• Nov 25th 2006 at 1:26PM
  • 21
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]

I'm reporting this comment as:

Reported comments and users are reviewed by Autoblog staff 24 hours a day, seven days a week to determine whether they violate Community Guideline. Accounts are penalized for Community Guidelines violations and serious or repeated violations can lead to account termination.

    • 1 Second Ago
      • 8 Years Ago
      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.
      • 8 Years Ago
      Those of us who "knew" knew this would happen, that was at the start. No surprises.
      • 8 Years Ago
      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.
      • 8 Years Ago
      "4.7L V-8's and 3.7L V-6 engines are produced at Mack Avenue Engine, in DETROIT MICHIGAN."

      I read an article about the success of the Hemi engine and that was being built in Mexico I think. So that's probably what was in the truck.

      You know we live in a progressively more global economy. The software I work on is used in Europe as well as here. (And work on the next version is being partly outsourced to India! But I'm still here so far :)

      • 8 Years Ago
      Supply & demand. They are a simple principle. If you are overstocked with a product, build less of it.
      • 8 Years Ago
      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)?

      • 8 Years Ago
      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.
      • 8 Years Ago
      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.
      • 8 Years Ago
      " 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.

      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.

      • 8 Years Ago
      It's a strange problem, I think. And also one that seems easily rectified.

      The way it is now it's like there's no production control whatsoever.

      Surley it can't be that hard to establish a bit more contact between the production and sales depatements.

      It's simple mathematics, when selling less you have to tighten production. This is the way all of the overseas manufacturers do it and they appear to be alright much because of this tactic.

      The big 2.5 seem to measure success only by how many units they produce, not how many they sell. That's backwards reasoning if I ever heard one.
      • 8 Years Ago
      " read an article about the success of the Hemi engine and that was being built in Mexico I think. So that's probably what was in the truck."

      5.7L won't fit in the Dakota unless there is a suspension change.
      • 8 Years Ago
      I am surprised that no one has mentioned 2 important reasons why Chrysler has too much inventory. First, the spike in gasoline prices hurt hemi and smaller V8 sales even though the EPA highway rating of the Hemi is 25 mpg in their big sedans. Second, and more significantly, they were optimistically trying to stay ahead of Toyota in unit sales. Note that in October, 2006, even without a mid-sized entry [they didn't promote and sold out early the old Sebring and Stratus sedans], Toyota only outsold Chrysler by 9,000 vehicles. This is less than sales of new Sebring and Avenger models would be. Something to think about.
    • Load More Comments
    Share This Photo X