Uniqueness: An Absolute Essential

Presented by:

M.Taimur

Harram

OUTLINE:

• Background of CHRYSLER• The Merger• New Leadership• A Distinctive New Car• The Hemi Engine• Conclusion

Background of CHRYSLER

• Chrysler is an American automobile manufacturer headquartered in Auburn Hills, Michigan.

• The Chrysler Corporation was founded by Walter Chrysler in 1925.

CHRYSLER: Causes of Success • In 1996,chrysler was clearly at the top of its game.• It invented the minivans and grand Cherokee which were

an instant success.

Contd..• Both were successful because each was so distinctive,

unusual and unique automobiles at that time.

Successful Products of Chrysler

• During that period,Chryler was riding on success of stylish products. They were unique looking family sedans.

1) Dodge Intrepid

2) Chrysler Concorde

3) Eagle Vision

Chrysler: The Merger

• In 1998 Chrysler merged with Daimler-Benz to form Daimler Chrysler AG.

Contd..

Chrysler Daimler-Benz

Moderate priced cars & light trucks

Mercedes luxury cars & heavy trucks

Strong in North America & Weak in western Europe

Strong in western Europe & weak in north America

Good at design & product development

Good at engineering and technology

Chrysler: Crisis• After the merger, next three years (1999 onward) was

very tough for Chrysler.• Demand for Chrysler’s high margin minivans & SUV’s was

cooling off, because the competition was catching up & Chrysler was standing still. Losing its momentum in developing distinctive cars.

Chrysler: Causes of crisis

• According to former Chrysler executives, The main cause of crisis was that “We hired too many people, at the same time, The company was making financial forecast that really had no basis in fact”

• Passing up the opportunities for economies of scale by allowing each of the different car units to line up its own component supplier.

Chrysler: New Leadership

• Dieter Zetsche took over as CEO of Chrysler in 2000.

• He found lots of complicated financial projections but no thorough analysis of company’s strength and weaknesses.

Contd..

• Actions taken by dieter Zetsche.

1. Cutting 26,000 jobs.

2. Reducing the cost of parts by 15%.

3. Closed six assembly plants.

Consequences

• During 2003, market share declined to 13%• Company lost its 53 year position as

America’s number three car maker • Operating losses of $685 billion

• Now what to do!!!!!!1

New Chrysler 300 sedan

• Won enormous number of awards• “Motor Trend’s Car of the Year”• “It makes the majority of vehicles on the road look like blobs” noted in Business Week

Why so Exciting????

• Incorporation of Benz five speed automatic transmission

• High-end 300C model• 340-horsepower• 5.7-litre Hemi V8 engine

Hemi Engine

• Added $10,000 to price of Chrysler 300

• Surprisingly………• Efficient during Highway driving• Cylinder Deactivation(25 miles/gallon)

• Dieter Zetsche acknowledge “One of the building block of the turnaround of this company”

Success with 2004• Dodge Magnum sports wagon• Dodge caravan• Chrysler Town minivans• Operating profit of $1.9 billion as compared

with loss of $685 million for 2003

• GM and Ford got serious trouble• S & P rated them as JUNK• Many of their suppliers got bankrupt

Results

• Dieter Zetsche became CEO of Daimler-Chrysler• Unfortunately, Chrysler did not adjust production accordingly with no unique new models

• Fall in 2006• Again experienced $1.5 billion quarterly loss

Conclusion

• Chrysler has been on roller coaster for last 20 years

• Whenever they got success,

Get sloppy with its production

Hires too many people

Shut down the innovation

Thank You!!!!