Why the 2015 Dodge Charger Is Key to Fiat Chrysler's Plan

As Fiat Chrysler's CEO sees it, the Charger sedan is the heart of the Dodge brand. Source: Fiat Chrysler Automobiles.

What does it mean to be a "performance" brand?

That was the question a lot of people asked after the newly merged Fiat Chrysler Automobiles (NASDAQOTH: FIATY  ) announced in May that the 100-year-old Dodge brand would change course. 

But it wasn't the only question.

Why would Dodge give up on minivans, a segment it invented and dominated for years? Why move away from family cars and trucks? And what exactly is a "performance car" anyway?

To find out, I talked to the guy who knows best: Dodge CEO Tim Kuniskis.

A mainstream brand that won't be like the mainstream
"You have 290 different vehicles to choose from in the marketplace, sold by 40 different brands," Kuniskis said. "It's getting very confusing. People are getting numb to all the choices. They're looking for something that's going to be fun, unique, different."

That's where Dodge comes in. 

As Kuniskis sees it, car shoppers are faced with a sea of boring choices. He sees a huge opportunity for Dodge to become the not-boring alternative, the brand that offers "mainstream performance."

That means fire-breathing Hemi V8s, but it also means cars that are fuel-efficient and sensible, even while bringing some of the excitement of their tire-burning siblings.

For the new Dodge, it all starts with the Charger
For Kuniskis, this begins with the Dodge Charger.

The Charger is a full-sized four-door sedan. On paper, it competes with cars such as Toyota's (NYSE: TM  ) Avalon, Ford's (NYSE: F  ) Taurus, and General Motors' (NYSE: GM  ) Chevrolet Impala. 

But in real life, "27% of Charger buyers didn't cross-shop it against anything," Kuniskis said. In other words, they didn't shop around: They wanted a Charger, and that's what they bought.

Why? Because the Charger isn't like an Avalon or an Impala. 

Sure, you can get a Charger with a fuel-efficient V6 engine backed by a high-tech eight-speed transmission, a combination that gets an EPA-rated 19 miles per gallon in the city, 31 highway -- right in the same ballpark as the V6-powered versions of the Impala and Avalon.

Equipped that way, it's a roomy and practical four-door sedan.

But the Charger is also offered with two different Hemi V8s that turn it into a seriously fast high-performance car that also happens to be a roomy and practical four-door sedan.

Toyota and Ford have nothing like it. And even though the V6 Charger looks a lot like an Avalon on paper, its Hemi-powered siblings give it an image, an appeal, that Toyota can't match.

That makes it unique. And it works: The Charger's retail sales growth has far outpaced the overall growth of the full-sized car segment over the last five years. It now outsells both the Avalon and the Taurus by wide margins.

Now Kuniskis wants every Dodge to be the Charger of its segment.

The Challenger is about a lot more than the Hellcat
The "halo effect" that sells all those V6 Chargers is what Kuniskis means when he talks about "mainstream performance." Not every Dodge is going to be an expensive high-performance car. But all Dodges will benefit from the excitement of the brand's high-performance image, he thinks.

Dodge as a brand already does a good job of attracting younger buyers. The average Dodge buyer is 10 years younger than the average Chevy buyer, nine years younger than Ford's, and eight years younger than Toyota's, according to Kuniskis. 

He plans to build on that advantage by using Dodge's standout high-performance models to add excitement to the more practical choices in Dodge's lineup.

Consider the Charger's sibling, the retro-styled two-door Challenger coupe.

Lately, the attention-getter for Dodge has been the new 707-horsepower Hellcat version of the refreshed-for-2015 Challenger. It's a monster, with eye-popping acceleration numbers.

But Kuniskis loves to point to the base-model Challenger, the SXT, which is powered by a 300-horsepower V6. 

It's no Hellcat, but it has its own advantages: The 2015 Challenger SXT has all of the Challenger's sporty looks, along with a comfortable back seat and gas mileage competitive with mainstream sedans, at a starting price of $26,995 -- a combination that CEO Tim Kuniskis hopes will lure buyers looking for something distinctive yet practical. Source: Fiat Chrysler Automobiles.

Noting that the average "pony car" on the road today is 12 years old, Kuniskis said the V6 Challenger with the eight-speed automatic transmission will outperform a 12-year-old V8-powered Ford Mustang or Chevy Camaro -- while getting 30 miles per gallon on the highway. 

And he noted that the Challenger is almost as practical as a mainstream four-door sedan. Sure, it's a two-door, but it's a big two-door, with a back seat that is comfortable for adults. 

As Kuniskis tells it, that makes it an intriguing alternative to something like a Toyota Camry. He thinks more buyers -- particularly younger ones -- will be looking for "fun, unique, different" alternatives to cars like the Camry over the next several years.

How the rest of Dodge will become a "performance" brand
So how does this idea fit with the rest of Dodge's lineup?

In some places, Kuniskis said, it fits just fine. The handsome Durango crossover "is already the Charger of its segment," according to the CEO, thanks to the vehicle's rugged good looks and its available Hemi V8.

Sales of the Dodge Durango crossover were up 16% in the first half of 2014. Source: Fiat Chrysler Automobiles. 

But some Dodges will need work: The compact Dart will get a stylistic makeover and a performance bump when it is refreshed in 2016, he said, while a new compact crossover that reflects Dodge's updated brand values will replace the Journey at about the same time. Both will be available in turbocharged high-performance versions.

And, of course, the rental-darling midsize Avenger sedan is already gone, and the iconic Grand Caravan minivan will be discontinued soon. 

Those decisions make sense when you consider that Dodges are sold in showrooms that also offer Chrysler, Jeep, and Ram vehicles.

Under the new plan, Chrysler will sell the minivans and mainstream sedans, while Jeep has the trail-ready SUVs and Ram offers the pickups and commercial vehicles. 

But it's Dodge, with its roaring Hemi V8s -- and its fuel-efficient smaller engines -- that will draw the buyers looking for something different. 

Kuniskis said he thinks there will be an increasing number of those buyers in the years to come, and he plans to have just what they're looking for.


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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 July 30, 2014, at 9:16 AM, anindakumars wrote:

    The design team at Dodge has done a great job in the last 5-6 years. Its now upto the engineering teams to either keep up or fall by the wayside. From what I know the latter is more likely.

  • Report this Comment On July 30, 2014, at 9:58 AM, Robertwaynewood wrote:

    A 2002 Z/28 would totally waste a V6 Challenger. Just say no to drugs

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