Chrysler to produce car for 20-something crowd Neon described as zippy, 'huggable'

September 08, 1993|By New York Times News Service

DETROIT -- Zippy, inexpensive, environmentally friendly -- oh, and "huggable."

Such are the qualities, according to the Chrysler Corp., of the Neon, a bubble-shaped, bug-eyed car it introduced yesterday that will test two propositions: that a small car can make money and that Americans in the 20-something age group can be persuaded to buy a car built by the Big Three.

Chrysler has researched those youthful consumers, whom the Big Three fear they have lost -- as they did the Baby Boomers before them -- to the Japanese automakers.

"This generation is often stereotyped as the grunge-dressed teen-agers wearing hightops and ball caps, often backwards," said E. Thomas Pappert, Chrysler's vice president for sales. In fact, he said, the group, which he puts at ages 24-30, is diverse and accounts for about half the 2 million-unit small-car market.

Hence the Neon, which will be available as a four-door in January and a two-door coupe next September. The photographs that accompanied Neon's early marketing blitz, a barometer of the forthcoming advertising campaign, display the car with young people who are being hip -- playing trumpets, scrawling graffiti, recycling.

"These are people who are faced with the knowledge that it's tough to achieve the same life style their parents did," said Robert A. Lutz, Chrysler's president, answering questions by satellite from the annual auto show in Frankfurt. "They're not willing to sacrifice anything, however."

While the base price of the Neon has been rumored to be anywhere from $9,000 to $11,500, Mr. Lutz refused to put a price on the car, saying only that it would be competitive with other American subcompacts like the Ford Escort.

The car, he said, delivers many qualities of larger, more expensive vehicles. For example, Mr. Lutz said, the Neon has 98 percent of the interior room of the Ford Mondeo, a midsize car that Ford recently put on sale in Europe and will introduce in America next year.

The Neon comes with driver- and passenger-side air bags as standard equipment. Its fuel economy -- 28 miles a gallon for city driving and 37 on highways with manual transmission -- is lower than might be expected from a subcompact because Chrysler decided to equip the car with a relatively powerful 2.0-liter engine. The car accelerates from 0 to 60 miles an hour in less than nine seconds.

Mr. Lutz said the car would be 85 to 95 percent recyclable.

Generally, the Big Three have lost money on small cars. "The small car has been essentially a failure in the United States car market," said Arvid F. Jouppi, an auto analyst with Keane Securities. While Japanese automakers were successful selling high-quality subcompacts here, small cars made by the Big Three have never been perceived to be of the same caliber, he said.

"It's going to be interesting to see if Chrysler can carry this one off," Mr. Jouppi added. "I think they will."

The low development costs for the Neon give it a headstart on becoming profitable. Under Chrysler's new platform-team approach, the Neon was developed at the relatively small sum of $1.3 billion (compared with $6 billion for the Mondeo), and in a relatively brief period of 31 months.

While Mr. Lutz promised profits on the car, he was not extravagant in his predictions. "The car is designed to be a little better than break even," he said.

Mr. Lutz said Chrysler planned to sell the Neon worldwide. In America, the car will be carried by both Dodge and Plymouth dealers. Traditionally, automakers market the same car, with different names and some modifications, through different dealers.

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