Chrysler Group to Boost Ad Budget by 70% to $2.9 Billion in 2011

As the Chrysler Group continues its product renaissance with new or facelifted models, the Auburn Hills automaker is now looking to boost its marketing presence in the United States by increasing its advertising budget nearly 70 percent this year, from $1.72 billion in 2010 to around $2.9 billion in 2011.

The increase is even greater when compared to 2009, when Chrysler had just come out of bankruptcy and joined forces with the Fiat Group. According to the SEC filing, the Detroit firm spent just $677 million on advertising in the second half of 2009.

However, promoting the firm’s new models isn’t the only reason behind Chrysler’s decision to boost its advertising expenditure as the automaker also wants to convince investors that the company is on the right track ahead of an initial public stock offering expected later this year

"No matter how good or bad the new products are, it is all about perception now," analyst Ricardo de la Blanca, chief executive of DLB Group in Miami, told Detroit News. "It is safer to buy a competitor's vehicles, so the challenge is to engage consumers. If they do it right, they will be able to create hype," he added. "It is critical because they also need to satisfy investors and the government."

Source: Detroit News

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Chrysler Group Celebrates Production Launch of 2012 Fiat 500 at Toluca Plant, May Also Produce Second Fiat Model in Mexico

Chrysler Group CEO Sergio Marchionne and Mexico’s President Felipe Calderon celebrated the start of the 2012 Fiat 500 production today at the Detroit firm’s Toluca plant in Mexico. The company invested $550 million USD, with the assistance of loans from the Mexican government, to build the subcompact model at the Toluca site.

Chrysler said the plant will build more than 120,000 examples of the Fiat 500 for export to the United States, Canada, and South America, as well as to China by the third quarter of 2011. The same factory also produces the Dodge Journey, which is shipped to the U.S. as well as its Fiat twin, the newly revealed Freemont that will be sold in Europe.

“With the assistance of the Mexican government, we have been able to prepare the Toluca Assembly Plant for production of the first Fiat, a vehicle that demonstrates the level of cooperation between our two companies and reintroduces the brand to the North American market after more than 28 years,” said Marchionne.

“Mexico is in an ideal position for production of this car. Because of its free-trade agreements with neighbors to both the north and south, it is a bridge between NAFTA and Latin America. And for the Mexican market, where the 500 has already been sold for several years, this marks an important shift from a vehicle imported from Europe to one that is built locally,” Marchionne added.

Speaking to reporters at the event, Marchione also announced that the company is looking to assemble a second Fiat model in Mexico, though he did not get into any specific details.

“We need to decide what we’re going to do with that plant,” Marchionne said. “The likelihood is that we will bring in an architecture that is more versatile and will give us an opportunity to produce more than one top hat or body style. Nothing has been decided.”

The company also confirmed that Alfa Romeo cars will go on sale in Mexico in June or July, starting with the Mito supermini, Giulietta compact hatch and the 159 saloon. Marchionne added that the 4C mid-engine sports coupe, which was shown in pre-production form at the Geneva Salon last week, would also be available in the near future.

Sources: Chrysler & Bloomberg

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