Chrysler Continues to Fade in China
March 19th, 2009 | by admin |
Matthew C. Keegan asked:
Chrysler LLC has been having a tough time of it, especially since the automaker was separated from Daimler and sold to the Cerberus Capital Management, LP folks. Cerberus never has been all that interested in the auto industry, looking to buy Chrysler, make some changes to it, and flip the company.
But that was in Fall 2007, several months before one of the worst downturns in the auto industry was to hit. Little did anyone know that gas prices would surge past $4 a gallon and that America’s appetite for big, beefy vehicles would also take a hit. Chrysler had plenty of the latter, something that has contributed to its worsening bottom line ever since.
Unlike Ford and GM who derive the bulk of their sales from overseas operations, Chrysler relies on the North American market to provide 90% of their sales. The remaining 10% comes mostly from Europe with a small chunk, about 20,000 vehicles a year coming from China. It is that latter market where Chrysler is sales are the most disappointing as the automaker can trace its presence back to China to the late 1970s when they opened a factory under the American Motors Company a decade before Chrysler purchased the company. That factory was tasked with producing Jeep vehicles.
Today, ChinaStakes.com reports just how woeful Chrysler’s operation is in China, suggesting that its star has now dimmed. Philip Murtaugh, who at one time was in charge of GM’s operations in China but was hired away from the automaker fifteen months ago has left the company. In a cost cutting move, several executive positions in China have been eliminated as the automaker plans to conduct most of its Chinese business from its Auburn Hills, Michigan headquarters.
ChinaStakes.com cites Chrysler’s inability with creating a strong partnership with a Chinese automotive make as being one of the important reasons why the company isn’t succeeding in China. Chrysler is still working with Daimler in China while maintaining small partnerships with Chery Automotive and Great Wall Automobile Group. Chrysler and Chery had an agreement in place where Chery would supply a low cost car for the American market, but both companies canceled that deal in the late Fall 2008 period when Chrysler’s financial predicament worsened.
Other efforts to forge partnerships with Chinese companies have failed, likely hastening Murtaugh’s departure. With Chrysler calling the shots on global operations from America, the chances of developing new partnerships seems to be reduced at least for the short term.
Ben
Chrysler LLC has been having a tough time of it, especially since the automaker was separated from Daimler and sold to the Cerberus Capital Management, LP folks. Cerberus never has been all that interested in the auto industry, looking to buy Chrysler, make some changes to it, and flip the company.
But that was in Fall 2007, several months before one of the worst downturns in the auto industry was to hit. Little did anyone know that gas prices would surge past $4 a gallon and that America’s appetite for big, beefy vehicles would also take a hit. Chrysler had plenty of the latter, something that has contributed to its worsening bottom line ever since.
Unlike Ford and GM who derive the bulk of their sales from overseas operations, Chrysler relies on the North American market to provide 90% of their sales. The remaining 10% comes mostly from Europe with a small chunk, about 20,000 vehicles a year coming from China. It is that latter market where Chrysler is sales are the most disappointing as the automaker can trace its presence back to China to the late 1970s when they opened a factory under the American Motors Company a decade before Chrysler purchased the company. That factory was tasked with producing Jeep vehicles.
Today, ChinaStakes.com reports just how woeful Chrysler’s operation is in China, suggesting that its star has now dimmed. Philip Murtaugh, who at one time was in charge of GM’s operations in China but was hired away from the automaker fifteen months ago has left the company. In a cost cutting move, several executive positions in China have been eliminated as the automaker plans to conduct most of its Chinese business from its Auburn Hills, Michigan headquarters.
ChinaStakes.com cites Chrysler’s inability with creating a strong partnership with a Chinese automotive make as being one of the important reasons why the company isn’t succeeding in China. Chrysler is still working with Daimler in China while maintaining small partnerships with Chery Automotive and Great Wall Automobile Group. Chrysler and Chery had an agreement in place where Chery would supply a low cost car for the American market, but both companies canceled that deal in the late Fall 2008 period when Chrysler’s financial predicament worsened.
Other efforts to forge partnerships with Chinese companies have failed, likely hastening Murtaugh’s departure. With Chrysler calling the shots on global operations from America, the chances of developing new partnerships seems to be reduced at least for the short term.
Ben
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