Chrysler was founded in 1925 by Walter Chrysler. The company was a market leader from 1925 to 1998. It merged with Daimler in 1998. It merged with Daimler to pay off its loans. Later, Daimler sold its shares, and Chrysler became an independent company. In 2014 it again had a merger with Fiat. Now the company is performing really well. It has a presence globally because of Fiat. The company has its presence in more than 70 countries now.
This report will show what steps Chrysler can take to strengthen its financial results. It will also suggest strategies to make the company grow. It will also suggest what the company can do to make the company more profitable.
Chrysler is one of the big three automobile manufacturers of the United States. Chrysler is now a part of FCA (Fiat Chrysler Automobiles). The company is based in Michigan. Chrysler company was found in 1925 by Walter Chrysler. Chrysler’s idea of minivan changed the whole concept of family transportation back in 1980. The company focuses on the minivan and full-size car segments in North America. The company is the market leader in terms of design, value, and engineering. The company offers a perfect balance of style and convenience to its customers. The company has well thought about their products designs. They have incorporated new technology into their products. Also, they have good storage available in their automobiles. The company has led the market over three decades. They always set standards in the market. Since 1983 they have built over 15 million automobiles. They have introduced a new product in the market with the name Chrysler Pacifica minivan. It has totally redefined the minivan segment. Through this segment, they have introduced in the market new standards safety features. Pacifica has an all-new architecture. It has a quieter cabin. It is a new Americas new hybrid minivan. It has totally changed the market dynamics.
Chrysler was founded with the remains of Maxwell Motor company. In 1928, Chrysler started to divide its products according to function and price. They introduced Plymouth and Desoto for a low price and medium price range customers, respectively. They also introduced a product line of trucks. This product took over corporate hierarchy in about mid-1930s. In 1955 Chrysler made imperial a brand. They also introduced all transmission radio in imperial cars in the successive year. They used to charge $150 extra for radio installation in imperial cars. In 1957, Chrysler introduced EFI cars. It was a big failure in the market. Chrysler merged the imperial brand back to the Chrysler in 1971. The company used to introduce new styles of the imperial after every year. It was a big success in the market. The company introduced Valiant in the 1960s. It was a low budget product. In the 1960s to 1970, the company had multiple mergers in Europe. The company did a partnership with Mitsubishi in these years. They started to sell Mitsubishi products under their brand name Dodge and Plymouth in North America. In 1973, due to the oil crisis, people interest shifted to small cars. This is the period Chrysler struggled to survive in the market. There were other imported products in the market too. This all made Chrysler suffered a lot. They took loans, cut wages of employees, and took measures. This is how they managed to survive at that time. They managed to pay back loans by 1983. The same year they came up with the idea of minivans. This was a big success in the market. From 1985 to 1992, there were joint ventures and partnerships with AMC (American motor corporation) and Mitsubishi (diamond-star motors), respectively.
In 1998 Chrysler merged with Daimler-Benz AG. They created a company called Daimler Chrysler AG. The Eagle brand discontinued them. Jeep was a stand-alone product of Chrysler at that time. They tried to sell merge both jeep and Chrysler as one sales unit. In 2001 Plymouth discontinued too. Chrysler PT Cruiser was built in 2001 – 2002. Voyager continued to be built till 2007, while Chrysler 300C, Jeep Grand Cherokee, and Jeep Commander were built at the plant from 2005 till 2010. In 2007 Daimler sold its 80% shares, and the name changed to Chrysler again.
In recession times 2007- 2009, Chrysler company faced difficulties too. The company shares were sold in 2009 to the new Chrysler Group LLC. The company introduced the products with even better quality and luxury in the market. PT Cruiser, Nitro, Liberty, and Caliber models were discontinued in those times. In 2011 Fiat bought Chrysler shares from the US treasury, made it foreign-owned again. Chrysler 300 was badged with a flagship product in many European markets.
In 2014 Fiat purchased the remaining shares of Chrysler too. The company came under the Fiat Chrysler Automobiles then. Chrysler 200 was redesigned and introduced in the market after its merger. It was a big success for the company. In 2017 the company was charged for not making eco-friendly automobiles. Due to this, their stocks suffered.
