Chrysler Group is roaring back with a new attitude

Article by Christian Andrei, on August 29, 2010

If for the last five months, you haven't heard much from Chrysler Group; rest your doubts since the carmaker is set to boost advertising this quarter and in the next couple of years. Fiat S.p.A., which took control of Chrysler as it emerged from bankruptcy in June, recently unveiled its five-year plan.

CFO Richard Palmer said that the Chrysler Group will spend $100 this year for each new vehicle sold in the United States at retail (excluding fleet), rising to $170 per vehicle next year and $210 in 2011. Joe Phillippi, president of Auto Trends Consulting, made his own calculations from Chrysler's sales forecast and concluded that Chrysler's spending would be placed at $1.4 billion next year.

This marketing plan is well-timed since Chrysler Group vehicle sales dropped 30 percent last month from a year earlier and are down 39 percent this year through October.

CEO Sergio Marchionne reveals one reason -- "The fact that we've been incredibly quiet for the last five months, so the marketing positions of all our brands have been incredibly weak." Having said that, Marchionne warns against being pessimistic, citing his success at turning around Fiat.

He asserted that the company would not reinvest $23 billion if the expectation is not to re-establish these brands.

Nonetheless, the advertising budget may be up but detractors say that too much is dedicated for traditional mass media and that there's a disconnect in the marketing messages for Jeep, Ram and Dodge that the public will find difficult to reconcile.

There's more to Chrysler's plan than meets the eye. In fact, the plan is so voluminous that it was printed on a two-inch thick loose-leaf binder.

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