DaimlerChrysler sees retro PT Cruiser as a hit

Is it a car? Or a truck?

DaimlerChrysler AG's retro Chrysler PT Cruiser is a little of both, and the world's fifth-largest automaker believes it will create a whole new segment in the United States just as the Chrysler minivan did 16 years ago.

"It's really been dramatic to see the reaction," DaimlerChrysler North American design chief Tom Gale said. "We really wanted something that was going to break through and generate some attention, and still be very functional."

The vehicle defies pigeonholing, combining the small packaging of a Neon compact car with the utility of a minivan, auto analysts agreed. It can seat one to five people thanks to seats that fold flat and it boasts interior space rivaling many full-size sedans.

"It's cool, plain and simple," Nextrend analyst Wesley Brown said. "They're actually going to create a new niche within this market that we have not seen before."

DaimlerChrysler will begin production of PT Cruiser early next year at its Toluca, Mexico, assembly plant, and it will go on sale next May as a 2001 model. Analysts expect its base price to be under $20,000, with a well-equipped model selling for $2,000 to $5,000 more.

Analysts expect DaimlerChrysler to make as many as 175,000 PT Cruisers a year at full capacity, but estimates include the expected addition of an all-wheel-drive Dodge version.

The hatchback, with its big fenders and bullet-shaped tail lamps, was developed for about $350 million - half the new Neon's cost - because it shares the same platform, Brown said. DaimlerChrysler disagreed the vehicle is Neon-based, however, as it shares only 18 percent of the small car's parts.

In addition to left-hand-drive for the U.S. market, DaimlerChrysler will make right-hand-drive PT Cruisers to sell overseas in the hopes of building on momentum of the Chrysler 300M midsize car, which went on sale last year. PT Cruiser's very American, hot rod-like contours will appeal to international consumers, officials believe.

Before these vehicles, the Chrysler brand was better known overseas for minivans and Jeep vehicles.

Demand for such cars as PT Cruiser has been high in Asia and Europe thanks to vehicles like Renault SA's Megane Scenic microvan, AutoPacific analyst Jim Hall said. They have been ignored in the United States, where pickup trucks and sport utility vehicles (SUVs) rule the roost.

That is changing, however, with models on the way from Ford Motor Co., as well as Korean automakers Hyundai Motor Co. Ltd. and Daewoo Motor Co. Ltd., Hall said. General Motors Corp. has the best European model in the Opel Zafira microvan, but has no plans to bring it stateside.

The former Chrysler, which merged last year with Germany's Daimler-Benz AG, has earned a reputation for making vehicles, such as the Dodge Durango SUV, that sell well across different segments.

Chrysler created a new segment in November 1983, when the first minivan rolled off a Canadian assembly line and spawned a segment in which every major automaker now has an offering.

Gale expects PT Cruiser to serve as a "halo" vehicle for the Chrysler brand much like Prowler does for Plymouth, drawing consumers into showrooms.

Its car-truck dichotomy also will help it appeal to different kinds of buyers, analysts said. In early teaser ads in car buff magazines, DaimlerChrysler simply shows the vehicle without defining what it is.

PT Cruiser offers DaimlerChrysler another advantage thanks to its federal certification as a light truck. Its higher gas mileage will help balance out guzzlers like Jeep Grand Cherokee and Wranglers SUVs, allowing it to meet the U.S. government's corporate average fuel economy requirement for trucks.

By BEN KLAYMAN
REUTERS