...in today's New York Times:
When a One-of-a-Kind Car Looks So Last Year
By MICHELINE MAYNARD
Published: December 14, 2003
CHRYSLER had no idea that the PT Cruiser would be such a hit when it went on sale in the spring of 2000.
Or that its buzz would evaporate three years later.
Sales of the PT Cruiser, once the most sought-after car on the market, dropped 25 percent this year, despite a new turbocharged version that has been praised by reviewers. Three years ago, buyers were willing to pay as much as $10,000 over the PT's sticker price, but Chrysler is now offering interest-free loans and $2,000 rebates, so that a bare-bones version costs only $16,000. There are even special deals for employees, who initially did not receive company discounts on the PT because it was so red-hot.
What happened? Industry analysts say the fate of the PT Cruiser mirrors that of other halo cars - the industry term for unique vehicles that are meant to cast a favorable light on a company's lineup, drawing customers into showrooms.
The PT's experience echoes that of Volkswagen's New Beetle, which arrived on the market two years earlier, in 1998, to even more acclaim. Interest in the car fell after VW failed to offer new versions to keep the excitement going.
More recently, the new version of the Ford Thunderbird, which Ford Motor hoped would get the kind of buzz that greeted the Beetle and the PT, fizzled almost upon its introduction in August 2001, because of production delays and problems with quality.
These days, with so many new cars, trucks, minivans and sport utility vehicles arriving in showrooms, companies cannot expect to get much mileage out of halo cars, said Karl Brauer, editor in chief of Edmunds.com, a Web site based in Santa Monica, Calif., that offers car-buying advice.
"Once you slip out of the limelight, it's hard to get back there," Mr. Brauer said.
But back in 2000, the limelight shone on the PT Cruiser like George Hamilton's sunlamp. The retro-looking PT, with its sloping hood, zippy handling and roomy interior, seemed the latest hit for Chrysler, which had had a series of hot-selling cars in the 1990's, including the Dodge Viper and the Plymouth Prowler.
Chrysler dealers instantly sold out of the PT, which had the features of a minivan and the chassis of a compact car and brought to mind a Ford hot rod of the 1930's. At some dealerships, waiting lists were as long as a year. Car shoppers traveled across the country to find PT's, many paying thousands above the $17,000 starting price.
Those days are long gone. Dealers had a 136-day supply of PT's at the end of November, more than double the number of cars they prefer to have on hand at this time of year, according to the Autodata Corporation, which compiles industry statistics.
Still, the car has been Chrysler's last big success. No other Chrysler vehicle since the PT has generated the same kind of hubbub. "The PT Cruiser was really something; it came out of nowhere," said Mr. Brauer, whose Web site called the PT the most significant vehicle of 2001.
The PT's introduction is now seen as a dividing line between the fast-moving, American-led Chrysler of old and the less flashy style of the German-controlled DaimlerChrysler, which has since encountered financial difficulties that have forced two rounds of deep cost-cutting.
The ink was barely dry on the merger papers that created DaimlerChrysler when the PT was unveiled at the 1999 Detroit auto show. Based on the same chassis as the Dodge Neon compact, the PT was the subject of intense debate in the company. The idea for a small van with distinctive styling had been kicking around through the 1990's, but some executives questioned whether there would be a market for it.
Because there was little else like the PT on the market, Chrysler came up with the slogan "Too cool to categorize." It said the car would be aimed at younger buyers, one reason for the moderate price. But most often, the PT ended up being bought by middle-aged customers, including Colin L. Powell, the secretary of state, who added one to his stable of classic Volvos.
While the PT's roominess and versatility were selling points, many people bought it for its distinctive look. The design was part of the industry's flirtation with retro-looking vehicles like the Beetle and the Plymouth Prowler, an aluminum hot rod that has since vanished from Chrysler's lineup (along with the Plymouth brand).
But by now, buyers have grown accustomed to the PT, and its retro looks alone are no longer enough to generate higher sales, said Art Spinella, an industry analyst at CNW Market Research in Bandon, Ore. "Anyone who just couldn't live without one has one," he said. Through November this year, the company sold fewer than 97,000 PT's, compared with 130,000 for the comparable period of 2002.
