Chrysler says LH doesn’t stand for anything, but Detroit wags claim that it’s short for “last hope.” Chrysler hasn’t offered a totally new car since its K cars, including the Dodge Aries, came out in 1981. The success of the LH–to be sold as the Dodge Intrepid, Eagle Vision and Chrysler Concorde–could determine whether Chrysler survives. If they sell, the company can rebuild its market share-and maintain its independence. If they’re a dud, Chrysler as it now exists could be history: it may not have the cash to develop a replacement. No wonder Chrysler is mounting an unprecedented marketing campaign. “The LH is an absolutely critical product for Chrysler,” says John Casesa of the brokerage house Wertheim Schroder Inc.
The LH is aimed at an audience Chrysler has been missing: buyers who can afford to shell out $17,000 to $23,000 for a big sedan. While its Jeeps and minivans are hot sellers, Chrysler has become a marginal player in the U.S. car market. Last year it account. ed for only one of every 12 cars sold, down from one in nine five years earlier. Most of those are small; upper-income 30- to 50-year-olds with families have long since moved to flashier models like the Honda Accord and the Toyota Camry–and see no reason to return.
The LH, which went from concept to production in only three and a half years, is meant to entice those baby boomers to come back to Chrysler. “We did more research on the LHs than on any product we’ve launched in history,” says John Damoose, vice president of marketing. The findings were sobering: the reputation of Detroit’s Big Three is such that even a high-quality rating won’t entice Accord and Camry owners to test-drive their cars. That’s why Chrysler’s last ad campaign featured chairman Lee Iacocca showing off Chrysler’s new $1 billion technology center and talking about slashing product-development time and streamlining the corporation. If consumers believe that Chrysler Corp. itself has changed in fundamental ways, the research shows, they’ll be more receptive to the upcoming $70 million ad blitz touting the cars.
The marketing plan goes well beyond ads. Chrysler Corp. will offer three-day test drives to thousands of local “thought leaders”–prominent individuals who fit the profile of potential LH buyers-in hopes that neighbors will be watching. Dealers received $25 million worth of training in treating customers well, the way import dealers do. And Chrysler has rolled out the red carpet for the news media, too, letting reporters test-drive prototypes much earlier than it normally would. The first returns are promising: car-buff publications like Auto Week and Motor Trend have praised the LH with words like “Hallelujah!” and “world-class.”
The innovative design, with the front wheels and passenger compartment moved forward to increase interior space, is likely to prove popular. But the LH may not do much for Chrysler’s bottom line before 1994. The Bramalea assembly plant, near Toronto, will build only 50,000 of the cars by the end of this year and only about 200,000 in 1993. The reason for the slow start: the company wants to make sure it has time to iron out any bugs in the car. Highly regarded auto analyst Maryann Keller of Furman Selz likes the carmaker’s cautious approach: “If Chrysler can make everyone who buys the first 18,000 cars love it and tell their neighbors about it, they’re going to sell a lot of cars,” she says.
Maintaining quality while building up production at Bramalea to 960 cars a day is Chrysler’s biggest worry: the six-year-old plant has never operated on two shifts. And if the LH proves popular, Chrysler won’t be able to turn out as many cars as the market will want until 1994, when it could add a third shift at Bramalea or a second plant elsewhere. That leaves competitors two full years to come up with some innovations of their own. No problem: fortune, which had a hand in Chrysler’s survival in the early 1980s, is smiling upon Iacocca and his successor, Robert Eaton, once again. General Motors, Ford and Toyota have all introduced restyled family-size cars in the past two years; Honda, which is redesigning its top-selling Accord, is the only major competitor that will bring one out before 1995. In short, LH will be the car story for the next two years. Iacocca couldn’t have written the script much better himself.
