Chrysler looking at options for the Viper

updated 12:52 p.m. ET Aug. 27, 2008

Chrysler LLC said Wednesday it is weighing options for its iconic Dodge Viper sports car, which could include a sale of the nameplate.

The Auburn Hills, Mich., automaker is mulling strategic options for the Viper, and has been approached by third parties "interested in exploring future possibilities with Viper," Chairman and Chief Executive Bob Nardelli said in a statement.

Chrysler spokesman Todd Goyer declined to name the parties. He said the review is part of a move toward focusing on Dodge's core nameplates.

"Obviously, we want to ensure a strong future for the Viper, but as we focus on the core business we'll listen to people who have expressed interest," Goyer said in an interview.

He said the strategic review was for Viper alone, and added the company was simply reviewing options and no transaction might occur at all.

The review comes as Chrysler and other automakers grapple with a broader industry downturn brought on by a weak economy, high gas prices and slumping demand for large autos. Chrysler's U.S. sales are down 23 percent for the year while industrywide sales have declined 11 percent.

Chrysler has expressed interest in asset sales in the past as it copes with the downturn. Earlier this month, Vice Chairman Tom LaSorda said the company has identified more than $1 billion in "nonearning" assets that it intends to sell to generate cash.

Chrysler, which went private in August after private-equity firm Cerberus Capital Partners LP bought an 80.1-percent stake in the company, is not required to report financial results. However, it has said it's performing ahead of its own expectations, with $11.7 billion in cash on hand at the end of June and earnings of $1.1 billion in the first half of the year before interest, taxes, depreciation and amortization.

Goyer declined to say how much the nameplate might be worth. However, the Viper line, a high-end hot rod nameplate that has been part of the Dodge lineup since 1992, makes up just a fraction of Dodge's overall sales. Dodge has sold 682 Vipers so far this year, compared with more than 62,000 Chargers and 150,000 Rams sold.

Moreover, the Viper has its own assembly plant in Detroit and a manufacturer's suggested retail price of $88,125 on its 2008 model. The nameplate may be past its prime given that small scale and niche focus, said Mike Jackson, director of North American vehicle forecasts for CSM Worldwide.

"Chrysler has some greater priorities to tend to," Jackson said. "The market has changed significantly. Competition within that premium luxury category only intensifies, and as a result, it really puts something like the Viper at a competitive disadvantage from the standpoint that its obviously a very niche focus with limited scale."

In addition, the brand's designer, Trevor M. Creed, is retiring at the end of this month, Chrysler has said. Creed, 63, also designed the Challenger, Ram and Chrysler PT Cruiser.

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