Two major automakers respectively wielded the axe this week. General Motors all but shut down its Russian production and dumped Opel there while FCA admitted, finally, that pretending Lancias were Chryslers in the UK was a Silly Idea, and, given that actual Chrysler Chryslers no longer sell well here, has now decided to all but axe the lot.
If FCA chief Sergio Marchionne would like to Blame Someone, the 1997-2010 UK Labour governments of Tony Blair and Gordon Brown would be a good starting point, as that’s the regime that imposed CO2 emissions-based (and retrospective) ‘road tax’ bands designed to push drivers into cars with smaller engines emitting less ‘greenhouse gas’, thus saving the arctic ice caps and polar bears. I’m all for reducing harmful emissions, and spending less on the UK’s overtaxed petrol or diesel, but when owners discovered the high-CO2 car (anything north of 186g registered after 1 March, 2001) they had bought in good faith before the new charges came in (road tax previously was a flat rate for all) was going to cost them between GBP226 and GBP500 (US$335-$745) a year to keep street-legal, the result was a trade-in no-one wanted and, hence, a huge fall in resale values. And many perfectly serviceable cars went prematurely for recycling due to their high running costs – there was no longer a market for them.
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Chrysler, which had enjoyed some 1990s sales success in Europe with the initially LHD-only Voyager minivans and Jeep Grand Cherokees assembled by Magna Steyr in Graz, Austria (and the two generations of LHD/RHD Neon sedan shipped from the US), boosted sales with the 1997 Voyager redesign by adding RHD and a long wheelbase option to the mix, along with, eventually, a diesel engine option supplied by European maker VM. And then came the PT Cruiser and the 300C, both also offering a passable choice of petrol and, as that was in the DaimlerChrysler era, good Mercedes diesels. All that was just fine until the UK – and various, also CO2-obsessed, western Europe governments – dropped their tax-based bombs. Even with its two-litre I4 engine, the petrol PT was the wrong side of 200 grams. The large I4 and V6 diesel options across the rest of the Chrysler/Dodge/Jeep ranges were also caught in the unexpected tax net.
On top of that, UK fleet buyers, many of which are big household-name companies sensitive to environment-savvy customers’ views, started imposing CO2 emissions-based limits on what their company car drivers could choose and high emitters were off the list. Most Chrysler-Jeep products had high CO2 emissions because the main market, the United States, doesn’t have the same emissions issues – there is more emphasis on other tailpipe pollutants – and overall fleet CO2 emissions over there are being lowered gradually by the overall fleet economy ratings recent administrations have imposed and are tightening in stages.
Eventually, petrol engines were phased out in the UK and most of Europe, various Dodge models were launched and withdrawn. The last Avengers in 2010/2011 were ‘fire saled’ off to car supermarkets (at least one of which offered them ‘two for the price of one’, effectively half retail price which killed resale value) and there was a dearth of suitable new product (eg no PT Cruiser replacement). The lacklustre Caliber hatchback replacement for the once-popular mid-1990s Neon sedan just didn’t take in the high volume C-segment into which it was pitched while few potential buyers noticed the half-hearted 300C launched a few years after the relatively popular original (that original model line boosted by a nice Chrysler branded and specified wagon much more suited to European buyers than the Dodge Magnum variant sold in the US). All Chrysler could do eventually was try that desperate Lancia rebadge but the range was too specialised and too limited (eg no automatics) to compete.
Pulling the plug on Chrysler to refocus UK dealers on all three remaining, newly combined brands makes sense. There is a fine current range of Fiat (the retro-look 500 has done well, the L and X spinoffs are good), Alfa Romeo (I was surprised how nice a Giulieta twin clutch auto I tried a while back was to drive), plus Jeep which is just launching the well-specified Renegade – with Fiat powertrains properly designed to suit Europe – here. It’s ideal for those reinvigorated dealers to target against the likes of Nissan’s Juke, GM Opel/Vauxhall’s Mokka, Honda’s upcoming HR-V et al. The established Cherokee and Grand Cherokee are also specified right for UK/Europe (diesel engines) while a new flagship is coming later to target large SUV segment image leader Range Rover.
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By GlobalDataSad as I am to see Chrysler go (I grew up with and owned Australian-American Valiants in the Antipodes and, as a family man, am a big fan of the Grand Voyager/Town and Country which was the only RHD US minivan you could get here in the UK), the decision is right. I’ll be watching FCA’s European fortunes closely.
Finally, do check out business editor Simon Warburton’s coverage of the Russian Automotive Forum all grouped together here. Bit of background to those production and distributions GM announced this week. Nissan also said it would cut its St Petersburg production for a bit.
Have a nice weekend.
Graeme Roberts, Deputy Editor, just-auto.com
