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Saturday, March 06, 2004

The road to luxury is paved with failure

Chrysler and Dodge dealers are demanding new product. And Chrysler is giving it to them in the form of the 300c and the Magnum. Both are expensive vehicles for their brand names though. I've written on the 300c before, and it is a step up in price to the 300M. It is thoroughly in the luxury sector for a car. The last time Chrysler tried to go luxury was quite recently with the Pacifica, and as the article I linked above shows, Chrysler failed there. Simply put, Chrysler is not a luxury automaker, never has been, and never will be.

What is the price for failure in this area? Ask Volkswagen. Here is a company that only three years ago was Europe's biggest, and most profitable. Now, they have headlines that could easily be confused with the dilemmas of an American manufacturer. Volkswagen's problems are completely due to competing with one of their own divisions, Audi, and not upgrading their core cars, like the Golf. Whenever a car company expands it risks diluting its ability to make a well made car, because the money it spends on research and development is spent elsewhere, then on making a car that doesn't break down. Volkswagen has never made the highest quality cars, but now with absurd vehicles like the Phaeton being made, their problems are magnified.

The moral of the story is, stick to what you know best, and do it well.

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