Chrysler Turnaround Moving On

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With the turnaround of the Chrysler Group seeming to pick up momentum, the group's executives are broadening their horizons to see beyond the next 30-day sales report or quarterly financial statement.

Dieter Zetsche, the Chrysler Group’s chief executive officer, told reporters the next step in the company’s recovery is to establish a selling position that will attract buyers and enable the company to expand its sales volume by more than 25 percent by start of the next decade.

The Chrysler Group sold roughly 2.9 million Dodge, Jeep and Chrysler-brand vehicles last year and would like to see that number grow by more than 1 million units annually by the start of the next decade, Zetsche said.

As part of the strategy, The Chrysler Group will focus more attention on the car side of the business, where its market share has steadily shrunk into single digits in recent years -- but it isn't planning to follow General Motors and Ford's strategy of decontenting vehicles in an effort to boost sales, Zetsche said.

The Chrysler Group isn't interested in "turning our cars into empty tin cans," he said.

“We are clearly focused on lifting this company from the struggle for survival to a new standard of excellence,” said Zetsche.

Product-led revival, anyone?

"It's not enough just to safeguard the profitability of a company," added Zetsche.

Zetsche said the Chrysler Group would build its future around the company's proven ability to design innovative new vehicles such as the PT Cruiser. Chrysler also plans to introduce 11 new vehicles and revamp 10 others over the next three years.

The other elements of the strategy include improving the company’s record for taking care of customers and its overall efficiency. The company might not become the leader in customer handling or the most efficient in the world but it expects to be among the leaders in both areas.

“We want to protect our leadership in product development and to match the leaders in other dimensions,” he said. “We also have to do more with less,” Zetsche added.

The focus on new products, operational excellence and customer services will make Chrysler more like an import automaker than a traditional American car company, he said. “We have to accept some risk and accept some people won’t like what we’re doing,” he added.

Another part of the strategy involves paying close attention to the new emerging generation of drivers who are still under the age of 25, Zetsche said.

“Direct sales to this group will be very limited for some time,” he said. “Most of them will buy a used car in their first round,” he added. “We are really trying to build the base for long term. We have the same opportunity the Japanese had. They did the right things 20 and 25 years ago and they are still selling to the baby boomers,” Zetsche said.

Chrysler has ample room to expand its capacity without building new plants, Zetsche said. “We will invest to break bottlenecks,” he added.

Zetsche, echoing comments made by DaimlerChrysler chief executive Juergen Schrempp also said Chrysler expects to remain profitable in the short term. Chrysler earned $777 million in the second quarter, compared with a loss of $146 million in the same period last year. The automaker’s share of the U.S. market is rising this year for the first time since 1998.