But Chrysler isn't giving up. This year, it added the turbo version, which has a 2.4-liter, 215-horsepower engine and starts at $25,000. Coming in 2004 is a convertible version, which Chrysler first displayed at the 2001 New York auto show as a concept car. The convertible comes with two doors, making it a possible precursor to a PT coupe, which analysts expect Chrysler to introduce eventually.
Gary Dilts, Chrysler's vice president for sales, said the company was satisfied with the PT's performance. Chrysler regards it as a niche model, he said, not as a volume seller. He acknowledged that demand had dropped since the original flurry of attention, but he added, "We have a lot of people buying the PT Cruiser, because it is a great little package at a great price."
But analysts say the company faces the task of trying to regenerate interest in a vehicle that now seems passé.
The PT's appearance has become familiar now that hundreds of thousands are on the road, Mr. Spinella said. "The market is saturated with PT Cruisers and it's not as novel as it once was," he said. Other cars, like the Toyota Matrix and its counterpart, the Pontiac Vibe, as well as the boxy Honda Element, offer as much or more room and versatility as the PT, and at similar prices.
CAN interest in the PT be revived? Mr. Brauer points to VW's experience with the New Beetle. After sliding for several years, its sales are up slightly this year, thanks to the long-awaited introduction in late 2002 of a Beetle ragtop.
VW is also offering incentives to bolster Beetle sales, including a $500 rebate to previous VW owners, and $1,000 to dealers who arrange auto loans or leases through VW's financing arm.
The PT and the New Beetle offer cautionary tales for another halo car, the Mini Cooper, which has remained popular since it went on sale in March 2002. The German automaker BMW, which owns the Mini nameplate, is deliberately limiting sales in the United States to 25,000 a year, so as not to dampen demand.
The general manager of Mini USA, Jack Pitney, vowed in an interview that the company would avoid what happened to its competitors by introducing a steady stream of new versions. Next is a Mini convertible, due this spring, just two years after the original Mini went on sale - a much faster evolution than that of the Beetle and the PT.
Creating new versions is precisely what companies need to do with halo cars to keep generating interest, Mr. Brauer said. "The perfect company is the company that pulls you in, grabs you and holds you and doesn't let you go," he said.
Copyright 2003 The New York Times Company
When a One-of-a-Kind Car Looks So Last Year
By MICHELINE MAYNARD
Published: December 14, 2003
CHRYSLER had no idea that the PT Cruiser would be such a hit when it went on sale in the spring of 2000.
Or that its buzz would evaporate three years later.
Sales of the PT Cruiser, once the most sought-after car on the market, dropped 25 percent this year, despite a new turbocharged version that has been praised by reviewers. Three years ago, buyers were willing to pay as much as $10,000 over the PT's sticker price, but Chrysler is now offering interest-free loans and $2,000 rebates, so that a bare-bones version costs only $16,000. There are even special deals for employees, who initially did not receive company discounts on the PT because it was so red-hot.
What happened? Industry analysts say the fate of the PT Cruiser mirrors that of other halo cars - the industry term for unique vehicles that are meant to cast a favorable light on a company's lineup, drawing customers into showrooms.
The PT's experience echoes that of Volkswagen's New Beetle, which arrived on the market two years earlier, in 1998, to even more acclaim. Interest in the car fell after VW failed to offer new versions to keep the excitement going.
More recently, the new version of the Ford Thunderbird, which Ford Motor hoped would get the kind of buzz that greeted the Beetle and the PT, fizzled almost upon its introduction in August 2001, because of production delays and problems with quality.
These days, with so many new cars, trucks, minivans and sport utility vehicles arriving in showrooms, companies cannot expect to get much mileage out of halo cars, said Karl Brauer, editor in chief of Edmunds.com, a Web site based in Santa Monica, Calif., that offers car-buying advice.
"Once you slip out of the limelight, it's hard to get back there," Mr. Brauer said.
But back in 2000, the limelight shone on the PT Cruiser like George Hamilton's sunlamp. The retro-looking PT, with its sloping hood, zippy handling and roomy interior, seemed the latest hit for Chrysler, which had had a series of hot-selling cars in the 1990's, including the Dodge Viper and the Plymouth Prowler.
Chrysler dealers instantly sold out of the PT, which had the features of a minivan and the chassis of a compact car and brought to mind a Ford hot rod of the 1930's. At some dealerships, waiting lists were as long as a year. Car shoppers traveled across the country to find PT's, many paying thousands above the $17,000 starting price.
