According to analysts, Chrysler’s sluggishness in launching innovative models when its
Japanese competitors kept coming out with new designs resulted in the company’s declining
sales. Japanese companies continued to offer fuel-efficient vehicles, while Chrysler continued
to produce fuel-guzzling trucks.
Chrysler, which had been the innovator of automatic transmission, power steering, and
brakes, just did not live up to the consumer’s expectations. Although it came up with some innovative
products in the early 1980s, quality-related issues dented the brand image of its cars.
After the merger with Daimler, Chrysler introduced some new models. However, those
models did not get much consumer attention. According to Jim Hall, Managing Director of
2953 Analytics of Birmingham, Michigan, “The truth is Daimler did them no favors. They approved
products that previous Chrysler management wouldn’t have approved if they were
completely drunk and beaten crazy.”52
Even after Cerberus bought a majority stake in Chrysler, the company could not invest
enough money in research and development because of the declining sales of Chrysler’s
vehicles. The U.S. Auto Task Force also commented in March 2009 that “Chrysler’s products
have also historically underperformed in terms of quality, which remains a significant challenge.
Unlike GM, which has had a number of successful recent product introductions and has
developed a new global product development process that has promise, there are few tangible
signs that Chrysler can reverse its share erosion.