Products and Services:
There are four products in the market under FCA. The following are the products of Chrysler in the market:
it consists of Luxury sedans and minivans. The following are its models available in the market:
- Chrysler Pacifica
- Chrysler Pacifica Hybrid
- Chrysler 300
- Chrysler VOYAGER
- Dodge: it consists of Passenger, performance cars, and SUVs.
- Jeep: it consists of Off-road vehicles, SUVs, and crossovers.
- Ram: it consists of Trucks and commercial vehicles
The details of the Chrysler models are as under:
- Chrysler Pacifica:
It is eight passengers’ minivan. The seats have limited thigh support. It has a 3.6-liter V6 engine. This is a comfortable and quiet ride. It has features like a touch screen system, the electric range for about 30 miles, high-end versions of the individual screen with built-in games, and a plug-in hybrid. The 2021 model will come with more advanced safety features.
2. Chrysler 300:
It is one of the roomy and luxurious sedans of the market. It has a 5.7-liter V8 engine.it has an eight-speed automatic transmission. It has a comfortable and quiet cabin. It has responsive handling. It’s a luxury car with a good price in the market though brands like this are quite expensive in the market. It has features like automatic emergency brakes, forward collision warning systems, rotating gear selector knob, and a big information screen in the gauge cluster.
3. Chrysler Pacifica Hybrid:
It has all features like Pacifica, except it is a hybrid version. It has features like a touch screen system, the electric range for about 30 miles, high-end versions of the individual screen with built-in games, and a plug-in hybrid.
4. Chrysler VOYAGER:
It is a lower-cost model of Pacifica. It is one of the most affordable minivans lines. It has features like a 3.6-liter V6 engine, nine-speed automatic transmission, 21mpg power, and no safety standard features. It is not considered a reliable product of the market.
It is exemplified by the charger sedan and challenger coup. This is a refined and capable model. They have many models in the market under this category. Reliability is also varied among these models.
It is considered as rugged and a vehicle that can go anywhere. It has a history of customer loyalty. It lacks in reliability, fuel economy, interior fit, and finish. The wrangler has many improvements in it as compared to the previous model. The Grand Cherokee has the jeep with the highest road test score. Reliability is a big problem for this brand.
Ram is a kinder and gentler pickup truck. This is a lighter vehicle. It has a more efficient fuel system. It has more room for passengers as compared to other models. It satisfies the needs of the most demanding commercial drivers. It also provides tranquility and comfort to its customers.
Chrysler has a style of making deals in a particular way. They tell people credible opinions while making deals. They make deals with a smile on their face. They try to create a friendly environment with their customers. They have a very strict centralized reporting system. The company believes in exchanging ideas with their staff. They discuss problems with their staff members and try to solve problems keeping them in the loop. Managers of the company are mostly flexible, adaptable, and spontaneity in achieving their goals. Chrysler believes in providing quality products to its customers. They have comfortable environments for their workers. They have short working hours to maintain the political alignment of the unions. Even after the merger of Fiat and Chrysler, most of the FCA were from Chrysler. Before the merger of Chrysler, its production was concentrated on the US market only. But after its merger, they are now known globally. After Fiat and Chrysler merger, they went global. Due to poor operational strategy, Fiat-Chrysler faced many difficulties. They had limited funds, so they faced a financial crisis too. They didn’t put the strategy well in function. So FCA faced difficulties due to poor operational strategies. FCA has really good marketing strategies. It was because of this they made a lot of profits. There is a loophole in their marketing strategy too. Most of the automobile markets operate in three big markets only. FCA also operates in Alfa, Romeo, and Lance only (Operations Management on the case study of Mercedes and Chrysler). FCA produces really expensive products. They should cater to low-cost markets too. As 70% of the revenue comes from those markets, as that market is in the majority.
The vision of the Chrysler company is to make trucks and cars that people want to buy. They build cars that people enjoy driving and certainly want to buy again (Mission Statements From the Automotive Industry, n.d.).
