Chrysler Using Bigger Ad Budget to Get New Models Noticed

Chrysler finally has an abundance and diversity of models in its lineup, but now is faced with the huge challenge of marketing them all. So the auto giant has announced it is boosting its advertising budget by nearly 70 percent this year to about $2.9 billion.

Detroit news says those figures are based on the $1.72 billion budget of last year, some recent documents filed to the Security and Exchange Commission (SEC), plus the carmaker’s comments to the dealers, which revealed last month that it would increase spending by 68 percent.

Chrysler CEO Sergio Marchionne has asked Fiat marketing chief Olivier Francois to head Chrysler's marketing, as well. He will have to spread the money across 16 new or refreshed vehicles from five brands, including the Fiat, which is making its return to North America after 27 years.

The Fiat 500 is a niche car and "it doesn't have to be everything to everybody," Laura Soave, who is overseeing Fiat's return to North America, said. And Fiat is not a mass brand, "so I don't need to be everywhere."

However, selling the new models is only part of the marketing equation, as the increased budget will also serve to boost the company’s image ahead of the initial public stock offering expected later this year. Chrysler must show its future investors that its improved financial situation and fresh product offering make it a safer bet.

"It will take a lot of money to get the message out," said Dave Sullivan, an analyst with AutoPacific Inc. in Ann Arbor. "Chrysler still suffers from the stigma of bankruptcy and a handout, and there is still the perception the money went to a lost cause. But they have an impressive turnaround story to tell."