Times of crisis

1977 Dodge Diplomat sedan

Everything changed at Dodge (and Chrysler as a whole) when the 1973 oil crisis hit the United States. Save for the Colt and certain models of the Dart, Dodge's lineup was quickly seen as extremely inefficient. In fairness, this was true of most American automakers at the time, but Chrysler was also not in the best financial shape to do anything about it. Consequently, while General Motors and Ford were quick to begin downsizing their largest cars, Chrysler (and Dodge) moved more slowly out of necessity.

At the very least, Chrysler was able to use some of its other resources. Borrowing the recently-introduced Chrysler Horizon from their European division, Dodge was able to get its new Omni subcompact on the market fairly quickly. At the same time, they increased the number of models imported from Mitsubishi: first came a smaller Colt (based on Mitsubishi's Mitsubishi Lancer line, then a revival of the Challenger (though with nothing more than a four-cylinder under the hood, rather than the booming V8s of yore).

Bigger Dodges, though, remained rooted in old habits. The Dart was replaced by a new Aspen for 1976, but really only the styling changed—everything underneath was about the same. The Coronet and Charger were effectively replaced by the Diplomat for 1977, which was actually an "upsized" Aspen. Meanwhile, the huge Monaco (Royal Monaco beginning in 1977 when the mid-sized Coronet was renamed "Monaco") models hung around through 1977, losing sales every year, until finally being replaced by the St. Regis for 1979 following a one-year absence from the big car market. In a reversal of what happened for 1965, the St. Regis was an upsized Coronet. Buyers, understandably, were confused and chose to shop the competition rather than figure out what was going on at Dodge.

Everything came to a head in 1979 when Chrysler's new chairman, Lee Iacocca, requested and received federal loan guarantees from the United States Congress in an effort to save the company from having to file bankruptcy. With bailout money in hand, Chrysler quickly set to work on new models that would leave the past behind.