Chrysler to call Fiat-based compact the Dodge Dart
DETROIT -- The Dodge Dart, a 1960s compact car that gearheads turned into street racers, is making a comeback.
Chrysler said Tuesday that it will use the Dart name for a new compact car based on Italian technology that it will introduce in the U.S. next year.
The Dart, which is expected to get 40 miles per gallon of gas on the highway, is an extremely important car for Chrysler Group LLC, which currently has outdated offerings in the fast-growing compact car market. Young buyers in the U.S. generally pick compacts as their first new cars, and research shows they'll stick with a brand if they like their first vehicle.
The new car is based on the Alfa Romeo Giulietta, a compact sold in Europe, but will be wider and longer to handle Americans' need for more space. Chrysler said in a statement that the four-door sedan will perform well and be efficient. It's the first car sold by Chrysler dealers that is based on Fiat underpinnings.
The Dart, due in showrooms during the first half of next year, will replace the Dodge Caliber, a slow-selling compact SUV that is based on a Spartan design from Chrysler's lean years before bankruptcy protection. Two other compact SUVs, the Jeep Compass and Patriot, will still be sold.
The Dart also is important to Fiat because the Italian company will get another 5 percent stake in Chrysler once it starts making a car in the U.S. that gets 40 mpg.
The Dart will be produced at the Chrysler assembly plant in Belvidere, Ill., where the company is investing $600 million.
Chrysler said the Dart, to be formally introduced in January at the Detroit auto show, will offer three choices for a four-cylinder engine. It has a 1.4-liter turbocharged engine that also goes in the high-performance Fiat 500, a 2-liter four and a larger 2.4-liter engine.
The Dart comes at a critical time for Chrysler, with strong growth projected in the compact car segment. Compacts could unseat midsize cars this year as the largest U.S. market segment for the first time in at least two decades, according to J.D. Power and Associates, a marketing information firm.
Rebecca Lindland, senior analyst for the IHS Automotive consulting firm, said growth in compacts will continue as the segment attracts young first-time buyers as well as baby boomers who are downsizing their cars.
General Motors has taken advantage of the growth with the Chevrolet Cruze, the company's first decent small car in recent years, she said. The Cruze, which was just introduced last year, is among the top-selling compacts in the nation through November.
She said the Dart will have to be really good because competition in the segment is fierce.
"You've got to have your best game face," Lindland said.
Chrysler nearly ran out of cash in 2008 and needed a $12.5 billion government bailout to survive bankruptcy protection. In exchange for management expertise and technology, the government gave Fiat SpA control of Chrysler and a 20 percent stake in the company.
Under Fiat CEO Sergio Marchionne, who now leads both automakers, Chrysler repaid its government loans, and Fiat bought the government's stock in Chrysler. The government will lose $1.3 billion of its original $12.5 billion bailout.
Fiat now controls Chrysler with a 53.3 percent stake in the company. Under a 2009 deal with the government, Fiat got a 20 percent stake after Chrysler exited bankruptcy protection. Fiat gradually raised its stake and gained a majority share in July, when it bought the U.S. Treasury's remaining shares.