New Chrysler 300 sales struggling

Has Chrysler miscued the launch of the second-generation 300 sedan or is it the victim of declining buyer interest in the large passenger car segment?

Those are the questions Fiat Chrysler Group Australia is grappling with two months after the launch of new 300, which arrived with a wider model range and lower pricing than its predecessor in 2005.

Despite that, the traditional three-box rear-wheel drive saloon isn’t hitting FCGA’s sales target of 250 per month for the car. Instead, it is running at about 200 sales per month.

FCGA managing director Clyde Campbell admitted Chrysler dealers had fired criticism at the company for its launch advertising.

“They have said ‘you haven’t put the price on television, you haven’t put the price in the paper. People don’t know that car can be in their driveway for $45,000. They think it is $60,000-$65,000’.”

However, FCGA intentionally advertised the car without pricing, launching only with brand advertising in an attempt to move from the first-generation 300C’s ‘gangster’ image.

“We deliberately wanted to create as different perception about that car - the last one was notorious,” Mr Campbell said. “I think the gangster thing appeals to a demographic but not enough to be a volume player.

“Peak volume for the old car was 1800 units (per annum) and we want to do significantly better than that.”

Mr Campbell said the next step was to put a more emotional advertising case for the car and ensure dealers started communicating the pricing.

“If I don’t start seeing the metrics (improve) then, I’ll be worried. By the end of the year we will know whether we have a big task to get where we want to be and then we have to look at pushing dealers and changing pricing, and we don’t really want to go down that path.”

One encouragement for FCGA is that the 300 is selling at roughly the same rate as the current Jeep Grand Cherokee when it launched. That has become a smash hit, with sales up 190 per cent year-on-year.

But Mr Campbell also revealed that Grand Cherokee was cannibalising 300 sales, which also underlines the sales trend in Australia towards SUVs and away from traditional large passenger cars.

So far this year the new vehicle market is up 9.4 per cent and large SUV sales are up 26.3 per cent. But large passenger car sales are down 23.5 per cent. The mainstays of the segment, the locally built Holden Commodore and Ford Falcon, are both down 27 per cent this year.

“It’s no coincidence that since we launched 300, Grand Cherokee sales have jumped another 200 sales per month. So it’s driving traffic… So that’s the worry, is it a seachange? Are people saying, for basically the same price and the same dimensions, they want to sit up a bit more?”

The 300 will be the cornerstone of the local Chrysler range until 2014, when the new-generation 200 mid-size sedan arrives. For now, the only other model in the line-up is the Chrysler Grand Voyager diesel.

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