The company defines its mission statement as follows (Mission Statements From the Automotive Industry, n.d.):
The philosophy of the Chrysler company is “design with purpose.” Their vision driven mission is that people will buy their product again and again. The company defines its purpose as creating an efficient, exciting, safe, and reliable automobile that a person expects and deserves.
Corporate Values & Culture:
Initially, the culture of Chrysler was not very competitive. When Marchionne became the part of the company, then he insisted Chrysler make changes in the company’s overall structure. The major changes were made in the corporate culture. He made drastic changes in the hierarchy of the company. He fired many veteran executives. He also flattened the bureaucracy. He set up weekly meetings with the staff. In the meetings, problems were discussed. This helped them in improving their vehicle quality, profit margins, and pricing. They still practice these things in the company.
To ensure a competitive corporate environment, Marchionne applied PE fit. This framework makes sure that the skills, competencies, values, abilities, and personalities of the employees match their jobs.
To assess the change in culture, Chrysler used a framework to make managers understand the change in culture. The framework is CVF (competing value framework). According to this framework, there are four different types of cultures. These are the Clan, Adhocracy, Hierarchy, and Market. In the case of Chrysler, its culture lies in all the dimensions as per the changes made by Marchionne. Normally only one dominates. It is Chrysler company, which somehow lies in all these four quadrants.
The x-axis describes that either a company can focus on the external or internal environment. The values of Chrysler company have both internal and external focus. For example, cooperation and innovation lie in different spectrums. The company focuses on the quality of the vehicles, which is an internal focus. On the other hand, Marchionne disseminated executive power to clan culture too. Chrysler talks about innovation and profitability too. This gives the company external positioning. To be more specific, one can say that Chrysler’s focus is more on internal focus.
The y-axis describes flexibility and discretion or stability and control. Marchionne’s leadership style and desire to control prices show control and stability. At the same time, cooperation lies in the opposite quadrant of control and stability. If one gets specific, the culture of the company is control and has an internal focus. It makes it a Hierarchy culture (Scholar, 2014).
Chrysler believes that their cultural values make them distinctive from the rest of the other companies. These are innovation, cooperation, responsibility, passion, leadership, diversification, sustainability, and community.
The company has been awarded several awards based on their acronyms, manner of dress, corporate values, decorations, special parking spaces, and so on. This shows that they have maintained a very competitive corporate culture. Their awards are an indicator that their corporate values have been recognized by many organizations.
Chrysler SWOT Analysis:
The company has been a strong player in the automobile market since 1925. It is now a part of Fiat Chrysler Automobile. It is a trusted brand in the USA and Europe. The company designs, manufactures, distributes, and sells its products in around 70 countries. It is ranked as the 11th largest automobile maker in the world. The swot analysis of Chrysler has been discussed below (Bhasin, 2019):
Chrysler has always made sure to differentiate its products. Chrysler is all about design and suitability, while Fiat is about technology and style. They have made this positioning very clear in the customer’s mind. They have used their brand ambassadors according to their products. They also advertise their products the way that customer gets their message clearly.
Chrysler has made history in the automobile industry for more than ninety years now. They are the market leaders since 1925. The company has automobiles of all types, and they keep on doing innovations according to the market needs and requirements.
The company has positioned its product right in the market. The campaigns like “imported from Detroit” and “born of fire” have made clear to the customers that the brand is associated with quality, style, and technology. The company has very strong positioning in the market.
d). High recalls:
The company has done its marketing right. This is the reason the company has a high brand recall as compared to other companies in the market. It has done its branding right. They have the right branding strategy and promotion strategies.
a). Fleet sales:
The company focuses on fleet sales, and 17% of the revenue comes from fleet sales, which very high in the U.S market. The consumer perceives them as a fleet sales company, which affects their retail market. This, in return, affects their revenues too.
b). Multiple Mergers:
Chrysler had multiple mergers in order to come out of bankruptcy. It was Daimler initially, and it is Fiat now. They have diluted their brand drastically.
