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The long goodbye: Neon fades from view

The small car never lived up to lofty goals of topping Japanese rivals; Dodge sport wagon takes its place.

By Brett Clanton / The Detroit News
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The Dodge Caliber sport wagon will replace the Neon next year.

Chrysler's latest small car
DaimlerChrysler AG's Chrysler Group is expected to debut its Chrysler Akino small car concept at the Tokyo Auto Show in October. The five-passenger vehicle, named for Chrysler designer Akino Tsuchiya, hints at the direction of the automaker's compact cars. It also explores auto interiors of the future, with its bamboo flooring, mood lighting and throw pillows.

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Hailed a decade ago as Detroit's best shot at beating the Japanese at their own game, the Dodge Neon will quietly go out of production this week, remembered mostly as a little car with big expectations that couldn't deliver on them.

Famously introduced with a simple "Hi" in a 1994 ad campaign, Neon is saying goodbye at a time when the small car segment is becoming more competitive, forcing automakers to rethink the way they reach entry-level car buyers.

DaimlerChrysler AG's Chrysler Group will replace the Neon early next year with the Dodge Caliber sport wagon, a vehicle that is more in line with a shift to bigger, more versatile vehicles in the small car market.

Neon's exit from the market is renewing questions about whether Detroit automakers can make a profit building small cars -- an achievement that's especially pressing now that the Big Three are seeing SUV sales weaken and are counting on other vehicles to make up for the lost revenue.

Detroit has produced small car hits such as the Ford Escort and Chevrolet Cavalier, but the Neon is a good example of how the Big Three's focus on trucks and SUVs worked to their detriment in other market segments.

"It was a friendly little car. But it never really had the specs to wow anybody," said Peter Dixon, senior partner at Lippincott Mercer, a brand consulting firm in New York.

That wasn't the case when the Neon first came out.

Few vehicles from Detroit have enjoyed the promotion and praise that attended the arrival of the Neon in February 1994. In cover stories at the time, the Wall Street Journal and BusinessWeek magazine called the Neon the first legitimate U.S. contender in years to the Honda Civic and Toyota Corolla. A likeable ad campaign, showing a white Neon facing into the camera and saying "Hi," also endeared the car to thousands of American families.

But all the exposure may have created unrealistic expectations for the car, said Tom Libby, an analyst with J.D. Power and Associates' Power Information Network.

"If they had had a history of being strong in that segment, I think it would have been easier. But they didn't."

With Neon, Chrysler carried the hope of the U.S. auto industry that Detroit could win back ground lost to Asian rivals. Chrysler even developed right-hand drive versions for Japan, prompting fear in the Japanese press that Neon would be a "Japan car killer."

But neither happened. "That may have been idealistic thinking," Libby said.

The Neon, initially sold under the Dodge and Plymouth brands before Plymouth was phased out in 2001, replaced the Dodge Shadow and Plymouth Sundance. It did well early on -- posting sales of 240,000 in its first full year on the market -- despite three embarrassing recalls shortly after its introduction.

"I didn't expect it to be perfect," said Greg Croft, 30, an information systems analyst in Frazier who bought a first generation Neon that was recalled for a leaky head gasket. "It was a $13,000 car."

Pitched as an economy car with better standard safety features and a bigger engine than competitors, Neon sales peaked at 245,000 in 1996 but have been on the decline since.

The car's image also has suffered along the way. Once seen as sprightly and cute, the Neon grew to be viewed as cartoonish and ultimately uncool -- an idea that wasn't helped by its prevalence in rental car fleets.

The baggage around the Neon name became so bad that in 2003, when Chrysler debuted a high-performance SRT-4 version of the car, it dropped the Neon name altogether in promotions.

"What I'll say about Neon is that we didn't really follow the trends in that segment very well," said Joe Eberhardt, Chrysler's executive vice president of marketing. While other automakers were improving interiors and increasing the size of their small cars, the Neon hardly grew from its original design, he said.

"Honestly, we've not focused on (the small car) segment of the market as much as we did trucks and SUVs," he acknowledged.

Chrysler is banking on bigger things with the Dodge Caliber. The small wagon, which is similar in size to the Pontiac Vibe and Toyota Matrix, fits in with a trend toward larger and better-equipped vehicles in the small car category. It will feature a highly flexible interior and a family of peppy and fuel-efficient engine options and will be built at a factory in Belvidere, Ill., which is undergoing a $419 million renovation this fall so that the Caliber will be available by early spring.

The Neon will have its swan song at the Belvidere plant on Friday, when the last model is scheduled to roll off the line.

It will be an emotional day for Kelly Brookhart, 23, of Ridge, Md., who has a 1999 Neon and feels a connection with other Neon owners.

"The people who own Neons are like a family," she said. "They have something about them that makes them special." It's kind of a loveable underdog mentality that attracts a certain breed of buyer, she said.

But just because the car is going away, that doesn't mean its following among enthusiasts will fade.

"Those that are loyal still will be loyal," said Tim Kish, 31, who owns three Dodge Neons, including a spruced-up show car and a modified drag racer. He said Neon's exit could make his collection more valuable, but it may take a while to get past the idea of there being no Neon on the market.

"It will be a hurt to us," said Kish, speaking for the Neon enthusiast crowd. "But I'll move on. I'll try to accept it."

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