Chrysler 200 Gets Safety Award, But Will it Sell?

Investing

Published: August 13, 2014 6:33 am

Last Updated: August 13, 2014 6:50 am

Chrysler’s 2015 model 200 was named a 2014 Top Safety Pick Plus by the Insurance Institute for Highway Safety. The award may not help flagging sales of the model. Through July, sales of the 200 dropped 36% to 53,337, while overall sales of the company’s parent, Chrysler Group, for the first seven months of 2014 rose 13% to 1,187, 790.

Chrysler promotes the 2015 version of the 200 as “all new, from the ground up.” It will enter the heavily crowded market of low-priced, high gas mileage sedans. The base price of the model is $21,700. Its maximum gas mileage is rated at 36 MPG. The 200 bristles with safety technology, including collision warning, adaptive cruise-control, and a parking assist feature. Unfortunately for Chrysler, these features are also available throughout most of the industry.

The 200 has been orphaned among the cars and light trucks sold by the Chrysler Group. These include the Chrysler, Jeep, Dodge, and RAM brands. Sales of the Chrysler brand have dropped so far in 2014, dipping by 10% to 164,523. Sales of Jeeps and RAM pickups have offset this. As a matter of fact, the RAM pickup has been the fourth best selling vehicle in America through the first seven months of the year, and its sales were up 18.8% to 239,481. That growth rate is better than those of rivals, Ford Motor Company’s (NYSE: F) F-150 and General Motors Company’s (NYSE: GM) Chevy Silverado.

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The largest single hurdle for the 200 is highly successful competition from the likes of the Toyota Motor Corp. (NYSE: TM) Camry, Honda Motor Co Ltd (NYSE: HMC) Accord, and Nissan Altima. Each is among the top 20 selling cars in the United States over the first seven months of 2014.

Chrysler also faced a brand quality problem. It fell well below the industry average for problems per 100 vehicles in the J.D. Power 2014 Vehicle Dependability Study. The Honda and Toyota scores, on the other hand, were well above average.

The Chrysler brand is its parent’s greatest trouble spot. Sales of the other car in the line, the 300, have also been poor. A safety award will not change Chrysler’s status. Nothing may. The competition have too large a lead, and there is no evidence they are giving that up.

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