Chrysler case study

2. Uniqueness: An Absolute Essential
Presented by:
M.Taimur
Harram

3. OUTLINE:
• Background of CHRYSLER
• The Merger
• New Leadership
• A Distinctive New Car
• The Hemi Engine
• Conclusion

4. Background of CHRYSLER
• Chrysler is an American automobile manufacturer
headquartered in Auburn Hills, Michigan.
• The Chrysler Corporation was founded by Walter Chrysler
in 1925.

5. 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.

6. Contd..
• Both were successful because each was so distinctive,
unusual and unique automobiles at that time.

7. 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

8. Chrysler: The Merger
• In 1998 Chrysler merged with Daimler-Benz to
form Daimler Chrysler AG.

9. 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

10. 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.

11. 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.

12. 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.

13. Contd..
• Actions taken by dieter Zetsche.
1. Cutting 26,000 jobs.
2. Reducing the cost of parts by 15%.
3. Closed six assembly plants.

14. 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

15. • Now what to do!!!!!!1

16. New Chrysler 300 sedan

17. • 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

18. Why so Exciting????
• Incorporation of Benz five speed automatic
transmission
• High-end 300C model
• 340-horsepower
• 5.7-litre Hemi V8 engine

19. 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”

20. 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

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

22. 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

23. 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

24. Thank You!!!!