Why Does Chrysler Brand Need a Future?

AUBURN HILLS, MI – At the recent investor day here, automaker Stellantis said little about its Chrysler brand, though Chrysler leader Christine Feuell confirmed that the next new Chrysler vehicle will start production in 2025 as a “mid-sized, two-row SUV.”

Why are we still talking about Chrysler’s future?

Over the past quarter century, we have seen many brands that can’t pay their own way fade to black: Plymouth, Eagle, Mercury, Pontiac, Saturn, Saab, Oldsmobile, Hummer. General Motors’ Buick nearly went to the graveyard in 2009 but was saved by its popularity in China.

Chrysler is down to one model, the Pacifica minivan, while the company has drifted for more than a decade with several Chrysler concept cars attempting to chart the future of the brand. Are there enough would-be buyers who would wring their hands and rend their garments if the minivan was consigned to the Ram or Dodge brand to really matter? That is something Chrysler has to be looking at as it prepares a Chrysler midsize SUV.

Stellantis has quite a tree of brands – Abarth, Alfa Romeo, Chrysler, Citroën, Dodge, Fiat, Jeep, Lancia, Maserati, Opel, Peugeot, Ram and Vauxhall, as well as commercial brands. And while Stellantis CEO Carlos Tavares says that massive brand stable is the company’s strength, rather than a hindrance, trees are often made healthier by properly and wisely pruning branches.

Not everyone agrees, though. "Chrysler has been criminally ignored by Stellantis and FCA before it," says AutoPacific senior industry analyst Ed Kim. "But I might argue that Stellantis's only volume brands in North America are 'rough and tumble brands: Ram, Dodge and Jeep." Adds Kim, "I could see room for Chrysler to evolve into something classy, avantgarde, yet attainable, like Peugeot in Europe."

There is an enterprise cost to maintaining a dying brand with just one aged model (and one on the way that will require lots of feeding and money to make competitive) even if that one model is profitable.

The Chrysler brand’s metrics are lousy and seem hardly worth building on. Chrysler ranks second to last in J.D. Power’s latest Initial Quality Study. In the firm’s Vehicle Dependability Study, it ranks seventh from the bottom. Consumer Reports doesn’t give shoppers much of a reason not to buy the Pacifica, unless it’s the plug-in hybrid version: “The suspension delivers a comfortable, composed ride, and the cabin is quiet. The Uconnect infotainment system remains one of the best available. The regular Pacifica has average reliability and is recommended, but the PHEV is not because of below-average reliability.”

Still, this lone vehicle under the Chrysler brand is still paying its own way. While Stellantis’s overall sales dipped 10% in the U.S., to 332,540 vehicles in the first quarter, Pacifica sales jumped 15% compared to first-quarter 2023. U.S. buyers purchased 33,114 Pacificas, with PHEV sales soaring 111%. PHEV sales represented 22%, or 7,320 vehicles, of all Pacificas sold in the U.S. In all, Pacifica sold over 120,000 units in 2023 and held the biggest share of the minivan market.

The Pacifica was developed more than a decade ago before it went on sale in 2017. The company invested $2 billion at the time in the minivan and plant tooling in Windsor, ON, Canada. In other words, the investment has been fully amortized, and the Chrysler minivan is profitable, especially since it holds the market-share lead against Honda, Toyota and Kia.

Not surprisingly, CarMax reports that the average Chrysler buyer’s age is less than 41. That’s not bad at all, but with only the minivan in the brand, young or young-ish families naturally account for a big percentage of buyers. The Pacifica has an edge, with a PHEV variant and the Stow ’n Go seating in the second and third rows that is a big reason to buy for many families. Translating that reason to buy a Chrysler minivan to selling Chrysler-branded EVs, SUVs and/or CUVs, the midsize SUV being developed, or even a sedan like the now discontinued 300 is a huge jump given the fierce competition. In other words, don't leave the porchlight on waiting for throngs of happy minivan owners ponying up to buy a Chrysler mid-sized SUV out of brand loyalty.

Pacifica starts at $41,095, though it is transacting after incentives for about $38,685, while the Honda Odyssey starts at $37,840, the Toyota Sienna starts at $39,080 and the Kia Carnival starts at $34,995. That means Chrysler has the highest starting price as well as the lead market share – a rarity when Detroit goes up against Japan and South Korea.

Tavares said in 2021 that he is “eager to give this brand a future” and suggested that Stellantis is looking for ways to reinvigorate Chrysler rather than cut it. Three years and a pandemic later, though, we are talking about a brand with a decade-old minivan and a planned midsized SUV that will be trying to conquest everything from Ford Explorer, Chevy Traverse, Hyundai Palisade and Kia Telluride to even Stellantis’s Jeep models, and more.

Seems like more than a reach. If Stellantis likes its minivan business (and who wouldn’t?), then just keep improving it the way Ford once did with the Crown Victoria sedan, sell it through the existing dealer network and call it a day when the tank runs dry.