Monday, February 25, 2008

Chrysler Pulls out of the Clone Wars

Joseph B. White writes in today's Wall Street Journal that Detroit is rethinking the wisdom of selling three or four versions of the same car under three different brands. Why? "[I]n a market with more than 300 different models -- depending on how you count -- fielding two or three or even four of the same basic car can lead to some very thin slices of pie, especially when increasingly well-informed shoppers can figure out in two or three mouse clicks that a Saturn Outlook and a Buick Enclave and a GMC Acadia are just three different styling takes on the same large crossover wagon."

White continues, "Chrysler's senior management recently declared that it wants out of the clone game. The company, which has the advantage of being closely held and thus not as concerned about what outsiders think, has outlined plans to kill a flock of its slow-selling clones, and focus its efforts on selling more of each model that remains."

After all, "Customers don't care whether they buy a minivan from a Dodge dealer or the Chrysler dealer just down the street. They just want a good minivan. In these difficult times, Chrysler can't really afford the capital and marketing effort to promote two functionally similar versions of a three-row box on wheels."

Read "Send Out the clones."


Jesus Rodriguez said...

Well, given the circumstances with the auto industry now a days, that was the right move. This just means that people have less options to compare. But this can help or hurt as well. It helps with saving the money spent to build the clones, to market, and inventory still left with those cars. The bad would be that with less choices, that person might compare the car/suv/truck with other makes i.e. Honda, Toyota, or Ford. So, its a big gamble.

Erin Knight said...

It seems like this particular article has a lot to do with brand name recognition. The trend appears to be the American consumer moving away from Americanism and toward decision making that involves economics as opposed to culture. If American motor companies are making three models of the same sub par car as compared to Toyota's version of the similar model the only reasoning behind that would be the belief that consumers are so attached to their brand they will look beyond quality. This obviously hasn't been the case in recent years, and it looks as though some American companies are wising up. The next step would be to take the money saved on advertising and production and pumping it back into R&D for one superior model that can compete with foreign companies in terms of quality.

Jason Dunn said...

I have often thought about some of the same issues presented in this post. With the shape that automakers are in today, i'm sure they are re-thinking some of their strategies and wondering if they made the right decision or not. When these large companies are selling basically the same car under two or three different names, all they are doing is creating more overhead costs. More marketing costs, and the costs of running two separate companies. In reality, the cars are ultimatly the same, and the consumer is going to purchase what they find as the best deal. So they are really competing with themselves. What I want to know, is that why wouldn't GMC and Chevy only want to make one truck (instead of the Sierra and Silverado) and use the money saved from having to market two vehicles to market only one truck against a competitor such as Ford or Dodge. I'm sure that as these automakers struggle more and more financially, these questions will be asked.

TaDonne' said...

sounds like a debate between integrity and creativity and financial obligations...To want to stay true to a original theme sounds good, but the clones are what sell in the end.

Anonymous said...

Were Clones the idea of automakers to drive up prices on competeing vehicles? Today, by the looks of things the clones might be causing the problem of the big 3 automaker declines. Instead of creating one truly unique and weel built vehicle and controlling the market in that area. They have tried to produce a wide variety of vehicles that are bland, not weel built and appear eactly the same of other vehicles of different companies.
-Michael Perry