Chrysler offers incentives to dealers
Struggling Chrysler Corp. is pulling out all of the stops to reduce its massively overbuilt inventory of vehicles. Lease incentives, 0% financing, begging and pleading, whatever it takes. Consumers have typically been the targeted recipients of these incentives, until now.In a webcast to its dealers on Wednesday, Chrysler announced that it would pay dealers $200 for each 2007 model they took as long as they took their entire allocation for the months of November and December. If they take a 2006 model from the sales bank, they get $400. The dealers are free to use the cash however they want, including passing it on to the customer to move the vehicles from their already bloated inventories. Chrysler also promised dealers that they would begin building vehicles to suit demand to prevent further inventory issues in the future.
Dealer's reaction to the announcement was rather unenthusiastic. As they struggle to clear 2006 models from the lot, they are very hesitant to take more 2007's. Sometimes it's not just the financials, as many dealers are having difficulty with the physical space limitations of bringing more vehicles into inventory. One dealer, speaking on condition of anonymity, said that despite the manufacturers offer, he doesn't plan to take any more vehicles than necessary. "Our allocation isn't that high", the dealer said, "we just don't need anymore vehicles."
[Source: The Detroit News]
Reader Comments (Page 1 of 2)
DG 2:18PM (11/25/2006)
Chrysler Corp. hasn't existed since the merger. You can either call them DaimlerChrysler Corp., or refer to the American arm as Chrysler Group.
Reply
Howard Kerr 2:40PM (11/25/2006)
i read an article in this mornings paper about the sales for November. Chrysler is PROJECTED, based on various sources, to have a pretty poor November. It also said that compared to last year TOYOTA will have a poor or at least flat November '06.
I'm in the market for a small car but the offerings from DaimlerChrysler, the Dodge Caliber and the Jeep Compass don't interest me at all. Would love to be able to chose between a small sedan (2 doors would really be nice) or a compact pickup.
Reply
iQuack 2:57PM (11/25/2006)
If DCX has incentives on its new Sebring this soon after introduction, that's bad news, indeed.
Maybe some favorable reviews in the auto press will help if the Sebring is good enough, but the Sebring is certainly no Honda Civic with respect to instant enthusiasm from car buyers. Most will probably end up in rental fleets.
This is a good time to purchase a car now that most thoughts are with Christmas gift buying and dealers are overflowing with inventory.
Reply
Jason500 3:04PM (11/25/2006)
I just dont get why they produce so many damn vehicles. what is wrong with them. We bought a Honda Odyssey in August and had to wait 2 weeks for it to come in. The dealer had no inventory. The chrysler dealership was right next door. They had 44 grand caravans there. They pleaded for us to buy one, but we were annoyed by their antics and also by the vans poor fit and finish. rather than buying a loaded caravan with 6,000 off and zero per cent financing, we bought a mid level Odyssey with nothing off and 4.9% financing. But you know, we will enjoy it for 4 years, and when we want to sell it it would be worth twice as much as the caravan and we will sell it very easily.
Reply
walterbanks 3:06PM (11/25/2006)
If this merger happend in 1997, why is it that 9 years later this is the picture? what have they done for 9 years? If someone in 1997 said in 2006 you would have a market share drop of 4% (18 to 14), and bloated inventory, running debt every quarter, and dealer network going bankrupt, no one would have believed it.
WOW.
Reply
Gunderson 3:10PM (11/25/2006)
Did you guys know there is a A319 airplane decked out in corporate configuration with 40 seats that leaves detroit for stuttgart every day and returns every day?
Its like a scheduled corporate jet. If the execs need to go to germany the plane is ready to go 7Am everyday. It takes off if there is 40 passengers or even zero. 200,000 a day in plane costs. No wonder they are in a mess.
Reply
iQuack 3:26PM (11/25/2006)
A corporate jet scheduled for trips to Germany every day?
I agree that authentic Sauerbraten really is THAT good!
Reply
Howard 3:54PM (11/25/2006)
Offer me a car with windows that are more than slits and I might be interested. Guess the market can only take so much bling.
I also was at an auto row yesterday and same story. Honda and Toyota inventory low. Toyota had no Avalons or non hybrid camrys to look at or drive. Told that one could get on list to be called when new shipments arrived. GM and DC lots next door were overflowing although when I asked to see an Impala at the Chevy store I was told that they did not have any but would I be interested in looking at one of the many trucks or SUV's they had on hand. Go figure
Howard
Reply
Howard 3:58PM (11/25/2006)
" If this merger happend in 1997, why is it that 9 years later this is the picture? what have they done for 9 years? If someone in 1997 said in 2006 you would have a market share drop of 4% (18 to 14), and bloated inventory, running debt every quarter, and dealer network going bankrupt, no one would have believed it.
WOW."
In 1999 I would have believed it. My prediction at that time was that the outcome of the merger would be a disaster based on the best of Mercedes style and Chrysler engineering.
Howard
Reply
Andy 4:24PM (11/25/2006)
Supply & demand. They are a simple principle. If you are overstocked with a product, build less of it.
