What?! Chrysler may sell Viper

[Q]

http://www.usatoday.com/money/...2008-08-27-viper_N.htm

DETROIT ? Chrysler is looking at selling its Dodge Viper business after some third parties approached the company looking to take on the low-volume, high-performance sports car brand.

A sale of the Viper would allow Chrysler to focus more on its key products and less on what the auto industry calls "halo" cars ? models that are stylish and fast and show enthusiasts that the carmaker has what it takes to make a high-powered vehicle.

The Viper, driven by celebrities such as Hulk Hogan and NASCAR driver Kurt Busch, has had total sales of about 25,000 from its introduction in 1992 though March this year. In 2007, Dodge sold just 435 of the $88,000-plus two-seaters that are powered by a 600-horsepower V-10 engine.

Chrysler says it would offer financial and operational support during an ownership handoff, "in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle," said Chrysler CEO Bob Nardelli.

"Viper is an integral part of this company's heritage," he said.

In the past few years, the Big Three automakers have shed non-core businesses to focus on their basic, high-volume brands. General Motors sold off controlling interest in financial arm GMAC, divested stakes in Isuzu and Fiat and has said it is looking for a buyer for its Hummer brand.

When GM hit a rough financial patch in 2004, rumors swirled that it was looking to sell off Corvette, but the sports car remains in the GM portfolio.

Ford sold its Jaguar and Land Rover operations this spring to Indian conglomerate Tata Sons for a net price of about $1.5 billion and earlier sold Aston Martin for just shy of $1 billion.

Viper won't bring in nearly as much as Aston Martin, says Kevin Tynan, an analyst at Argus Research. He estimates it could go for $140 million to $150 million.

Selling Viper could be a sign that Chrysler is in trouble, he says. "It's a shame to see it go, and it probably could be interpreted as a sign of desperation, only because it's not a whole lot ? coming from that kind of sale."

The Viper brand is valuable to Chrysler because it gives people a reason to go into the showroom. Tynan says he remembers going with his father in 1992 to see the car when the first model hit showrooms. People were lined up outside the store to see it. And it's become a rival to the Chevrolet Corvette in horsepower and in image power.

"It's usually been better than Corvette in the horsepower wars," Tynan said. "If nothing else, it's given them that halo product that competes with GM's halo product head-to-head."

 

[Arkaign]

That's a million times better than just killing it off, provided someone gets it that 'gets it'. The last thing anyone would want to see is 300hp V6/V8 Vipers.

Viper is a V10, 8L+, 500-600HP+, no performance compromises.

This will be fascinating to follow. If things weren't so bad for the Big 3, Ford would come to mind, as with no Ford GT, they have no 'halo' sports car.

 

[ElFenix]

i'm trying to figure out what an $88,000 axe murderer of a car has to do with minivan sales.

 

[ponyo]

Chrysler is toast. I heard they were going to discontinue the Viper anyways after this current gen. I want to eventually get one. Once the Viper is discontinued, prices are going to go up like the NSX.

 

[zerocool84]

Originally posted by: ElFenix
i'm trying to figure out what an $88,000 axe murderer of a car has to do with minivan sales.

When you spend time and money that could go to cars that actually bring in larger volume of sales.

 

[Bignate603]

Makes sense, it shares almost no parts with any other vehicle in their lineup so there is no economy of scale. If they're only selling 400 something a year it's very doubtful they are coming anywhere near their development costs so its a money pit to the company. They may make more than it costs to assemble the car for each one that goes out the door but I doubt they every pay back the investment to design each generation. Its assembly facility only does vipers and they are all handbuilt. It's just very easy to split it off because it shares so little with their other vehicles. It probably means that they haven't put money into a next generation though so the new owner will have to scramble to try and make a vehicle to compete with the corvette.

It's surprising though that they can actually sell off just a single car rather than a brand. It will be interesting to see how it turns out.

 

[The Boston Dangler]

what kind of shitty writing is this? the article refers to the viper and corvette as brands, and draws comparison to the sale of other brands. anyone that knows anything knows "viper" and "corvette" are models of their respective brands. the "rumored" sale of the corvette model is complete bullshit - 1. gm will not ditch one of the most positive things in it's history, and 2. despite low volume sales, there is a huge margin on the car in any form.

as for the sell-off of the viper car, i don't like it, although anything is possible with poor dodge sales, and furious stockholders back in germany. every major manufacturer wants a car that will produce the halo effect. i'd like to see them out-source the manufacturing, like ford does with the gt and gm partially does with the z06.

if it is sold off, it will be picked up by some russian kid trillionaire, a la tvr, and suffer the same fate.

 

[JulesMaximus]

Chrysler is hemorrhaging money...just like GM and Ford. This doesn't surprise me in the least.

Guess all those years of manufacturing cars that they made people think they wanted or needed is finally biting them in the ass.

 

[radioouman]

This would really be sad and would continue to trash Chrysler's image. I almost wish that Toyota would get rid of the Scion name and replace it with Plymouth just to rub it in.