Why Fiat S.p.A. Won't Wreck the Dodge Charger

The new 2015 Dodge Charger raised a lot of questions when it was unveiled in New York last month. Fiat and Chrysler have been working to answer them. Photo credit: Fiat Chrysler

When Fiat Chrysler Automobiles (NASDAQOTH: FIATY  ) unveiled the 2015 Dodge Charger last month, a lot of folks wondered if Fiat Chrysler was taking the muscle out of its most famous muscle car.

I was one of those folks. I was at the unveiling of the refreshed Charger in New York, and I was struck by how it almost seemed to be an afterthought at the presentation -- overshadowed by the also-refreshed 2015 Challenger. While the Charger's two-door Challenger sibling received a host of new high-performance options for 2015, the Charger was stuck with just one V8 powertrain -- the 5.7-liter Hemi, backed by an automatic transmission.

It was also stuck with a new front-end design -- one that, as you can see, bears a close family resemblance to Dodge's much more pedestrian Dart compact. I asked if Fiat was taking the muscle out of the Charger. A lot of readers thought I might be on to something.

Since then, we've learned a whole lot more about FCA's plan for the Dodge brand. And it seems pretty clear that FCA isn't just keeping the muscle in the Charger; they're doubling down on the whole idea of high-performance American cars.

The big plan for Dodge: more muscle, not less
Back on May 6, FCA's senior management team spent a full day briefing analysts and media on their plans for the next five years. It's an ambitious plan, even an audacious one, that aims to turn the mish-mashed pieces of Fiat and Chrysler into a single cohesive global automaker.

FCA's plan for the Dodge brand was especially interesting. Dodge is getting out of the minivan-and-mainstream-sedan business -- that will be left to Chrysler from now on -- and reorienting its product line around the idea of high performance. In other words, far from being irrelevant to Dodge's future, Hemi Chargers just became the Dodge brand's flagships.

High-performance cars are fun, of course, but are they really something to build a mass-market brand around? FCA thinks so, and they have a good reason for thinking so: demographics.

An old-school strategy to win young new buyers
It's something we hear again and again from auto-industry executives: Young people just aren't that interested in cars. And that has them worried. It's one reason why automakers like Ford (NYSE: F  ) and Toyota (NYSE: TM  ) have emphasized high-tech "infotainment" systems that integrate smoothly with smartphones -- to increase their products' appeal to tech-savvy young adults.

But Dodge is already in better shape on that front than most. Dodge brand chief Tim Kuniskis says that Dodge's average customer is already nine years younger than Ford's, and eight years younger than Toyota's. 

Why? Check out this slide from Kuniskis's presentation:

Source: Fiat Chrysler

As he sees it (and he surely has a lot of data to back this up), Dodge's demographic advantage isn't about high-tech features, it's about high performance. And now, Dodge is doubling down on high performance in a big effort to build on that demographic advantage and draw more younger Americans to the Dodge brand.

More horsepower is coming to the Charger -- and other Dodges
Want to see the plan? Here it is, in a slide from the presentation that Kuniskis gave back on May 6. It shows the Dodge brand's product plan for the next five years:

Source: Fiat Chrysler

There's one Dodge that doesn't appear in this plan: The Grand Caravan minivan. That will be discontinued in 2016. (It will be replaced by an all-new Chrysler-brand product.) The midsize Avenger has already been discontinued.

Everything else, though, is either a high-performance vehicle, a model that is being reworked with high-performance options, or the handsome Dodge Durango SUV, which doesn't come in an overt high-performance version, but is available with a powerful V8.

And as if to allay our fears about the Charger, Kuniskis revealed that a higher-performance Charger is coming next January -- and that one will have a supercharged Hemi V8.

So will this work?
It might. Unlike some of its other brands, FCA doesn't have big sales-growth targets for Dodge. During the next five years, Dodge is expected to make up for the sales it will lose by losing the Avenger and Caravan -- but not much more. FCA will be content if Dodge's total sales in 2018 are about what they were in 2013.

