Chrysler's N.Y. Auto Show Presentation: Thoughts and Concerns

| About: Daimler AG (DDAIF)

I think the most concerning part of Mr. Murphy's presentation was the slide that called for 3% - 4% annualized unit growth between 2007 - 2011. I don't think the total industry is going to grow at that clip. And a company that has consistently been losing share should therefore probably not assume in their turn around plans 3% - 4% annualized unit growth. This is where Ford (NYSE:F) and GM (NYSE:GM) went wrong back in 2000/2001.

I really do like their strategic transformation plans (albeit still lacking a strategic purpose). But a shift from product-centric to customer and brand focus as one of the points on one of the slides points out seems like a good start.

About 65% of Chrysler's volumes and 35% of the company's locations have all three brands (Chrysler/Dodge/Jeep) under one roof (the Alpha program). Last year they spent $102 million to consolidate dealerships. They probably have "another $300 - $400 million to go."

I didn't realize but about 20% of Chrysler's business (not including Daimler) is international.

In 2007, they estimate the average age of a Chrysler/Dodge/Jeep store is 3.3 years (after store resets and facility improvements), whereas the average Ford store is nearly 6 years old, the average GM store is roughly 4 years old, and the average Toyota store is 3.3 years old.

Also, Chrysler estimates that about 51% of their stores are in rural markets, whereas they estimate 50% of Ford's stores are in rural markets, 48% of GM's stores are in rural markets, 20% of Honda's stores are in rural markets, and 29% of Toyota's stores are in rural markets.

And as I mentioned in the Ford note, Dieter Zetsche thinks Chrysler probably has 10% too many nameplates.

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Tagged: , Auto Manufacturers - Major, Germany
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