Switching
its big car ranges from front to rear wheel drive could cost DaimlerChrysler sales
in North America’s snow belt states, Automotive News said.

D-C president and CEO Dieter Zetsche last month said that the 300M, LH and
Concorde and Dodge Intrepid will switch to rear drive and share some drivetrain
parts with the Mercedes-Benz E-Class range from the next model change.


Strategic
Review-


DaimlerChrysler


But Automotive News said that rear drive has less grip in the snow and that
could affect sales.

The newspaper added that some industry analysts and dealers disagree: they
say that rear drive 2004 model year Dodge and Chrysler cars would be more distinctive
in a crowded market segment where front drive is now the norm.

Automotive
News said that DaimlerChrysler has a lot to lose if it makes the wrong decision
because the present front-drive Intrepid, Concorde, 300M and LHS models accounted
for 9.7 percent of group vehicle sales last year though rebates are helping
this year’s results along.

It’s clear the debate will continue a while yet.

Automotive News quoted industry observers as saying that rear-drive would give
the company a selling point against front-drive rivals such as the top-selling
Toyota Camry and Ford’s Taurus though there was some disagreement with
Zetsche’s claim that electronic traction and stability control systems
could give snow adhesion levels comparable to front-drive models.

Merrill Lynch Global Securities analyst John Casesa told Automotive News that
the full-sized front-drive sedan segment is dying fast and that there isn’t
enough room for more than a few players to make money unless the product is
special.

"Even old-generation Mercedes-Benz technology could make (the Intrepid
and Concorde) very competitive," Casesa added.


To view related research reports, please follow the links
below:-

Automotive
Aftermarket in North America to 2004

The
Global Automotive Components Report: 2000 Edition – A strategic review
of markets, players and products (download)