AUTO NEWS: Pacifica Gaining Ground - And Learning Lessons

[hemidakota]

After an achingly slow start, Chrysler's new Pacifica is beginning to approach its original sales goals, Joe Eberhardt, the automaker's new marketing czar, told TheCarConnection.com. But the crossover's troubles have provided some lessons the company must learn if it hopes to break the incentives spiral - and achieve its goal of boosting sales as much as 1 million units a year by 2007, Eberhardt said.

Despite early raves, Pacifica sales were running at only a fraction of the annualized 100,000 rate Chrysler expected following its spring launch. That reflected a variety of miscalculations, according to Eberhardt, who recently replaced the controversial Jim Schroer. Putting the emphasis on loaded $40,000 models, rather than stocking showrooms with base vehicles didn't help. Nor did a marketing campaign that didn't spell out the Pacifica's attributes, acknowledged Eberhardt, stressing, "You absolutely have to nail the message you want consumers to take away."

Sales are now pushing the 6000-a-month mark. But to gain momentum, Chrysler had to tweak its marketing - and put cash on the hood. Under Schroer, Chrysler tended to lag the market on incentives, and long-term, Eberhardt would like to stop playing the rebate game, as well. We "have to find a way to get out of that negative spiral," he lamented, not only because of the high costs, but because of the "negative perceptions it (creates about Chrysler) brand equity and brand quality."

Cutting back on incentives will take time, Eberhardt cautioned, requiring new products and an improved image. In particular, the automaker must upgrade negative perceptions about its quality, which Eberhardt conceded have a basis in reality. It didn't help that Chrysler fared poorly in the recent J.D. Power Vehicle Dependability Survey, which looks at three-year-old vehicles, but Eberhardt was quick to note the automaker did better in the Power Initial Quality Survey, looking at new vehicles. And that's backed up by a 20-percent annual reduction in warranty costs over the last two years.

The "next challenge" Chrysler will face comes with the launch of the 300C, the premium-end replacement for the automaker's aging, full-sized models. Eberhardt's team will have to craft a campaign that appeals to both existing Chrysler buyers, as well as the customers it hopes to conquest from the competition. The success of the 300C and other large cars to follow will be critical to the ambitious sales targets set by Chrysler CEO Dieter Zetsche.

During a breakfast meeting, Eberhardt wouldn't go into great depth about his marketing plans - not surprising since he's had so little time on the job. But he did rule out the idea of emphasizing Chrysler's increased use of Mercedes-Benz componentry.

He also insisted that Chrysler is not cutting its ties to Canadian diva Celine Dion, a mega-buck deal inked by his predecessor. Dubbing her part of a long-term strategy, he suggested "she certainly can play a role...(but) the question is what you use her talent for." Going forward, it's less likely Dion will be the visual centerpiece of Chrysler ads, though her songs will be featured in the background. -Paul A. Eisenstein