c). Product lines:
The company has a lot of products on the market. This all affects their costing. If they do not trim their product lines, then they will face more financial crises in the future. They should focus on a few products instead of opening a range of products.
d). Poor after-sales services:
In most emerging markets, customers buy products based on good resale value and after-sale services. Chrysler lacks here. This is why they are not a popular brand in those markets.
a). Scope for penetration in emerging markets:
The demand for luxury cars is expected to increase by 10% annually. The demand in emerging countries like India and Pakistan is as low as 11%. This is expected to increase. So, there is an opportunity for the company to penetrate the market and get the market share of these economies.
b). Demand for fleet cars:
These days there is a demand for fleet cars. One of the examples is Uber. So, the company can capture this market. This is Chryslers’ specialty too. So, they can serve the market in a better way.
c). Favorable trends:
These days both men and women are working. So, both genders need cars for themselves. So, in the past where there was the use of one car in a household, now there is a requirement of two cars per household. They need small cars for their house too. So, the company can get more demand for small cars because of this new trend.
The company can be affected by new technology like alternate energy vehicles, robot-driven cars, interconnected safety, and traffic systems. The company is already working on a low margin basis. The company cannot afford these expensive technologies. So, it is a very big threat to the company.
There is a huge competition in the market for Chrysler already. Nissan, GM, Toyota, Chevrolet are a few of its big competitors in the market. Competition is always a big threat to companies.
There are many big competitors of Chrysler in the market. The main four products of Chrysler are Chrysler sedans and minivans, Jeeps, Rams, and Dodge. So, its top main competitors are GM, Ford, and Toyota. Fiat, GM, and Ford are known as the big three companies of the automobile. These three companies have their headquarters in the USA (Palmer, 2012). These three companies are distinguished by the size, geography, and business model. Ford held the second position for 56 years. It was overtaken by Toyota in 2007. Toyota sold more products than ford in north America (Bunkley, 2008). GM companies take good care of their employees. They provide health insurance to their employees. They provide retirement packages to their older employees. This is to help improve the profits of the company. Though the big three have a history of marques, they shifted to making fleet cars. They shifted their focus from mid-size to SUVs. They ruled the market until 1999 as afterward, Japanese cars came to the market. Those cars were more fuel-efficient. The big three lost their market share then. The high oil prices and sub-prime mortgage crisis affected the popularity of SUVs and trucks. The big three shifted to small cars to cater to the needs of the market (Van Praet, 2008). Due to bankruptcy, Chrysler merged with Fiat. GM and ford continued to function independently. Toyota is making good profits from all over the world while Chrysler, as being part of Fiat is making good profits too. GM and Ford are performing well but not at the top of the scale now.
The members of the board of directors are as follows. Sergio Marchionne, Steven G. Beahm, Reid Bigland, Bruno Cattorri, Oliver Francois, Ralph Gillies, Mickeal Manley. They are Chairman, Vice president, sales chief and president Canada, director Latin/ Mexico, director brand & marketing, director design and SRT brand, director jeep, and sales international, respectively. The company was the market leader from 1925 to 1998. It became part of Daimler in 1998. Later, Daimler sold its share, and the company was an independent identity again. In 2014 the company merged with Fiat. Fiat has a maximum of its shares now. The board of directors of Fiat is as follows: John Abbott, Andrea Agnelli, Tiberto Brandolini d’Adda, Glenn Earle, Valerie A. Mars, Ronald L. Thompson, Michelangelo A. Volpi, Patience Wheatcroft, Ermenegildo Zegna. Michael Manley is the CEO of Fiat. John Elkann is the chairman of Fiat.
Marchione led the Chrysler really well. Now under a new management company really well. Fiat is distributing and selling Chrysler products in more than 70 countries now.
