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08-28-2008, 05:52 AM
Chrysler in talks over Viper sale to raise cash
By Bernard Simon in Toronto
Published: August 27 2008 19:07 | Last updated: August 27 2008 19:07
Chrysler is in talks to sell its Dodge Viper sports car business after being approached by prospective buyers.
The Viper, a ten-cylinder, 600 horsepower muscle car that can reach 60 miles an hour in under four seconds, makes up a fraction of the troubled Detroit carmaker’s sales.
But a redesigned 2008 model has led to sales more than doubling to 682 units in the first seven months of this year, in spite of most Americans’ stampede to smaller, more fuel-efficient vehicles.
Chrysler declined on Wednesday to identify the potential buyers.
It has retained Lazard as advisers.
Bob Nardelli, chief executive, said that “our intent would be to offer strong operational and financial support during any potential transaction, in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle”.
Chrysler has spun off several assets over the past year as part of a drive to streamline operations and raise cash in the face of a steep decline in sales of its mainstream models.
Its total January-July sales were 23 per cent lower than a year earlier, including a 29 per cent plunge in July.
Assets sold include an engine factory in Brazil, bought by Fiat, a design centre in California and an office complex and an engineering centre in Michigan.
Another seven properties are on the market.
Chrysler has also formed partnerships with Nissan of Japan and China’s Chery Automobile to build small cars, a big gap in its product range.
It has held joint-venture talks with numerous other carmakers.
The Viper was introduced in 1992. It is built at a plant in Detroit that employs about 115 people.
Unlike many European sports cars such as Ferrari and Aston Martin, the Viper is prized for its speed and loudness rather than its luxury.
“When a car costs $85,000, its interior should reflect $85,000,” the Detroit News said in a review of the latest model.
Chrysler is widely seen as the most vulnerable of the three Detroit carmakers because of its heavy reliance on the North American market.
It has also been slow in moving away from gas-guzzling pick-up trucks and 4x4 vehicles.
Aggressive cost-cutting has helped conserve cash, but Fitch Ratings warned recently that “Chrysler’s pipeline over the near term is relatively modest, and the company’s product line-up will lag [behind] the industry’s shift to smaller, fuel efficient vehicles”.
The company is launching several more Dodge models, notably a new version of the Ram pick-up, its top-selling vehicle.
Copyright The Financial Times Limited 2008
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2008.
By Bernard Simon in Toronto
Published: August 27 2008 19:07 | Last updated: August 27 2008 19:07
Chrysler is in talks to sell its Dodge Viper sports car business after being approached by prospective buyers.
The Viper, a ten-cylinder, 600 horsepower muscle car that can reach 60 miles an hour in under four seconds, makes up a fraction of the troubled Detroit carmaker’s sales.
But a redesigned 2008 model has led to sales more than doubling to 682 units in the first seven months of this year, in spite of most Americans’ stampede to smaller, more fuel-efficient vehicles.
Chrysler declined on Wednesday to identify the potential buyers.
It has retained Lazard as advisers.
Bob Nardelli, chief executive, said that “our intent would be to offer strong operational and financial support during any potential transaction, in order to ensure a future for the Viper business and perpetuate the legacy of this great vehicle”.
Chrysler has spun off several assets over the past year as part of a drive to streamline operations and raise cash in the face of a steep decline in sales of its mainstream models.
Its total January-July sales were 23 per cent lower than a year earlier, including a 29 per cent plunge in July.
Assets sold include an engine factory in Brazil, bought by Fiat, a design centre in California and an office complex and an engineering centre in Michigan.
Another seven properties are on the market.
Chrysler has also formed partnerships with Nissan of Japan and China’s Chery Automobile to build small cars, a big gap in its product range.
It has held joint-venture talks with numerous other carmakers.
The Viper was introduced in 1992. It is built at a plant in Detroit that employs about 115 people.
Unlike many European sports cars such as Ferrari and Aston Martin, the Viper is prized for its speed and loudness rather than its luxury.
“When a car costs $85,000, its interior should reflect $85,000,” the Detroit News said in a review of the latest model.
Chrysler is widely seen as the most vulnerable of the three Detroit carmakers because of its heavy reliance on the North American market.
It has also been slow in moving away from gas-guzzling pick-up trucks and 4x4 vehicles.
Aggressive cost-cutting has helped conserve cash, but Fitch Ratings warned recently that “Chrysler’s pipeline over the near term is relatively modest, and the company’s product line-up will lag [behind] the industry’s shift to smaller, fuel efficient vehicles”.
The company is launching several more Dodge models, notably a new version of the Ram pick-up, its top-selling vehicle.
Copyright The Financial Times Limited 2008
"FT" and "Financial Times" are trademarks of the Financial Times. Privacy policy | Terms
© Copyright The Financial Times Ltd 2008.