Saturday, July 3, 2010

“UH OH, SERGIO…”

7/3/10

Today’s (i.e., Saturday, July 3’s) Wall Street Journal featured an interview of Fiat, and Chrysler, Chairman Sergio Marchionne by Paul Ingrassia, the best automotive business journalist currently plying that trade.

One can’t help but be impressed by Mr. Marchionne’s proven turnaround prowess and his keen grasp of the obvious that others refuse to see, as evidenced by his observation that “most car advertising assumes that people have IQs that are missing a digit.” (Sadly, he hasn’t yet figured out that it is that assumption that makes such advertising so effective, but I digress.)

But to be impressed by Mr. Marchionne, and to be pulling for Chrysler, is not the same as to be sanguine about Chrysler’s future. As I have pointed out numerous times in the past, the car business is about product, and Chrysler just doesn’t have, for most part, competitive products. As I have also said ad nauseam in the past, there aren’t any bad cars out there any more, but of those that are close, a disproportionate number bear one of the Chrysler nameplates (of which there are too many, by the way). This does not mean that one should not buy a Chrysler if one can get a great deal on one, but companies don’t prosper selling their products exclusively to those seeking great deals.

The hope is that the importation of Fiat technologies will invigorate the Chrysler product line in time to rescue Chrysler, but such a hope is clearly a stretch. Fiat makes some stylish, practical, and fun cars that sell well in Europe. However, Fiat is only a few years, and Sergio Marchionne, past what most thought was near certain corporate death. Further, Fiat’s past forays in this market have been monumental flops. Sure, times change, and Fiat is a vastly different company than it was in the ‘70s. But how many people do you know who are out there saying “Boy, I’d really love to have a Fiat, but, since they’re not sold in this country, I’ll have to settle for a Honda”?

If I could pick a guy to attempt a turnaround at Chrysler, it would probably be Sergio Marchionne. And I wish him well, especially in his rumored plans to rejuvenate the PT Cruiser with Fiat underpinnings. But the product well has been dry too long at Chrysler, and it may be far too late to address that problem, at least for a company like Fiat.

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