Dodge ready for round two
BY NEIL MCDONALD | 23rd Aug 2006
Making a suitably high-profile return last week with former undisputed junior welterweight champion Kostya Tszyu – who himself is contemplating a daring comeback after a brutal loss in 2005 – Dodge launched its Caliber hatchback into the ruthless small-car segment as part of the US brand’s multi-million-dollar comeback campaign.
Following fellow Europeans Fiat and Renault, Dodge returns to a much-changed Australian new-vehicle landscape that has an unprecedented number of brands and models and an ever-increasing number of budget cars sourced from Asia.
Undaunted, Chrysler Group Australia (CGA) is planning an aggressive expansion push for Dodge, mindful of the Renault return in 2001 which blew $20 million on a far-reaching marketing campaign to launch four models and re-establish the brand with bold sales forecasts that never came to fruition.
CGA managing director Gerry Jenkins told GoAuto this week that it would be a challenge to re-establish Dodge "in the hearts and minds of consumers" – but argued that there were few similarities with Renault.
"We’re not a stand-alone business, we’ve got Chrysler and Jeep," he said. "We already have a little bit of goodwill out there and a solid customer base to draw on.
"I think we will see a snowball effect. The cars are well suited to our market and the brand is something that Australians can really relate to, probably better than a Renault."Unlike Renault, Dodge also has a dedicated infrastructure and network in place. And Mr Jenkins insisted that CGA had no need to spend anywhere near the $20 million Renault did for its re-launch because "we don’t really think we have to".
"We’re going to be as creative as we can and break-through as we can and leverage our network and customer base to slowly grow the brand," he said.
GoAuto estimates the Dodge re-launch campaign will be between $5 million and $10 million, which will include new dealer infrastructure for some of the 48 Dodge dealers stationed around the nation.
CGA is responsible for Dodge volume and profit, which is part of its business plan for the brand. Like other DaimlerChrysler divisions, the business plan will be consistently re-assessed.
"Every year we look at a three-year plan and it’s always a rolling plan," Mr Jenkins said.
He said it was not simply a case of the US parent writing a cheque for Australia and letting the local operations do their own thing – Dodge will be scrutinised every step of the way.
But to succeed, Mr Jenkins said he believed Dodge would need a minimum of four or five products in Australia.
Despite a strong Australian fan base in pick-up truck circles, models such as the Ram will not be introduced in the short- to medium-term. CGA management under Mr Jenkins scuttled right-hand drive conversion programs instituted by his predecessor Judith Wheeler and he reiterated again this week that vehicles like Ram and Dakota would not be sold in Australia unless specifically engineered for right-hand drive.
Ultimately, Mr Jenkins believes that by adding Dodge product into the Jeep and Chrysler mix, combined sales will eclipse Mercedes-Benz in a very short period of time, possibly as early as 2009. Last year Mercedes-Benz sold 13,330 vehicles in its portfolio, with a 2006 expectation of around 14,500.
Mr Jenkins is confident CGA "should be able to take the lead" and comfortably sell more than 14,500 vehicles a year.
"I haven’t set a specific date as to when we’re going to have that accomplished by," he said.
"But with all the new product that we have over the next 24 months, and given the fact that we deal with a much more fluid market than Mercedes at the premium end, we’re playing in a much larger scale of the market.
"Consequently it only stands to reason that we should become the volume brand in the family."Last year Jeep and Chrysler combined sold 7557 vehicles, which was a 13 per cent increase over 2004 and the best annual performance since 1997, built largely on the arrival of the popular 300C sedan and revamped Jeep models.
"This year we’re going to do around 9000 vehicles," Mr Jenkins said. "Potentially we will blow the 9000-mark and Caliber should help us beat that."Adding Dodge to the portfolio means CGA can expect up to a third of all future sales to be Dodges, with the brand eventually becoming the volume leader.
"We think that within a short period of time we should be able to take the lead and eventually become a top-10 seller in Australia," Mr Jenkins said. "These are very conservative estimates – certainly the trend is in the right direction.
"Dodge offers incremental growth, but so does the product offering. If you go back to 2003, we (CGA) basically had a five-car showroom. By 2008 that’s going to grow to about 20 products.
"The better part of that is that of those 20 products, 15 of them will offer hi-tech diesel alternatives."Mr Jenkins said diesel power was emerging in its own right as a desirable trait in new vehicles.
"That’s where our strategy is – we’re offering great diesel engines and will continue to do so and make that a big part of our strategy," he said. "Dodge isn’t just Caliber. It is the first vehicle to penetrate the market but Dodge is a lot more than that. It’s the top-selling brand in the US.
"We sell more Dodge in the US than we sell Chrysler and Jeep combined – that’s a big factor. It certainly complements the existing stable that we have.
"We’ve got Chrysler and Jeep, which are iconic American brands, and this is just the third brand that we’re bringing to the portfolio."As a result, Mr Jenkins believes Dodge will help build the CGA portfolio "and really establish ourselves".
According to Dodge general manager of sales Brad Fitzsimmons, Dodge will have a slightly lower pricing strategy to Chrysler.
"Dodge is going to be distinctively different to Chrysler," he said. "There may be some things we can do to separate them. And we haven’t identified all these things."
What's coming from Dodge:
Caliber 1.8/2.0 - AugustCaliber 2.4 RT - November
Caliber SRT/4 - 2007
Nitro 4WD - 2007
Medium sedan - 2007
Large sedan/SUV - 2008
Hornet hatch - 2008
Challenger coupe - 2008
Charger sedan - 2008