The company was established in 1925 by Walter. The company was a leader until 1998. In 1998 the company faced many financial crises. The company merged with Daimler to pay off its loans. Later, Daimler sold all its shares, and Chrysler became independent again. The company remained stable for a few years. Later, it became bankrupt again. In 2011, Fiat bought a few of its shares, making it a global company. Later in 2014, the company merged with Fiat. According to the 2019 financial report, the company has achieved strong financial results. The company has also taken steps for its further growth and profitability. The company even coped up with the drastic changes undertaking in the automobile industry. The net revenue of the company was around euro 108.2 billion in 2019 (FCA, 2019). The company sold out around 4.4 million products in 2019. The company achieved EBIT of euro 6.7 billion in 2019, with a margin of around 6.2%. The core businesses of FCA are in North America, where Ram sold the maximum of its products. It became the number 2 brand in the pickup truck segment. They are getting strong financial results from North America from the 5th consecutive year with adjusted EBIT of euro 6.7 billion and a margin of around 9.1%. This shows Chrysler is giving FCA a good business from the past five years. FIAT achieved a net profit of around euro 4.3 billion of profit from continuing operations of euro 2.7 billion. The company overall drove a cash flow of euro 2.1 billion. They distributed a dividend of around 1.1 billion in 2019. The company is performing really well in terms of financials. Chrysler is giving a good amount of business to FIAT.
Chrysler can take the following strategies to strengthen their financial results and penetration in the market.
- Chrysler can take measures to make more eco-friendly cars, as they were already charged heavily for not making eco-friendly cars. This will help in catering to that market. This way, they will be able to penetrate in the market too. This penetration will give strong financial results too.
- Chrysler can target fleet services companies like uber to get more sales. These days Uber is one of the mediums of transportation. People prefer to go on Uber services than on other public transports. There are many other emerging competitors of Uber. So, there is a huge potential in the market. They can target this market to get strong financial results. Fleet cars are their expertise too. They can serve the market in a better way than any other automobile company.
- The company should narrow down its product lines. The company should focus on fleet cars, Ram and jeeps only. These cars give the company maximum revenue. The other product lines are giving the company extra expenses only. The company recently had a merger to pay off its loans. So, the company should focus on its hot cakes only to get maximum revenue.
- Chrysler should try to avoid any other mergers in the future. They should make themselves financially independent enough to avoid any future merger.
- Chrysler should improve its customer sales services. The emerging-market buy imported cars if they get good after-sales services. The company lags behind in this category a lot. They should focus on this to get a good response from the market. There is a huge potential in emerging markets. So, the company should focus on these markets too by improving its services.
- Chrysler should focus on stabilizing its finances first. They need to introduce new technology in their products to stay ahead of the competition. Competitors like Nissan and GM are introducing new technologies to the market, which Chrysler surely can’t afford because of its financials.
- The company should invest more in its plants in order to cater to the North American market more as the maximum of its revenues is coming from the Ram brand. This will create new jobs for the people too.
- The company should focus on strengthening its network. So, they can cater to more markets.
- They should focus on improving the speed and efficiency of cars. This will help in catering to more segments of the market as there are people who totally demand speed and efficiency in their cars.
- They should introduce new models of their most selling products every year. This will help them in staying at the top of the market.
Chrysler can lead the world by following good strategies. The company has a good share of FIAT. Most of its directors and managers are on the board of directors of Fiat. This is a good point for Chrysler. Most of their people are leading Fiat. They can make good profits by structuring good strategies. They can make their company grow by making their people follow those strategies well. They should focus on their strengths more than they should focus on their weaknesses. They should narrow down their product line. They should cut down their costs as much as they can. These are some of the strategies suggested to the company to make the company profitable.
- Bhasin, H. (2019). SWOT analysis of Chrysler.
- Bunkley, N. (2008). G.M. Says Toyota Has Lead in Global Sales Race.
- FCA. (2019). Annaul report 2019.
- Mission Statements From the Automotive Industry. (n.d.). Retrieved from The balance small business.
- Operations Management on the case study of Mercedes and Chrysler. (n.d.).
- Palmer, B. (2012). Why are all the big American car companies based in Michigan?
- Scholar, T. B. (2014). Culture Change at Chrysler Group, LLC: PE Fit and Competing Values Framework.
- Van Praet, N. (2008). CAW Girds For War.