Has Chrysler Finally Found its Soulmate?
Going in and out of relationships, some of them quite toxic, before finding true love is not exclusive of humans
It does not take watching several romantic comedies to realize that finding true love is hard. Most of us go from one relationship to another because of problems such as cheating, lack of real interest, negative influences, or the simple end of the initial feeling before meeting someone with whom develop something strong and steady.
Companies are living beings, so they also interact with others and, as a result, become exposed to all those problems. There have been several cases of deals closed with ambitious plans which were broken shortly afterwards because of the equivalent versions of all those problems. Sadly, automakers are definitely not exempt of them.
The Chrysler Group is a peculiar example of that because it has gone through relationships of many types: from short-term deals, like when it produced the Volkswagen Routan, to steady partnerships, such as acquiring AMC mostly in order to use the Jeep brand itself. Take a look at some of those brief affairs on the paragraphs below.
Ford and GM have been successful at both sides of the Atlantic for a long time, the former by using the same brand and the latter using multiple subsidiaries. In the 1960s, Chrysler tried a mix of both strategies: gradually acquired stakes of some smaller companies and bundled them into a regular European branch of its own in 1967.
It all started with an increasing acquisition of Simca stakes, then went on with the Spanish maker Barreiros and the British Rootes. Chrysler gradually increased its presence as well by using its own brand on newer cars, such as the Chrysler-Simca 1307, and taking some to the USA with rebadging like the Plymouth Cricket.
As you can imagine, that convoluted branding strategy was not appreciated by the public. There were problems to accommodate cars of Simca and Rootes in one lineup and the headquarters went into financial trouble in the 1980s, so it needed help itself. Chrysler Europe was sold in debt to Peugeot-Citroën for a nominal US$ 1 in 1978.
Back in the 1970s, North-American makers had to act fast to deal with the oil crisis and their best option was to form alliance with the Japanese competitors instead of losing consumers to them. Chrysler selected Mitsubishi for that and began selling compact cars under its own brands, which led to captive imports such as the Dodge Colt.
The Japanese cars filled a gap at Chrysler’s lineup and sold rather well. However, that encouraged Mitsubishi to sell them through dealers of its own, which led to a conflict of interest. The partners worked on the issue by building a joint factory in the late 1980s and developing a new platform for new models of both brands.
Over time, Chrysler lost interest and sold its stake to Mitsubishi so as to slowly end the partnership. The North-American moved on to work on projects such as further integrating the recently-bought AMC to its portfolio and Mitsubishi was set free to pursue its own goals. The joint factory kept building Chrysler car models until 1995.
The success of the K cars went to Lee Iacocca’s head. Chrysler’s then-director decided to save the Italian maker from a financial crisis caused by the oil crisis of the 1970s by making it an “extra-premium” division of the North-American company and investing US$ 50 million in it. Many of the original Lamborghini executives kept their places.
Beside keeping the Italian brand strong, the goal was to extend its prestige to its partner. However, the first part had some problems because Chrysler proposed some changes to the upcoming Diablo which were badly received. That also made the car’s development take longer and miss the maker’s 25th anniversary in 1988.
The duo also released joint concepts, such as the Portofino, but it was difficult to honor both images in one model. The Diablo made enough success to turn a profit for Lamborghini in the early 1990s, but the positive era did not last long even with Chrysler’s help at sales: the Italian company kept losing money and was sold again in 1993.
In 1998, the company merged with Daimler-Benz with the promise of equally significant roles and the condition of the largest cross-border deal ever closed. The Germans got the chance to expand their operation, the North-Americans could definitely use the financial support, and the group could work in several market segments at once.
Things, however, did not happen as promised. The partners failed to reach synergy, the car models designed for Chrysler and Dodge were criticized for sharing parts from old Mercedes-Benz models, and sales kept going down. Both partners became more and more dissatisfied and the merger was dissolved after only nine years.
Chrysler was eventually sold to a private equity firm and suffered again right after that because of the economic collapse of 2007. The cars released in that time had to wait for Fiat’s gradual takeover to be improved: a quality upgrade in 2009 and complete replacements around 2014. But not without the events mentioned below, of course.
Fiat Chrysler Automobiles
Like in marriages, living together is difficult at first. Fiat had to make Chrysler profitable and the quickest way to put that to practice was badge engineering. Each partner was strong mostly in one continent back then, so exporting them from one side of the pond to the other seemed quite easy and simple. The first results of that came in 2011.
In practice, Chrysler and Lancia swapped some models and Fiat and Dodge swapped others. The makers were quite honest by not trying to hide their origins with visual touches, but it also made people clearly see how different they were. Besides, the models were old enough to make people skeptical about their prospects.
As the merger progressed, the company moved to developing joint platforms prepared to deal with their multiple brands. While the Chrysler 200 and the Dodge Dart did not really take off, later releases such as the Fiat Toro and the Jeep Renegade were more suitable to the latest trends and helped the newly formed FCA finally prosper.
After so many attempts, it seems that Chrysler has finally found a life partner in Fiat — and later in the PSA group, if we take polyamory into consideration. What do you think of its latest actions? Do you think it will have enough space to prosper while contributing with the group? Feel free to share your opinions by leaving a comment below!