A recent article in the USA Today where Chrysler execs were bragging about their Aspen and Durango Hybrid vehicles available in mid 2008. Mileage of about 20 is mentioned in the USA article with a purchase price of only about $45,000. I put this in perspective with an article in this weeks Forbes magazine where it is predicted that the domestic auto industry will cease to exist within a few years due to incompetence in the executive suites. I originally thought that the Forbes article was a bit extreme but the Chrysler announcement proves me wrong again.

Lets look at Chryslers move. Chrysler brags that their Durango will be about $8,000 cheaper than comparable vehicles from GM at only about $45,000. Considering the millions that were spent on developing these vehicles, it would take at least moderate sales to provide a profit on their investment.

Who will buy one?

Environmentalists won't buy one. At 20 MPG for the hybrid version, it is far too little mileage to satisfy them. A large SUV seems to be the #1 target of environmental wrath.

Working folks won't buy one. At $45,000 there aren't many working people who will plunk down their hard earned cash for a Durango Hybrid when they are having a hard time paying the oil bill or buying another box of Corn Flakes for the kids. I am busy watching the dedicated truck driving working folks around me who swore they wouldn't buy a car turn around at $4.00 gas and buy a Toyota or Nissan high mileage vehicle.

Families might buy a few but at $45,000 there are a lot of choices in vehicles and many of them get better than 20MPG right out of the box without the complexity and probable maintenance of the Durango Hybrid. I don't think that families will buy enough to allow Chrysler to turn a profit on their investment.

Retirees? Maybe, but a lot of them are on a fixed income that doesn't allow for a $45,000 dollar 20MPG anything.

How about the working rich? Now there is the obvious target audience. With money to burn, however, they can buy the Porsche Cayenne and tow their 2 snowmobiles at 140 miles per hour to northern Maine for a day of sledding and they simply don't care what the price of fuel is as long as it is still at the pump.

Chrysler has invested their money in a pig-in-a-poke. Put lipstick on it and it is still a pig.

Cerberus Capital bought Chrysler from Daimler then put Bob Nardelli in charge. Bob made a strong effort at running Home depot into the ground with incompetent management and Cerberus is allowing him the opportunity to do the same at Chrysler. I feel great sympathy for the thousands of employees who will ultimately lose their jobs when Cerberus writes off their investment and sends Bob away with a bonus and a handshake. Of all the big three from Detroit, Chrysler seems to have the least acknowledgement of the new reality of selling cars in this country. Chrysler doesn't have a single vehicle in their lineup that can be said to actually get high mileage. Business as usual isn't going to work. A $45,000, 20 MPG Durango isn't going to save Chrysler. Forbes may be all too right when they predict the end of the domestic industry and flat out incompetence from the management team will be the reason why.

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