Will Chrysler Survive Its 2008 Meltdown?

2008 will go down as a truly historic year for the global automotive manufacturing industry, thanks mostly for plunging sales. Save Subaru, no manufacturer was spared as the world was gripped in a recession that saw housing prices, new car sales, and consumer confidence take a beating.

The most glaring example of an automaker whose fortunes have sunk in the past year would be Chrysler, LLC the privately owned automaker controlled by Cerberus Capital Management, LP. For December 2008, sales dropped by 53% over the same month in 2007, which helped to push Chrysler's market share losses down further. For the year, Chrysler's sales plunged by 30%, the worst of any full line car manufacturers in the United States.

Regarding its performance in December as well as for 2008, Chrysler had this to say:

"Last year Chrysler and all of our stakeholders persevered through extraordinarily difficult economic conditions, made the necessary adjustments and always kept our focus on serving our customers," said Jim Press, President and Vice Chairman, Chrysler LLC. "As a result, our Company and our dealer network start this year stronger and better positioned to succeed in today's marketplace."

"From a customer perspective, we see consumers selecting vehicles based on their long-term transportation needs and committing to keeping vehicles for longer periods. As a result, characteristics such as utility, flexibility, efficiency and quality will grow in importance. In terms of product focus, Chrysler will continue to invest in quality and fuel efficiency improvements on its current lineup, while developing all-new vehicles for the next generation. From an organizational viewpoint, we will work with all of our stakeholders to continue the restructuring our Company. We have a special bond with the American people now and pledge to continue our efforts to provide the best quality and best value in the marketplace. We are committed to help drive America forward."

The surprisingly upbeat response from Chrysler shouldn't divert attention for anyone that Chrysler is in terrible shape. In the fall, Chrysler and General Motors attempted to merge, but that move was canceled when the condition of both automakers worsened. For 2009, Chrysler still remains far behind other car companies when it comes to producing a full line of economical cars. As gas prices rise this spring, that situation will become more noticeable for the troubled automaker.