Chrysler Cuts Production Goals, Blames Suppliers

Chrysler is being forced to reduce is projected global shipments for the year by about 100,000 units.

Original expectations had Chrysler shipping 2.7 million units through 2013, but consistent problems with suppliers stymied production through the first six months of this year, CEO Sergio Marchionne said. “It is fair to say that we have had issues with most of our plants across the supply side.” Revised numbers call for 2.6 million units to be distributed worldwide.

A failed launch of the Dart compact sedan last year cause problems for Chrysler, but global sales are up 10 percent thanks in large part to a 17 percent U.S. sales increase. Strong demand for both heavy- and light-duty Ram pickup trucks as well as strong sales of the Jeep Grand Cherokee were driving forces in domestic sales.

The lack of a compact SUV in the company’s portfolio has been an expensive burden, and news of problems with its replacement — the Cherokee — could be cause for concern.

Yesterday, Chrysler spread word to the media that a scheduled preview of its new Cherokee SUV set to begin Sunday would be postponed because of an electronic issue. Marchionne emphasized during a conference call with journalists and industry analysts today that this is routine procedure during any product launch, but that the company is being especially careful this time.

The Cherokee is Chrysler’s most important product launch of the year, and Marchionne said the automaker’s goals for the second half of the year aren’t possible without it. Even small issues could prove to be problematic.

“This is the first incarnation of the front-wheel, all-wheel drive ZF transmission we’re installing in the vehicle,” Marchionne said.

In doing so, the Cherokee will enjoy fuel economy benefits, but the brand is concerned with ensuring the new vehicle lives up to off-road capabilities expected with the Jeep brand.

A second shift at the Toledo assembly plant will begin on August 19. Cherokees are expected to trickle into dealers starting in September with a full-volume rollout in October. Marchionne said the Cherokee’s electronic issue will come with a relatively painless fix that will be complete by mid-August.

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