Detroit’s saving grace: All-American muscle car

The amount of passenger cars sent to the scrap heap keeps getting
larger. The Dodge Dart and Chrysler 200 are over, Ford models including the
Fusion and Fiesta are done and last month General Motors Co. announced plans to
cull the Buick LaCrosse, Chevrolet Impala and others. But as Detroit kills off
slow-selling sedans, there’s one niche that’s hung on: retro-styled reincarnations
of muscle cars introduced in the 1960s and 1970s. “What’s dying is the commoditized, four-door nothing burger, no-personality cars,” said Tim Kuniskis, who ran the Dodge brand at Fiat Chrysler Automobiles NV from 2013 to early 2018. Muscle cars “have a really well-defined personality and positioning while enticing respectable revenue.” For example, Fiat Chrysler commands an average transaction price of around $36,000 for its muscular Dodge Challenger. It might not be enough to match the fat margins on the trucks and SUVs that have become the focus for Detroit, but these powerful throwbacks can be still be moneymakers. And that can help big automakers finance their shift to a more electric future, especially since the initial investment on developing a Challenger or a Dodge Charger has long since been paid off.

Looking for growth in muscle cars still might be a bit of a stretch. Fiat Chrysler expects to sell roughly 65,000 Challengers this year, about the same as last year and just below the record 66,000 reached in 2015. Sales of the four-door Charger dropped 11 percent this year through November. Still, compared with the death spiral that’s consumed sedans, the Dodge muscle cars are doing alright. Retail sales of large passenger cars, a segment that includes the Nissan Maxima and Chevy Impala, is down 21 percent in 2018, according to J.D. Power. The Ford Mustang, the top-selling muscle car in America, was down a modest 3.6 percent through last month.

Manufacturers of more mass-market sedans are trying some of the same tricks to a lesser degree as a way to revive flagging sales. Even Fiat Chrysler is to stanch the bleeding from Americans’ disinterest in compacts by packing more power into their engines. Every Fiat model starting in 2019 will be turbocharged, said Steve Beahm, head of Fiat Chrysler’s passenger brands. However, considering that drag racers in Challengers, Camaros and Mustangs are already being bested by Tesla drivers on the track, a omen of the electric future awaiting the muscle-car world. Kuniskis said he expects performance cars to become more electrified over time, with plug-in hybrid versions taking off in the future. However, they declined to go into detail on Fiat Chrysler’s product plans, and the automaker hasn’t invested heavily thus far to bring in electric vehicles to market. But their cult following, muscle cars are always going to be a niche segment, leading some analysts to still question how much longer they’ll hang around. The Dodge, Fiat, and Chrysler brands were all left out of the automaker’s five-year strategic plan the company presented in June, and Schuster of LMC thinks it may be hard to sustain enough volume to keep the Charger and Challenger alive beyond the next three or four years. Fiat Chrysler’s Beahm insisted the Challenger isn’t going anywhere because it sets the tone for the whole Dodge brand. “I’m not going to tell you it’s going to grow,” Beahm said. “But it’s going to dramatically buck the trend regarding where passenger cars have gone lately and where they’re going to go in the next couple of years.”