Wednesday, October 22, 2008

Chrysler Preparing to Die

Chrysler (owned by the private equity firm Cerberus) is discussing mergers with GM and Nissan-Renault.  The GM merger doesn't make any sense to me, but is apparently the most likely merger scenario.  GM and Chrysler overlap significantly, almost completely.  GM has Hummer, Chrysler has Jeep.  GM's product lineup mostly consists of big crappy cars and trucks, same goes for Chrysler.  Neither company has any credible small cars in the market, both have horrible reputations for vehicle reliability.  At least in a Nissan-Renault merger there would be some areas where it would be mutually beneficial.  Nissan doesn't really have all that much in the way of truck offerings nor a succesfful minivan.  Two areas where Chrysler has actually done well with the Dodge Ram, Chrysler Towne and Country, and the Dodge Caravan. Nissan can provide a platform to Chrysler for the development of a credible economy car (no, the Dodge Caliber does not qualify).  It seems with the GM/Chrysler merger the basic idea is to more or less kill Chrysler and hope that GM is able to capture their old customers.

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