Sales of the second generation model started with model year 2000 and production ended with the 2005 model year. The second generation Neon was only available as a 4-door sedan. In some regions, including the United States, the sole engine was the 2.0 L SOHC engine, with an optional Magnum configuration (including an active intake manifold) that produced 150 hp.
The second generation was much more refined than the first generation car. It was advertised that the second generation Neon had over 1,000 refinements from the original generation. The first generation's frameless windows (which would pull away from the door in a strong crosswind) were replaced with a full-framed door. Numerous other NVH refinements led to a much quieter and enjoyable passenger car. The more refined interior and greater size did, however, come at the cost of increased weight. This, along with the discontinuance of the DOHC engine, caused the second generation car to be less competitive on the race track.
In 2001, The R/T trim returned after a one year hiatus. The R/T consisted on a new 150 horsepower SOHC Magnum 2.0 Liter Engine, 16 inch wheels, spoiler, dual chrome exhaust tips, quicker steering box and stiffer springs. The 2001 R/T had a one-year-only aircraft style spoiler -- for 2002-, the R/T models wore a rounded spoiler (a smaller version of the SRT4 wing). The Neon also offered a Sport package for the 2001 model year only. It consisted of an R/T wing, R/T 16 inch wheels, R/T springs, white instrument cluster and R/T steering box. It was an R/T visually except for the lack of dual exhaust, R/T lower mouldings, fog lamps and R/T exclusive front bumper. The Sport only came equipped with the base model's 132 horsepower engine and was available with an automatic tranmission (unlike the manual-only R/T model).
When DaimlerChrysler discontinued the Plymouth brand, the former Dodge and Plymouth Neon were briefly sold under the Chrysler name in Canada from 2000 to 2002, until being replaced by the SX2.0. In Europe, Australia, and Asia, the car has always been sold as a Chrysler, as Dodge and Plymouth marque names were not marketed there. Besides the 2.0 L engine, it also used the same Tritec 1.6 L unit found in the BMW MINI prior to 2007. The 1.6 L unit is a variation of the 2.0 L SOHC engine designed by Chrysler and built jointly by Chrysler and Rover.
Originally, the second generation Neon featured a five-speed manual transmission using the former ACR gear ratios to make up for the acceleration loss caused by greater weight. However, this hurt gas mileage and made the car noisier on the highway, and eventually the original gear ratios were restored along with the original gas mileage. A four-speed automatic made its way into the Neon in 2001, with moderately poorly set up gearing. This was improved a year later. The Neon never did get rear power windows, making do with manual rear windows and front power windows.
In an attempt to rid the car of its reputation, the Neon's name was changed to SX 2.0 in Canada in 2003, though the Neon moniker was eventually brought back. In Australia, the Chrysler Neon was discontinued in 2002, due to declining sales and expensive price compared to its competitors. In 2002, the front clip was changed to match the R/T and ACR front clip. The Neon was facelifted again for 2003 with large "crosseyed" headlights and crosshair grille. The ACR model was discontinued for 2003; the R/T model for 2005.
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