Are American motorists ready for the Dodge Lamb?
The maker of the rugged Ram pickup and other big wheels isn't rolling out that nameplate just yet. But parent Chrysler Group is sending a new fleet of smaller cars and trucks into the marketplace -- and not a moment too soon, given the sudden flow of red ink as it struggles to sell its full-size models to customers seeking mileage over muscle.
The U.S. arm of Stuttgart, Germany-based DaimlerChrysler depends more heavily on sport utility vehicles and pickups than many of its principal rivals. Trucks, excluding minivans, accounted for 64% of Chrysler Group's sales last year. Toyota Motor Corp., which this year has supplanted Chrysler in the No. 3 spot in the U.S. market, relies on pickups and SUVs for just 37% of its sales.
Chrysler Group's reliance on heavy metal was underscored last week when the company posted a $1.5-billion loss for the third quarter, the result of slumping sales, backed-up vehicle inventories and heavy discounting aimed at trying to move some of that stock off dealer lots. Ram sales through September were down 14% from a year earlier, and the Dodge Durango SUV had fallen 41%.
"They lost big because they tried to force the market" by continuing to build trucks, Burnham Securities analyst David Healy said.
Even though fuel prices have come down from the year's record highs, Chief Executive Tom LaSorda has acknowledged that his company faces steep challenges. Chrysler Group is cutting production of large trucks this quarter and is working under the assumption that prices at the pump will remain high -- not just $3 a gallon but even $4 down the line, LaSorda has said.
Going smaller might seem a tough chore for a company that has built its reputation on Dodge trucks, rock-crawling Jeep SUVs and the powerful flagship Chrysler 300 sedan.
Torrance attorney Mark Allen, 44, said the new Dodge Caliber compact was one of the cars at the top of his list when he started looking to replace his Mazda Miata roadster.
He's no stranger to Chrysler products; his wife drives a Jeep Liberty. But when he stopped by his local Dodge dealership, he said, he was disappointed in the Caliber's mileage.
"A small car ought to do better," he said, comparing its 32 miles per gallon on the highway with the 38-mpg rating of Honda Motor Co.'s Fit.
Still, Chrysler Group might not have to work too hard to persuade customers to think of its brands when they go looking for smaller vehicles, said Jeremy Anwyl, president of Edmunds.com in Santa Monica.
