Chrysler Corp. will end its slow-selling Eagle brand of cars after the 1998 model year - a move analysts have expected for months.
The No. 3 automaker said it has sent letters to all 2,340 U.S. Eagle dealers saying sales and service agreements will end effective Sept. 30, 1998."Eagle sales have declined to a point at which the volume no longer justifies the expense of maintaining the brand," said James P. Holden, Chrysler's executive vice president of sales and marketing.
The two-car line, which includes the Vision sedan and the Talon sports coupe, moved closer to extinction in June when Chrysler announced it would not advertise the brand nationally in the 1998 model year.
Analysts had speculated Chrysler would discontinue Eagle once the company finished pairing Jeep-Eagle and Chrysler-Plymouth dealers.
All but three Eagle dealerships are now matched with other Chrysler brands, Chrysler spokesman Mike McKesson said. "I don't think there were any dealers who were relying on Eagle sales for their volume," he said.
Don Elliott, who has a Jeep-Eagle dealership near Houston, said the announcement was a "non-event" because customers didn't know about Eagle products and dealerships weren't relying on them. He said he didn't order a single 1997 Eagle product because he, like nearly all other dealers, offered other Chrysler-made cars.
"I think they should have taken that action three years ago," he said of the Chrysler Eagle termination. "It just wasn't meant to be."
Eagle was started in 1987 for about 1,500 former American Motors Corp. dealers Chrysler acquired the same year. It was offered at dealerships that also sold Jeep sport utility vehicles.
Sales suffered from a declining demand for coupes and because it was difficult for Chrysler to conduct massive advertising campaigns for multiple car brands, said David J. Andrea, an analyst with Roney & Co. in Detroit.
"When you try to maintain two or three different brands, you tend to water down your marketing," he said.
Chrysler in the past 11 months has sold 16,025 Eagles, or seven for each U.S. Eagle dealer. Sales of 1997 models fell 48 percent through August, and sales of 1996 models dropped 44 percent last year, to below 35,000.
Eagle sales in its first nine years ranged from 50,000 to more than 70,000, reaching a peak of 75,214 in 1989.
To boost the brand's fortunes, Chrysler in 1994 invested $100 million in a two-year ad campaign that featured comic-actor Greg Kinnear wisecracking as he and potential buyers took test drives.