Is Dodge’s New Hellcat a Screaming Deal? – Businessweek
Many product strategies have proved to make money in the car business. A company can make a really sturdy pickup (Ford Motor (F)), a highly refined sports car (Porsche (PAH3:GR)) or a luxurious sedan that never uses a drop of gas (Tesla Motors (TSLA)).
Dodge, however, is betting on a business model from the 1970s: selling lots of engine for fewer dollars. The company’s new Challenger Hellcat will have a blistering 707 horsepower and a starting price tag of $60,000—or roughly $85 per horse.
Granted, that’s a lot of money for a car. The standard Challenger can be had for about $26,500. But the engine in that version is only about half as powerful. Meanwhile, the Dodge’s muscle-car rivals—Ford’s Mustang and Chevrolet’s (GM) Camaro—come cheaper. But neither come close on horsepower. With more than 700 ponies, the Hellcat’s engine more closely stacks up to those in refined European brands, such as Ferrari and Porsche.
Here’s a look at how some of the most powerful cars stack up on both price and power.
For Fiat Chrysler (F:IM), the car represents a clear turn in corporate strategy. In the company’s garage of brands, Dodge is going to be all about Detroit-style performance. If you want a sleek sports car that handles well, Fiat will sell you an Alfa Romeo. If you want a sensible sedan, it has a bunch of Chryslers. A burly SUV or a truck? There’s Jeep and Ram. The Hellcat—and many of the other Dodge models—are for drivers who want to pick up four friends and melt tires at a stoplight.
In the auto industry, this is known as a halo car, a model intended to make a statement and draw attention the brand. Hellcat buyers won’t overthink it, and Dodge won’t overprice it.