Reply
Katie 4:45PM (11/25/2006)
Have you ever been in a relationship where one person drools all over the other and does so much for the other? What happens? the partner drooled on gets annoyed and wants none of it. People keep looking for the hard to get partner.
Same with these companies. I am sick of Dr Z and all this Bold move garbage from Ford. I want product not begging and pleading and giving me gifts (incentives).
Reply
BOB 5:25PM (11/25/2006)
THE "SEA OF SEBRINGS" (and others) on Chrysler's lots are there because
- stupid caving in the the UAW on contracts that pay for no work, tied with huge costs of operating plants below capacity
- pretending that mediocre cars are competitive
There could also be a situation in which the bureaucrats in charge of production want to keep building, so their area's bottom line looks better, but the bureaucrats in charge of inventory had too little power and got stomped, which messes up the whole thing.
Not unlike when I was a buyer for Macys long ago, pressured to buy bad corporately sponsored imports, then stuck with the stock level.
Reply
Craig Cote 5:22PM (11/25/2006)
You reap what you sow. Why doesn't every Chrysler dealership have posted in an obvious spot that Chrysler/Dodge/ and JEEP (WW2 veterans must be rolling in their graves) are all owned by the Germans? Heaven forbid if one buys a Toyota that's built here with an American made engine and transmission along with a higher percentage of US parts than many American badged cars as well as a much higher resale value, but it's alright to purchase a vehicle loaded with Mexican parts, often made there, Mitsubishi parts, German parts, AND owned by them as well. It's as bad as GM refering to their Chevrolet division as "An American Revolution". An Army Ranger who I worked with and was totally dedicated to "buying American" and thought he'd done so when buying a Dodge Dakota, went balistic when I showed him the "made in Mexico" cast into the engine block hidden at the bottom of the block as well as the Mitsubishi alternator. Later he got to experience the pain of engine freeze plugs rotting out and leaking due to cheap materials, a problem I've never ever had with any of the numerous Toyotas I've owned. I hope Daimler/Benz does not expect him to go to one of their Chrysler dealerships when it's time for a new truck! For all you folks who still believe in Chrysler, Daimler's contemplating putting it up for sale...Go check out where EVERY PT Cruiser and Chrysler Crossfire are made! Dodge Colt? Ya right.
Reply
David1974 5:31PM (11/25/2006)
I just find all this over production as a waste of valuable resources. All the steel, tires, leather, plastics, electricity, wages, and polution that goes into making a car that nobody wants.
This is seriously messed up.
And the new Sebring does come with incentives already. it has 3.9% financing now and 1000 doolars if you bring in a camry as trade. Trust me, bring in any car and bitch and they will give you the 1000 anyway.
Reply
Cranston 5:38PM (11/25/2006)
Hmmmm. A grand, eh? Not a bad start, especially since the Sebring starts @ 18,995 MSRP for a base model(Why?).
I can get a base Optima for 16,995. A Sonata or Fusion for over 1000 less, either vehicle.
Maybe they need to Also have Chery build their larger vehicles(and not just the Hornet)?
Reply
Bill Maher is an Idiot 11:53PM (11/25/2006)
How about offering me an incentive to go to a Dodge dealer? Slash the Viper price tag by $25,000 and then it'll be a worthwhile buy.
Reply
Ryan 1:42AM (11/26/2006)
"4. I just dont get why they produce so many damn vehicles. what is wrong with them. We bought a Honda Odyssey in August and had to wait 2 weeks for it to come in."
Maybe the domestics (Chrysler does not count) should "wag the dog"
In other words: Keep production artifically low. Like the comment from above, this guy had to wait two weeks for his Honda. In the case of Honda, I'm sure it was because things are moving along.
BUT:
Say there is *legitimate* demand for the Sebring lets say 60,000 units a year they KNOW would sell.
Why not produce 50,000 and start making people wait two weeks for there cars as well.
As soon as a "domestic" starts having delays in getting cars to people, It will make news that a domestic "has something people want".
Whats the worse that could happen? They lose MORE money, big deal! Not like that does not happen every quarter with the domestics anyways.
On another note: Did you know when you are using the Google toolbar Internet spellchecker and you type the word "Camaro" it suggests the word "Camry", that's sad.
Reply
dakota 8:45AM (11/26/2006)
Before Craig decides to spew more lies:
Dakota Trucks are produced at Warren Truck Assembly in Warren MI.
4.7L V-8's and 3.7L V-6 engines are produced at Mack Avenue Engine, in DETROIT MICHIGAN.
Reply
mavkato 11:13AM (11/26/2006)
if the domestics kept supplies artificially low, they would get blasted in the press for not being able to keep up with demand.
Reply
Ryan 1:40PM (11/26/2006)
"19. if the domestics kept supplies artificially low, they would get blasted in the press for not being able to keep up with demand."
-EXACTLY, let the press have a field day with it!!!
"Dakota Trucks are produced at Warren Truck Assembly in Warren MI.
4.7L V-8's and 3.7L V-6 engines are produced at Mack Avenue Engine, in DETROIT MICHIGAN."
-Toyota builds cars in the USA also, but the profits go to Japan.
-Mopar in now German, just ask Dr. Z.
Reply