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]

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