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

It just became one of the keys to Fiat’s plan in America.

May 18, 2014 at 11:11AM


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:

Dodge Passat Quote Slide

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:

Dodge Product Plan

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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4 in 5 Americans Are Ignoring Buffett's Warning

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Jun 12, 2015 at 5:01PM

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