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International News Title: Chrysler, Near Death, Readies for a Savior There hasn't been much good news out of Auburn Hills lately. Shakeups at Chrysler Financial, ending leasing, deep discounts on cars and trucks and talks of sales or mergers have grabbed headlines, and most analysts agree Chrysler's days as an independent automaker are numbered. "I can't see how they could continue for more than a year and a half or two years," Global Insight analyst Aaron Bragman tells Wired.com. According to Bragman, Chrysler doesn't have the reserves, sales volume and international presence to compete in the current climate and so may begin "moving away from manufacturing their own cars." Such predictions may be coming closer to reality. The Wall Street Journal reports Chrysler and Nissan are talking about working together on a mid-size car in hopes of boosting a segment where Chrysler's Dodge Avenger and Chrysler Sebring have been outsold by the class-leading Camry and Accord almost 7-to-1. Clues that Chrysler is preparing for a sale or a merger have been a long time coming. First of all, Bragman says, the company's taken the unusual step of announcing operating profits and cash on hand. Such an announcement is not required for a private company but may be used to court a potential buyer or partner. Chrysler is saying they aren't for sale, but "that's what they'd be expected to say," Bragman tells us. "As soon as there are sale talks, customers would start to abandon Chrysler in droves." Another problem for Chrysler is dealers can no longer offer leases through Chrysler Financial. Instead of leases, Chrysler Financial is now offering massive discounts (as much as 40 percent on the Dodge Ram) and loan terms that should be measured in dog years. Chrysler says a customer who would be interested in a lease can now own a car for a lower monthly payment after 72 months. Of course, after the wild success of nontraditional mortgages, what buyer wouldn't be tempted to spend six years making payments on a rapidly depreciating asset? Most buyers are getting sick of their cars after 39 months and aren't interested in a six-year loan, Bragman said, so dealers are worried about the impact of ending leasing. Accordingly, Global Insight is forecasting a drop in sales volume. As if these woes aren't enough, Chrysler is simply selling products few people want in the greener, more efficient automotive market. Roughly 75 percent of Chrysler's sales are large trucks and SUVs, a market that hasn't been easy for any manufacturer. The $2.99 a gallon "Let's Refuel America" gas promotion was largely a flop, says Bragman, and perhaps the only bright spot in Chrysler's future is minivan sales may rebound as consumers begin trading in their gas-guzzling SUVs for the Grand Caravans that are Chrysler's bread and butter. While Cerberus might be hoping to unload Chrysler faster than dealers are moving Sebrings (one a month!) the Journal's Heidi Moore speculates that a savvy buyer will wait for a Hemi-size discount.
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