Despite a good launch for its much-ballyhooed K-cars, the Dodge Aries and Plymouth Reliant, Chrysler Corporation still faces a tough climb back to profitability.
The company has said repeatedly it would move into the black in the fourth quarter of the year. But there are now some estimates that Chrysler could have a loss as large as $300 million, despite an earlier projection by the company of a $257 million profit. Its total loss for the year could hit $1.5 billion or more, at least $1 billion above Chrysler's own estimate a year ago.
If Chrysler expects that K-cars alone to save it, then it may be in deeper trouble than it thinks.
The carmaker has a bunch of other cars to get out the door as well, including some that are "dated" and therefore less competitive on the road.
The company will have to find another 700,000 to 800,000 buyers for its non-K cars, no matter how many Dodge Aries and Plymouth Reliants it manages to sell. To move the rest of the lineup, Chrysler is pressing its dealers to take everything else, including cars the dealers may have a hard time selling.
If a dealer balks -- and some of them do -- he may have his allotment of high-demand K-cars cut.
Despite it all, however, Chrysler has more than red ink going for it in 1981 as it tries to perpetuate its strong reputation for engineering leadership and delivery.
For one thing, the struggling carmaker has signed up a bunch of new dealers, helped in part by the federal government's support of the company to the tune of
It also has the human element, in which some potential buyers choose to go with the underdog.
Also, the company has brought a new engine on stream, its firs in a long time -- a 2.2-liter, 4-cylinder job that is the base engine in the company's new K-car fleet. The engine has a lightweight cast-iron block and aluminum head. Chrysler also offers electronic fuel injection for the first time. Electronic digital instrumentation is used all across the line.
The corporate average fuel economy figure for 1981 is increased to 25.5 miles per gallong, while the federal requirement only calls for 22.
"What that means," asserts Lee A. Iacocca, chairman, "is that Chrysler just went to the head of the class -- a quantum leap from 21.3 m.p.g. to an average of 25.5 m.p.g. in one year."
The front-wheel-drive K-body Dodge Aries and Plymouth Reliant are contributing significantly to the increase.
Despite the successful launch of its new car line, however, the longtime success of the K-car depends, to a large degree, on the carry-through on quality -- something that Chrysler has done a lot of talking about -- and whether or not the cars are seen as competitive with the imports after the introductory fireworks disappear.
Indeed, while the K-car crew -- 2-door sedan, 4-door sedan, and station wagon -- rate a "gold" for a well-thought- out plan, the follow-through -- at least in the car I was given to drive -- falls for short of the Chrysler-set standard and gets only a "bronze."
For one thing, the driver's-side door leaked when it rained, thus spilling water on the unsuspecting driver. The hideaway windshield wipers slapped against the wiper stop in their downward sweep. Also, the inside door handles had sharp edges -- and a burr, or ragged piece of plastic, sat atop the handle on the left-hand door. A sliding-panel door on a small storage compartment, built into the console, is a real nail-breaker. And the new instrument panel is barren of instrumentation. The odometer, in fact, doesn't even have a trip meter -- as it should in a car of this price: $9,200. The base price of the car is several thousand dollars less.
No matter, many buyers of the new K-car say they are very happy with the result and would buy from the company the next time around.
One new owner, George Powell, drove more than a thousand miles, including a trip from Washington, D.C., to New England, without a blip. His car, a Plymouth Reliant with a 4- speed manual transmission, got, according to Mr. Powell, just under 42 miles to a gallon of gas. By contrast, the 2-door Dodge Aries I drove, with automatic transmission, delivered a bare 26 during several days of commuting to work.
In size, the new Aries and Reliants are almost a half ton lighter, and two feet shorter, than the Aspena and Volare which they replace. Still, despite their smaller size, there is a lot of inside room, even if six adults might reach for a shoehorn to get in.
One thing can be said: The new K-cars are American to the core, even though the company tried to latch on to the import mystique. They are US-built for American buyers, and surely that can't be all bad.
But why, a buyer might ask, is the rear-door glass in the 4- doors stationary? General Motors has run into flak over the rigid rear glass in its X-cars. And that glove box! It almost taxes the capacity with two pairs of gloves inside, let alone a few maps.
Still, when the next few months' trial run is over, Chrysler should find the K-car a help in its hoped-for return to future success and profit -- provided it meets the quality goals it has set for itself.