Money & Company

Tracking the market and economic trends
that shape your finances.

« Previous Post | Money & Company Home | Next Post »

Chrysler to shed Viper

August 27, 2008 | 11:58 am

Viper Chrysler is putting its Dodge Viper sports car business up for sale in the latest move by a U.S. automaker to shed a niche product.

The No. 3 U.S.-based car company said today that it had been approached by potential buyers for the Viper unit, which Chrysler wants to sell as part of its strategy of focusing on a smaller number of core products.

Analysts said the division could fetch up to $100 million. Potential buyers include East Asian and Indian automakers that have been looking to get instant entree into global markets by buying established brands. Indian automaker Tata, for instance, bought the Land Rover and Jaguar brands from Ford this year.

A small-scale "supercar" builder such as Shelby or Saleen could also be a potential buyer, although the price tag could be a bit steep for outfits of that size, said David Healy, an analyst at Burnham Securities.

The Viper, introduced in 1992, is a "halo" car. The intention is to generate buzz, not big sales.

Although the aggressively styled speedster has maintained a loyal following since its introduction — there are Viper clubs across the country — its halo may be dimming a bit.

"I'm not sure how many people go into a Dodge showroom and buy a Caliber after they 'ooh' and 'aah' over a Viper," Healy said. "I'm not sure it's as much of a traffic builder as it might have been when it was new."

Vipers are hand-built at a plant in Detroit and have a starting sticker of around $82,000. Sales slumped badly last year, falling 70% to a mere 435 cars.

However, sales rebounded strongly this year after Dodge put a new 8.4-liter V-10 engine under the hood, upping the horsepower from 510 to 600 and giving it a 0-60 time of under 4 seconds. Through July, Dodge had sold 682 Vipers.

"There was pent-up demand for the new 600-horsepower model," Chrysler spokesman Todd Goyer said.

As is often the case with sports cars, Viper buyers are overwhelmingly male — 95% to be exact. The average buyer is 49 and makes $163,000 a year. Florida, California and Texas are the biggest markets.
Fuel economy is on the low side: 13 miles per gallon city and 22 highway for a combined 16 mpg. Not that buyers in the Viper's price bracket care about such things.

General Motors' Hummer sport utility vehicle brand is also for sale. All three of the Detroit automakers are losing money as they try to meet shifting consumer demand for more fuel-efficient vehicles.

— Martin Zimmerman

Photo: 2008 Viper. Credit: Chrysler

Comments 

Advertisement