Those days are long gone. Dealers had a 136-day supply of PT's at the end of November, more than double the number of cars they prefer to have on hand at this time of year, according to the Autodata Corporation, which compiles industry statistics.
Still, the car has been Chrysler's last big success. No other Chrysler vehicle since the PT has generated the same kind of hubbub. "The PT Cruiser was really something; it came out of nowhere," said Mr. Brauer, whose Web site called the PT the most significant vehicle of 2001.
The PT's introduction is now seen as a dividing line between the fast-moving, American-led Chrysler of old and the less flashy style of the German-controlled DaimlerChrysler, which has since encountered financial difficulties that have forced two rounds of deep cost-cutting.
The ink was barely dry on the merger papers that created DaimlerChrysler when the PT was unveiled at the 1999 Detroit auto show. Based on the same chassis as the Dodge Neon compact, the PT was the subject of intense debate in the company. The idea for a small van with distinctive styling had been kicking around through the 1990's, but some executives questioned whether there would be a market for it.
Because there was little else like the PT on the market, Chrysler came up with the slogan "Too cool to categorize." It said the car would be aimed at younger buyers, one reason for the moderate price. But most often, the PT ended up being bought by middle-aged customers, including Colin L. Powell, the secretary of state, who added one to his stable of classic Volvos.
While the PT's roominess and versatility were selling points, many people bought it for its distinctive look. The design was part of the industry's flirtation with retro-looking vehicles like the Beetle and the Plymouth Prowler, an aluminum hot rod that has since vanished from Chrysler's lineup (along with the Plymouth brand).
But by now, buyers have grown accustomed to the PT, and its retro looks alone are no longer enough to generate higher sales, said Art Spinella, an industry analyst at CNW Market Research in Bandon, Ore. "Anyone who just couldn't live without one has one," he said. Through November this year, the company sold fewer than 97,000 PT's, compared with 130,000 for the comparable period of 2002.
But Chrysler isn't giving up. This year, it added the turbo version, which has a 2.4-liter, 215-horsepower engine and starts at $25,000. Coming in 2004 is a convertible version, which Chrysler first displayed at the 2001 New York auto show as a concept car. The convertible comes with two doors, making it a possible precursor to a PT coupe, which analysts expect Chrysler to introduce eventually.
Gary Dilts, Chrysler's vice president for sales, said the company was satisfied with the PT's performance. Chrysler regards it as a niche model, he said, not as a volume seller. He acknowledged that demand had dropped since the original flurry of attention, but he added, "We have a lot of people buying the PT Cruiser, because it is a great little package at a great price."
But analysts say the company faces the task of trying to regenerate interest in a vehicle that now seems passé.
The PT's appearance has become familiar now that hundreds of thousands are on the road, Mr. Spinella said. "The market is saturated with PT Cruisers and it's not as novel as it once was," he said. Other cars, like the Toyota Matrix and its counterpart, the Pontiac Vibe, as well as the boxy Honda Element, offer as much or more room and versatility as the PT, and at similar prices.
CAN interest in the PT be revived? Mr. Brauer points to VW's experience with the New Beetle. After sliding for several years, its sales are up slightly this year, thanks to the long-awaited introduction in late 2002 of a Beetle ragtop.
VW is also offering incentives to bolster Beetle sales, including a $500 rebate to previous VW owners, and $1,000 to dealers who arrange auto loans or leases through VW's financing arm.
The PT and the New Beetle offer cautionary tales for another halo car, the Mini Cooper, which has remained popular since it went on sale in March 2002. The German automaker BMW, which owns the Mini nameplate, is deliberately limiting sales in the United States to 25,000 a year, so as not to dampen demand.
The general manager of Mini USA, Jack Pitney, vowed in an interview that the company would avoid what happened to its competitors by introducing a steady stream of new versions. Next is a Mini convertible, due this spring, just two years after the original Mini went on sale - a much faster evolution than that of the Beetle and the PT.
Creating new versions is precisely what companies need to do with halo cars to keep generating interest, Mr. Brauer said. "The perfect company is the company that pulls you in, grabs you and holds you and doesn't let you go," he said.
Copyright 2003 The New York Times Company
