Thursday, March 24, 2011

Chrysler's ad created buzz urgently needed

Monday morning quarterbacks will always dissect the passes, fumbles and touchdowns in Sunday?s Super Bowl game, but the event has generated at least as much hindsight analysis for the 60 or so commercials that spaced out the game ? and few are generating more buzz than a long and cinematically-styled ad that had rap star Eminem pitching for Chrysler.

With rare exception, the initial surveys show the $9 million, non-traditional 2-minute commercial kept Super Bowl viewers in their seats ? and it got them talking about a company that, just months ago many were ready to write off as dead, experts say.

?Even in places where you wouldn?t expect to get a strong positive reaction [to a Detroit brand], like L.A. and Seattle, the reaction was extremely good,? said Art Spinella, director of the Oregon-based research firm CNW Marketing.

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?The negatives on it were so small as to be inconsequential,? he added.

Although the ad focused on the new Chrysler 200 sedan, it didn?t contain the traditional pitch for a new car. Instead, it showed the Detroit rapper Eminem driving through the city of Detroit, seen in both its rawness and its glory, with the facade of a crumbling building and empty abandoned fields as well as the lavish Westin Book-Cadillac hotel and restored Fox Theater.

The spot challenged viewers to reconsider their ideas about Detroit, and with the music from Eminem?s film ?8 Mile? in the background the ad concluded with Eminem joining a gospel choir on stage and delivering a message that ran 11 words in total:

?This is the Motor City, and this is what we do.?

Just two years ago it wasn?t clear if any of Detroit?s ?Big Three? automakers would be doing anything for very much longer, and certainly not Chrysler.

President Barack Obama initially rejected expanding on the temporary rescue approved by his predecessor, George W. Bush, agreeing to offer a new bailout only if Chrysler entered Chapter 11 bankruptcy protection and emerged under the guidance of the Italian automaker, Fiat ? the only automaker that appeared interested in saving the Detroit manufacturer.

Even after Chrysler emerged from court protection in June 2010, its future appeared uncertain. Fiat?s chief executive Sergio Marchionne admitted in a day-long November 2009 briefing for analysts and media that Chrysler?s turnaround would, at best, take a number of years.

Indeed, going into the 2011 model-year conventional wisdom held that Chrysler had little to brag about ? certainly nothing that would justify putting on a commercial four times the length of a normal car ad and during a television event where each second of air time officially costs some $100,000.

But Chrysler has ?delivered some surprises? recently, according to analyst George Peterson of research firm AutoPacific. The automaker has experienced strong demand for the new Jeep Grand Cherokee, which was one of two Chrysler products (the other was the all-new Dodge Durango) to vie for the North American Truck of the Year award, presented at last month?s 2011 Detroit auto show.

The two Chrysler vehicles ultimately lost out to the newly-redesigned Ford Explorer, which took the top honor at the show. Still, last Monday the Jeep was named the only U.S. finalist for the World Car of the Year award, going up against such European powerhouses as Audi (with its new A8) and Mercedes-Benz (with the gull-winged, $250,000 SLS supercar).

Chrysler is also winning praise for the all-new version of the 300 sedan, which will reach showrooms in the coming weeks. The updated car is getting solid reviews, and even the 200 sedan that Eminem was shown driving in Chrysler?s Super Bowl ad has received unexpectedly positive reviews.

Specifically, Chrysler?s new models are receiving rave reviews for the dramatic upgrading of their normally Spartan cabins which, acknowledges interior design director Karl Busse, have traditionally been a sea of ?battleship gray plastic.?

Then there?s the Fiat 500, the microcar Chrysler?s Italian parent is shortly to launch in the U.S. Known in Europe as the ?Cinquecento,? the car will be one of the smallest on U.S. highways and a distinct alternative to the big trucks, SUVs and crossovers Chrysler is best known for.

Last month, Fiat met the first of three criteria the Obama Administration set the carmaker for it to increase its stake in Chrysler in 5 percent increments, from 20 percent to 35 percent. And Marchionne, the Canadian-educated executive who serves as CEO for both carmakers, has expressed plans to pay back $5.8 billion in U.S. and Canadian government loans, which would allow Fiat to land a full 51 percent stake in Chrysler.

Last weekend the Fiat executive had to apologize for labeling the 11 percent interest rate on those government loans as a ?shyster? rate, but he also reversed his previously skeptical approach to fully merging the two car companies, saying, ?Who knows? In the next two or three years we could be looking at one entity.?

Marchionne also hinted that the headquarters for a consolidated Fiat/Chrysler could be based in Detroit rather than Turin, Italy, or split between the two. The executive later backed off the last comment, but observers note that Marchionne has been using Fiat?s expanding U.S. base to press Italian unions ? and possibly the Italian government ? to offer much sought-after concessions.

The dual CEO has plenty of work ahead of him, especially on the U.S. side of the trans-Atlantic alliance. Late last month Marchionne revealed a $652 million loss for all of 2010, although that amount was down from $8 billion in red ink seen the year before. And, significantly, Chrysler posted an operating profit of $198 million for the fourth quarter. The company says it will see a profit for between $200 million and $500 million for all of 2011.

The carmaker?s double-digit January sales increase is a sign it?s moving in the right direction. Indeed, it is struggling to meet demand for the Grand Cherokee, which has seen sales soar 130 percent. After several years of steady declines, Chrysler has now had sales gains for 10 straight months.

Yet there are still some worrisome challenges for the U.S. automaker. A wave of new vehicles, due to start rolling out for 2012, must prove Chrysler and Fiat can work together on global product platforms. Those cars ? and the ?place-holder? offerings of recent months ? must overcome the maker?s reputation for low-quality vehicles.

Chrysler has been the one domestic carmaker ?that hasn?t improved,? complained David Champion, chief auto tester for Consumer Reports magazine, during a presentation several months ago. But looking at some of the maker?s latest offerings, he added, ?They seem to have a different mindset to build a quality vehicle? since hooking up with Fiat.

Whether that mindset will translate into great new products remains to be seen, Champion cautioned.

It also remains to be seen whether American motorists will respond positively to the new vehicles. Even with the recent sales gains, Chrysler is a mere shell of its former self. Indeed, it?s not even on the radar screen for most U.S. car buyers these days, noted Spinella.

But there?s ?a hum? out there and it?s starting to get louder, Spinella added. If Chrysler can continue to deliver unexpected product ? and back that product with more breakthrough advertising ? ?that could turn into a serious buzz,? which in turn could translate into a turnaround this carmaker so desperately needs.

? 2011

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