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Saturday, July 31, 2004

David J. Phillip / Associated Press

Earlene Kimble looks at a 2005 Chrysler 300 on the showroom floor at River Oaks Chrysler-Jeep dealership in Houston.

Chrysler's new models helping to drive turnaround

By John Porretto / AP Auto Writer

DETROIT -- Ford Motor Co. is calling 2004 “the year of the car,” and General Motors Corp. is touting several new sedans, but it’s smaller rival Chrysler that’s scoring big with a couple of new, uniquely styled models that are helping the company turn around its U.S. business.

The new Chrysler 300 sedan, which some call a “baby Bentley,” and Dodge Magnum station wagon were cited as important contributors to the Chrysler Group’s $614 million operating profit in the second quarter. The results, reported Thursday, were a significant rebound from a $1 billion-plus loss a year ago for the American-based arm of DaimlerChrysler AG.

In particular, the 300 -- called the 300C when it’s equipped with Chrysler’s popular V8 Hemi engine -- has become America’s “in” sedan since hitting showrooms in April.

Rapper Snoop Dogg liked the car so much he called Chrysler directly to order one. Chrysler chief Dieter Zetsche personally handled the deal and even attended a recent Snoop Dogg concert to meet the rapper, Chrysler spokesman Jason Vines said.

“It’s an interesting vehicle because it crosses the lines of a family sedan and a beefed-up performance sedan,” said Mike Wall, an analyst with the forecasting firm CSM Worldwide. “They took a chance by giving an upscale design to a mainstream sedan, but I think they’re going to reap the benefits.”

In its first three months on sale, Chrysler sold 34,571 of the cars in the United States, roughly five times more than its predecessor, the 300M, for the same period last year, according to Autodata Corp.

Analysts, owners and dealers say one of the car’s biggest attractions is its price tag -- $23,000 to $38,000 depending on options -- which most consider reasonable given its styling and content.

But it’s the look and performance of the 300 that’s garnered the most attention.

The car features a large, distinctive grill -- similar to a highfalutin Bentley -- and a long nose and short rear that gives it a bold stance. With rear-wheel drive and the Hemi option, the 300 also has received kudos for its power and handling.

The car competes with vehicles such the popular Honda Accord and Toyota Camry among mid-size offerings, and models from Acura, Infiniti, Audi and BMW on the luxury end. CSM predicts Chrysler will sell 141,000 300s this year, providing a sorely need lift to a division that sold 456,676 cars of all models last year.

Alan Helfman, general manager of River Oaks Chrysler Jeep in Houston, one of the nation’s largest Chrysler dealers, said his July business is up about 10 percent over July 2003, aided largely by demand for the 300. He said customers have traded models from Mercedes-Benz, Cadillac and other brands to buy it.

Houston attorney Joe B. Allen said he spotted the 300C at the city’s auto show this spring, then test drove it and a sporty BMW coupe with an $85,000 price tag before ordering the Chrysler from Helfman.

Aside from his own satisfaction, the 61-year-old Allen said he knew he’d chosen the right car the first time he drove it to one of the city’s restaurants for a meal.

“The valet parkers are the final arbiters of cars,” said Allen, who traded a 2002 Ford Thunderbird for his 300C. “When they park your car right by the front door, where everybody’s got to see it, you know you’ve got a hot car. If they take it a half-block away, you know you’re not in vogue. Mine’s always at the front door.”

Chrysler is in the midst of launching 25 new cars and trucks by the end of 2006, including nine this year. The early success of the 300 and the Magnum, which hit the market in May, contributed to a 2.1 percent rise in U.S. sales for Chrysler for the first six months of 2004.

The Magnum, also a rear-wheel drive that comes equipped with a Hemi, accounted for 7,226 sales in its first two months on sale. CSM forecasts sales of 55,000 for all of 2004.

The Magnum, which has a base price of $22,495, is far from an old-fashioned, wood-paneled station wagon. The Hemi-equipped version can muster 340 horsepower, and some dealers say buyers are trading in pickups and SUVs for the Magnum’s utility and car-like ride.

The 300, Magnum and other new vehicles have allowed Zetsche to keep a promise he began making to investors and others more than three years ago, when DaimlerChrysler tapped him to revamp the company: that new products, though admittedly slow in coming, would help Chrysler return to profitability.

Analysts say Chrysler paid the price in recent years for an aging lineup, poor product planning and an infusion of new vehicles from Asian and European companies.

DaimlerChrysler said Thursday the enhanced product portfolio and continued cost cutting leaves Chrysler “confident of achieving considerable positive earnings in full-year 2004.”

Added Zetsche: “We’re certainly confident for the rest of the year and for the years to come.”

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