General Motors is aiming to introduce the plug-in electric car by the end of 2010. Showing up in car shows and advertisements, the Volt has already given GM's Hummer-haunted image a big green boost. ... ...
It's the kind of product placement automakers used to dream about: Angelina Jolie hanging from the hood of a roaring red Dodge Viper sports car and blasting bullets in this summer's Hollywood blockbuster wanted.
But something has happened to Chrysler LLC's 600-horsepower Viper in an era of US$4-a-gallon gasoline. The company has decided it is expendable. And if it goes, the days of mass-market auto manufacturers using raw-power, super-sports cars to generate buzz may disappear with it.
Chrysler announced yesterday it has been approached by "third parties" interested in "exploring future possibilities" for the Viper. The company said it hired Lazard Ltd. as its financial advisor as it weighs whether to sell or keep the sports car business.
The Viper is a hand-built, high-end racer with an 8.4-litre, V-10 engine. First rolled out in dealerships in 1992, it is the automaker's most expensive vehicle, selling in Canada for $96,100 and up.
Analysts consider it a so-called "halo" vehicle for Chrysler, much like General Motors Corp.'s Chevrolet Corvette or Porsche AG's 911. The car has graced the covers of dozens of business and auto-buff magazines, giving Chrysler the kind of exposure worth millions in advertising dollars and helping to showcase its engineering.
But as an aspirational car aiming to pull people into showrooms and draw attention to Chrysler's other vehicles, it is failing, said George Peterson, president of AutoPacific Consulting Inc. in Tustin, Calif.
"Frankly, the Viper is not a high-technology platform. It's kind of a brute-force, hard-core sports car," Mr. Peterson said. "The strongest halo vehicle out there right now is the Toyota Prius. That's the vehicle that's brought more people into a dealership than any other."
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Buyer interest in fuel-saving technology like that offered in the Prius has soared since a sudden spike in petroleum prices in March. Keying in on this trend, GM is featuring the Volt, its plug-in electric car, in TV advertising despite the fact the vehicle is two years from production.
Of the five halo vehicles that have drawn the most U. S. dealership traffic this year, three are hybrids, according to AutoPacific's research. Chrysler's new Challenger muscle car, built in Brampton, Ont., is also in the top five.
Viper is a low-volume vehicle that is not crucial for Chrysler as it aims to reverse a 23% drop in U.S. vehicle sales this year and fix its business in a weakening retail environment, said Tom Libby, an analyst at J. D. Power & Associates. "During these times, Chrysler has to become as efficient as possible."
Potential buyers for Viper could include custom-made sports-car builders such as Panoz Auto Development Co. or a private investor interested in auto racing, said Jim Gillette, an analyst at CSM Worldwide. "Some of these very wealthy individuals might look at this as a huge opportunity to pick up kind of a hobby business," he said. "Certainly there's a cachet involved with this vehicle."
The brand could fetch about US$100-million, CSM analysts estimated.
Chrysler, GM and Ford Motor Co. are scrambling to tilt their product lineups toward smaller and more fuel-efficient vehicles and shore up cash to weather a U. S. sales downturn expected to be the worst in a decade. Chrysler had US$11.7-billion in cash and marketable securities at the end of June. Chrysler sold 682 Vipers in the United States through July, more than double the number it sold over the first seven months of 2007. GM sold 16,824 Corvettes over the same time, 3,311 fewer than last year. The company is shopping its Hummer brand to potential buyers.
source:financialpost
