Chrysler cancels 3 AWD models due to low sales

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Shanghai, October 24, 2008: (Gasgoo.com) Due to their low sales in the global markets, Chrysler LLC has announced its cancellation of three all-wheel-drive models (AWD) and it will not supply the AWD editions of the Sebring, Dodge Avenger and Dodge Caliber starting 2009. The three models now sold in China are the FF (front-engine-front-drive) versions, said xinhuanet.com today.

Though all three models were offered with either front- or all-wheel-drive from their inception, the option never resonated with consumers. Jiyan Cadiz, a spokesman for Chrysler LLC, told reporters that only 1.5% of all 2008 Avengers were sold with AWD. The Sebring fared even worse, with 0.7% of 2008 models equipped with the system. So obviously Chrysler has to get rid of them if the company wants to find what's profitable.

Both price and fuel-economy play a major role in affecting customer buying decisions in these segments. The FWD V6 Sebring, for example, is $2,000 cheaper than the AWD model and gets a city/highway EPA fuel-economy rating of 16/26mpg (15-9L/100km) versus 15/24mpg (16-10L/100km) for the AWD model.

While Chrysler feels the system's added cost and reduced fuel economy don't play well in the current climate, folks at BorgWarner, supplier of Chrysler's AWD technology, feel the decision is an easy way out. Chris Cook, a product director at BorgWarner, said that they're seeing global growth in small vehicles with all-wheel-drive, and that Chrysler "is not indicative" of the global market forecast.

The sales of Sebring, Avenger and Caliber have dropped 23.3%, 9% and 7.8% respectively. The low sales of Chrysler's all-wheel-drive series may be reversed if the brand recognition is boosted and prices reduced, but the mark-down will lead to zero profit.

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