The rearview mirror: Chrysler is building a cost-effective compact car

The 1991 Chrysler Neon concept car

It’s the spring of 1992 and a new vehicle, dubbed the PL, was undergoing a final visit from company executives before being approved for production.

The car’s design was previewed on the 1991 Chrysler Neon Concept Car, which featured four sliding doors, a fabric sunroof, retractable rear window and even a trash compactor. But perhaps its most striking feature was its round headlights.

Now Chrysler CEO Lee Iacocca, Chairman Bob Lutz and Vice President of Design Tom Gale and others were reviewing the proposed production car. While the more fantastic elements of the Chrysler Neon Concept Car’s design were absent, such as the trash compactor, so were its round headlights, replaced by narrow headlights similar to those used on Japanese cars.

Iacocca was not happy.

Still, he had promised the development team that he would not interfere with the development of the PL, something very different from Iacocca. Still, he couldn’t help it. “You’ve lost kindness,” complained Iacocca, a story told in the book “Comeback” by Paul Ingrassia and Joseph B. White.

Iacocca was right, and despite breaking his promise, the design change was eventually made, costing $7 million in tooling costs. But the new headlights turned out to be cheaper to manufacture, so the costs were recouped.

1995 Dodge Neon
Just before its debut, CEO Lee Iacocca told the designers that they “lost the cuteness”. The round headlights returned.

The PL will make its debut this week at the 1993 Frankfurt Motor Show as the Dodge and Plymouth Neon, an attempt to build a cost-effective and desirable American compact car.

“We think the Neon will be one of the first small cars that people want to buy, instead of having to buy,” Lutz said.

Indeed, it was, as Chrysler would go on to sell over 2.2 million. And it was also profitable. In fact, its effective development will eventually attract the attention of Daimler-Benz.

A time of trouble

It’s 1990 and Chrysler is hemorrhaging money.

After saving the automaker from bankruptcy in the early 1980s, Iacocca had nearly driven it off the cliff again by the end of the decade, using the profits to diversify the business rather than invest in new products. . But it was time to replace the Dodge Shadow and Plymouth Sundance, known internally as P-Cars.

Small cars have never made money for American automakers. They were loss leaders used simply to meet federal fuel economy standards that allowed automakers to sell bigger, more fuel-efficient, and more profitable cars. So Iacocca looked to others to supply the company’s next small car, including Fiat, Hyundai and Mitsubishi, an automaker that had supplied Chrysler with a number of small cars under the Dodge and Plymouth brands since 1971.

But other Chrysler executives wanted the company to develop its own small car, one that could be profitably built in America. By April 1991, Iacocca was convinced and work began on what became known internally as the PL-Car.

Smart choices for a profitable small car

The chosen PL team was a mix of personalities. Some came from American Motors Corp., which Chrysler bought from Renault in 1988, where they worked on the Renault-based, AMC-designed Alliance Renault replacement. Others came from the L-Car team, which created the popular Dodge Omni and Plymouth Horizon. The car would be sized between Chrysler’s P-Cars and their L-Cars, aka Dodge Omni and Plymouth Horizon.

2003 Dodge Neon SRT Front REL
The car even spawned an SRT model later in its run.

But unlike those cars, the PL would be a three-box design, one with a low beltline and large daylight openings to enhance its feeling of space. Its design eschewed the boxy functionality that had become de rigueur among economy cars, swapping it for a funky cuteness that exuded personality, thanks to its friendly face, with large round headlights and a horizontally-slotted grille.

With a $1.3 billion development budget for an all-new car, there was no money to retrofit a factory, let alone build a new one. The PL team should reuse as many existing machines as possible, which had never happened at Chrysler. This cost constraint and others led to smart decisions.

Since the PL cars would be built at the same plant as the midsize Chrysler New Yorker and Dodge Dynasty sedans, the new car would share their 104-inch wheelbase, which was long for what was supposed to be a compact car. But the Neon’s forward cabin design, which devoted more of the car’s length to its cabin, made it possible. This saved the automaker millions of dollars in manufacturing costs, as much of the New Yorker and Dynasty’s manufacturing equipment could be reused.

Recycle and reuse big green nets

This and other efficiencies were implemented for the first time, including a major money saving: Dodge and Plymouth PL cars would have the same name and design. Detroit’s old trick of using different nameplates and adding minor styling differences fooled no one, but cost a lot of money. The savings allowed Chrysler to equip the Neon with standard driver and passenger side airbags and adjustable front seat belts, and offer optional anti-lock brakes, all unusual in a small car at the time. And, of course, there were cup holders.

Engineers also developed a new engine by reusing the old Chrysler 2.2-liter block, but fitting it with a new cylinder head and four valves per cylinder, minimizing the need for new tools, although a new five-speed automatic gearbox has been designed. Chrysler’s 3-speed automatic was reused.

More importantly, Chrysler injected it with a fun-to-drive feel, with either a 132-hp four-cylinder engine or an optional 150-hp mill.

While its design proved distinctive, so did its ad campaign, which featured a front view of the car, looking at the world as if smiling, with the word “Hi” underneath. It was as charming as the car itself.

It would last two generations and spawn an SRT variant and only cost $4,000 per unit to build, despite a retail price of $8,000. Chrysler’s ability to develop and build a profitable American compact car caught the eye of Daimler Benz, which eventually merged with Chrysler Corp. in 1998.

The Neon was replaced by the Dodge Caliber in 2006. Developed under the German management of DaimlerChrysler, it would prove to be a dud.

The magic was gone.

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