat Chrysler Automobiles CEO Sergio Marchionne, puts considerable weight on the 200’s success in the competitive US midsize segment.
Chrysler 200 production and investment
The new 200 is built at the Sterling Heights Assembly Plant in suburban Detroit, which was earmarked for closure in 2009 but retained and modernised after a $1 billion investment. The decision to keep the plant running was tied to Chrysler’s need for a strong contender in the midsize market, where it has lagged behind rivals such as the Toyota Camry.
The redesigned 200, which debuted at the 2014 Detroit Auto Show, was developed on a new platform and features a nine-speed automatic transmission. Early reviews from US critics were more favourable than those for its predecessor, suggesting Chrysler had addressed some of the weaknesses that limited the outgoing model’s appeal. Pricing for the 2015 Chrysler 200 started at $21,700 in the US market.
Sales outlook and brand strategy
Chrysler’s ambitious sales targets rely heavily on the 200’s ability to win market share from established rivals. The brand’s US sales in 2013 were less than half those of the segment leaders, and the previous 200 lagged far behind the Camry. While the new model’s improved design and technology were intended to close the gap, Palmer cautioned that a full sales impact would only be felt from the third quarter onwards as dealer inventories built up.
Fiat Chrysler’s broader plan also involves leveraging the 200’s platform for other models and focusing investment on US production. The Sterling Heights plant’s future, once uncertain, is now closely linked to the 200’s fortunes. If the car fails to meet expectations, the company could face renewed pressure in a segment that remains one of the most competitive in the US market.
For context on the 200’s development and how Chrysler prepared its Michigan plant for the new model, see Chrysler shuts Sterling Heights plant for 200 production, FCA forecasts €8bn capex
