Chrysler adds dealer incentives to clear stock

Automaker offering richest discounts of Big Three to knock down inventory

DETROIT - Chrysler Group is offering its U.S. dealers incentives of up to
$1,250 per vehicle sold this month and next in order to clear excess
inventory in the run-up to the summer car shopping season, dealers said
Monday.

Chrysler has struggled with high inventory levels this year, prompting the
unit of Germany's DaimlerChrysler AG to offer the richest consumer discounts
of any of the domestic automakers.

The reliance on customer rebates and incentives cut Chrysler's first-quarter
earnings by more than half, even though the automaker has scored with some
top-selling vehicles and avoided the losses and erosion of market share that
have plagued both General Motors Corp. and Ford Motor Co., the other members
of Detroit's Big Three.



At the end of April, Chrysler had an 80-day supply of vehicles in inventory,
the company has said, above the two-month supply that it has targeted as a
more desirable level.

On average, Chrysler offered a consumer discount of $3,769 in the first four
months of the year, more than the $3,189 offered by Ford or the $3,050 by
GM, according to industry tracking service Autodata.

Chrysler, which last week announced a zero-percent financing offer for new
car and truck buyers, also asked dealers to take more vehicles for May and
June, a move that would cut into its own unsold inventory of over 586,000
vehicles as of the end of April.

Dealers that accept the additional vehicle shipments and meet sales quotas
can receive cash of up to $1,250 per sale, dealers presented with the offer
said.

It was the second dealer incentive program that Chrysler has rolled out this
year, leaving some dealers uncertain of whether they would be better off
carrying the additional inventory.

The move comes at a time when higher interest rates have also boosted the
cost of holding dealer stocks of unsold cars, traditionally one of the
largest single costs for showroom operators.

"Obviously, they've got a problem and we've got a problem," said Jim Corwin,
owner of Corwin Chrysler-Jeep in Hickory, Pennsylvania. "It's getting to the
point where I think we're all busting at the seams at the dealer level."

Corwin said that he had benefited from Chrysler's earlier dealer incentive
program but was still working to sell down about half of the additional
vehicles he had taken on.

Dealers were positive about the potential boost from Chrysler's offer of
zero-percent financing through July 5.

"The zero percent really moves iron," said Alan Helfman, the manager of
River Oaks Chrysler-Jeep in Houston.

Helfman said he was still considering whether to take Chrysler's offer of
cash payments for accepting additional vehicles this month.

Dealers that did not accept the offer could be undercut by others in the
same geographic market, who would use the additional cash back to drive down
prices on a range of vehicles, he said.

"It's very tough if you don't do it," Helfman said. "You're at a heck of a
disadvantage."

 

When we were considering minivans we considered the Chrysler, Toyota and
Honda. Even with the rebates, the high list price on the Chrysler was still
excessive compared to the Honda. That plus some incompetent work by the
service dept at Chrysler enticed me to buy some place else.

 

Where are you located as this doesn't seem to be the case in upstate NY.
A Honda or Toyota van around here runs more than 30K well equipped and
you can get Chryslers for 24K or even less.


Matt

 

I'm in NC. My wife wanted leather, and 3 power doors. Honda was cheapest
of the 3. An even better deal on the Honda is if you can skip the power
rear door. I don't remember the list on the EX-L now but with $3k discount
(no trade and no financing to confuse the deal) it is a bargain. Honda
sells a ton of minivans here. I bet there are 12 or more parked in garages
on my block alone. Chysler/Dodge is next and there are a few Toyotas.

 

discount

Are you in the wrong group?

Ted

 

If the OP's post was appropriate, then a response that indicates what
true total cost might be on a comparitive basis is also appropriate.

I monitor both groups. I own two Chrysler products and two Honda
products. My 99 T & C would have been a Honda had they offered leather
as a factory option at the time. Chrylser won because they did a good
job with trim level management. Honda did not, at least at that time.

Frank

 

My point was that incentives as mentioned by the op are nice but check the
minivan list prices before buying.

 

Sorry to hear. I'm luck that I have a good service department should I need
them again.

I still am giving the 300C some serious thought but I'm not thrilled about
that large grill. In addition, I saw a *expanded* 300C at the NY car show
and Chrysler is looking to expand into the Limo type service. The extended
300C will have additional leg room plus to light desks? that come out of the
back seat (like an airplane) to give the back seaters a place to use their
laptop. I don't know about anyone else but there's something about having a
car that is either being used by the Police/Fire/Ambulance/Taxi or Limo that
makes it undesirable to me.

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

I'm surprised that the Chrysler came out to be more considering the rebates.
Did you compare them equally as possible with options?

Ken

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

I wish Chrysler would do better on the incentives with the 300C but I guess
they're really selling well. I notice the Pacifica has about $4K to $5.5K on
incentives. Guess they're not really selling well. I would purchase one if
they had a Hemi as an option. I like the vehicle but I hear the vehicle is
underpowered.

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

Yes. I was surprised too. The Honda is a heck of a deal unless you need the
middle seats that fold back flat into the floor. Only Chrysler has that
feature available.

 

I see quite a few Pacifica's on the road here. It took a while but they
seem to be selling decently here.

 

You can replace the grill fairly cheaply with many nice alternatives. In
fact the dealers here often show them with different grills (at big mark ups
though).

 

They're ugly, though, and not something you'd get so passionate about. Hence
the big incentive.

 

Well, you gotta look at what else comes in a "Long" version. The Lincoln
Town Car does, and the BMW 745 does also. I'll bet they don't mind being
compared to the BMW at least. Price-wise, it competes with the town car, but
looks-wise, it may be more like the much more expensive BMW. I'm not sure
what else is out there that has an expanded version. There might be others.

It's not a new or unique idea. Just something that works in that segment.

 

I don't think it's the looks but rather the report about the engine but
that's just my opinion.

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

Yea, I did see a few but I wish they wouldn't have made it so large. It's
okay. It took time for me to even consider it.

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

I've never seen the BMW but see many Lincolns. I know what you mean though
because some of these limos are: Hummers; Lincolns;Cadillac's; etc.

I asked the Chrysler representative at the show if Chrysler was going to
offer this really nice White paint as an option for the 300C but he wasn't
sure. It was really a nice white. Like the Toyota/Lexus and Buick and
Cadillac type.

--
"Now Phoebe Snow direct can go
from thirty-third to Buffalo.
From Broadway bright the tubes run right
Into the Road of Anthracite"
Erie - Lackawanna

 

I'm not talking about a limo. I'm talking about a factory model that's
simply 6" longer, and all that stretch in the back seat.

The BMW 7-series V-8 has been available like that forever. That's what the
L is for in 740iL. There's also a Jaguar XJ8L and again, L is for "long"
version. Lincoln offers a 6" longer town car.

My point is, a longer 300 won't be alone in the marketplace. It'll sell.
If nothing else, four guys going to the golf course can fit in it.

 

Got it.