• by Karl Greenberg , August 28, 2008

As Chrysler tightens its belt and moves to focus its marketing and production energy on new hybrids, compacts and crossovers, it is also considering a spinoff of the Dodge Viper--a muscle car the company launched in the early 1990s to vie against the Chevy Corvette and European cars like the Porsche 911.

Chrysler wasn't specific about its plans. A spokesperson said the company has made no decisions. "It's important to note that this is a business decision to initiate a strategic review to explore options," he says. "We've been approached by third parties, and we've agreed to listen ... there can be no assurance that any transaction will take place as a result of this process."

In a release, Chrysler CEO Robert Nardelli says the company would include operational and financial support in any deal.

The Viper is assembled by hand in the company's Conner Avenue plant in Detroit. Chrysler, which says it wants to focus on Dodge Journey, Dodge Challenger, Dodge Durango Hybrid and Dodge Ram, has retained Lazard as its financial advisor in connection with the Viper review.

Wes Brown, automotive analyst at Los Angeles market research firm Iceology, points out that the Viper has been a very niche-market car that has existed as an island unto itself at Dodge. The first-generation V10 Viper was green-lighted in the early 1990s by former executive Robert Lutz, currently GM vice chairman.

"There was huge mania around the vehicle when it was first shown at the Detroit show, and it was green-lighted, but it has probably never sold more than a couple of thousand units in its peak years," says Brown, who adds that the car--made to be America's answer to the Porsche 911, and Dodge's answer to Chevrolet--was just too pricey to get the kind of volume the latter has gotten with Corvette. "Even though they found a way to make it a business case to build it by using components and sharing as much as they could, it still was expensive to build," he says.

Dodge sold 88 Vipers last month, and 682 of the cars year-to-date through July. General Motors sold about 1,870 Corvettes last month, and 16,824 of the vehicles through July.

Brown says that the Viper did serve a purpose as a halo car for the brand, bringing potential customers who just wanted to see the car into Dodge showrooms. "There is no doubt in general about the trickle-down effect of having a flagship vehicle; it enhances the emotion of a brand, and it is the epitome of what the brand stands for."

But Brown points out that if such a vehicle shares nothing at all with its siblings, it serves no real function. Ford had a limited run of its Ford GT two-seat performance car launched during Ford's centennial in 2005, and halted it a year later.

Todd Turner, president of Car Concepts, a Thousand Oaks, Calif.-based auto market firm, goes further. "Frankly, the Corvette doesn't do much for Chevrolet; the car has its own identity and people don't buy another Chevrolet because Chevy builds Corvette," he says. "I think the whole halo theory has yet to be proven. Dodge got a whole lot more capital from its Ram pickup than it ever got from the Viper in terms of brand image and showroom traffic."