That seems a reachable goal. During the last several years, Fiat and Chrysler have shown us that they know how to turn so-so products into compelling ones. If they can work that magic with the Dodge brand itself, they might have a winner.

What do you think? Is this a crazy plan or a crazy-like-a-fox plan? Scroll down to leave a comment and share your thoughts.

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Read/Post Comments (8) | Recommend This Article (5)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

  • Report this Comment On May 18, 2014, at 2:09 PM, vet212 wrote:

    Not only will Fiat wreck the Charger, the President has doomed Chrysler to a slew and painful death. Fiat SPA cant help itself it has and can never succeed

  • Report this Comment On May 18, 2014, at 2:59 PM, DomVendetta wrote:

    vet212

    Don't quit your day job as a genius to talk about Mopar.

    You could not be further off than you are. You need to look at how there sales have been trending for quite a while.

    Id worry about GM before Chrysler. smh

  • Report this Comment On May 18, 2014, at 4:35 PM, LouisTewl wrote:

    JR, all I can say is if you ever stop writing 'propatorials' against FCA that do nothing so much as display your provincial brand prejudice, which apparently stems from your childhood, as deeply-rooted and instinctual as it appears to be, I will have to assume you either got a job somewhere else, or you have died.

  • Report this Comment On May 18, 2014, at 8:42 PM, flfordparts wrote:

    news says fiat/Chrysler is moving their head quarters to great Briton.that's their appreciation for the government bail out.lets see if great Briton will bail em out next time .

  • Report this Comment On May 19, 2014, at 1:52 AM, hemicuda wrote:

    Yes, it's a slap in the face to Americans that bailed out Fiat/Chrysler that their Corporate HQ will now be in Great Britain.

    And that new front end on the Charger is terrible.

  • Report this Comment On May 19, 2014, at 6:42 AM, polara6t wrote:

    Understanding before being understood is the problem. The design of the Cherokee and Charger front ends signal they do not understand the true design expressions of either brand and am not optimistic in the least

    The Dodge Charger is aggressive with front end styling that sends a message don't mess and honors its heritage..see Camaro and Mustang. How does this Dart front end do that? Borrow front end styling from the Dart for Charger? Let's see did Chrysler do that in 1965 or with the redesign in 1968? I wonder why not?

    The Jeep at its core is an All American hero. The Jeep front ends are honest,natural and heroic..but where is that with the sloped Alien squint eyed front end of the Cherokee? Think of all apex land predators of the animal world...none save the snake have a face like that..Jeep and Snake? The unintended visual references are so off it is almost funny if it weren't so sad.

    One only needs to visit the forums on the internet dedicated to these proud cars and witness the true disappointment of each brands most passionate fans. But that would be all about understanding rather than being understood.

    Best wishes Fiat..closest to the customer wins...what is stopping you from doing that and check it at the door of truly serving your customer?

  • Report this Comment On May 19, 2014, at 7:31 AM, Bryanbeachboy197 wrote:

    Performance brands can be very profitable (see: BMW's M division, Mercede's AMG, etc) and FCA knows this. Heck, SRT has been very profitable for Fiat/Chrysler. This just renders nearly all the performance into one brand instead of spreading the jam over too much bread.

    As for the talk about moving the HQ to London, get over it! Fiat was the one taking the risk by taking on Chrysler, and they are giving up their Italian HQ. Fiat is the largest employer in Italy, so they weren't going to satisfy anyone where ever they went to. Besides, anyone with an ounce of sense can see that the HQ listing is a taxation issue; the regional offices in Detroit and Turin will probably remain unchanged, and the entire company is listed on the New York Stock Exchange. Instead of getting angry, get smart and do your homework.

  • Report this Comment On May 19, 2014, at 8:38 AM, Mtjeeves wrote:

    To late, they already did. Actually they destroyed the charger name when they re-introduced it as a 4 door.

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