Chrysler comeback fizzling?(employee discount coming back)+30day Money Back Guarantee
02-10-06, 06:16 AM
#1
Super Moderator
Thread Starter
Chrysler comeback fizzling?(employee discount coming back)+30day Money Back Guarantee
Detroit's strongest automaker may have to cut production as more vehicles languish at dealerships.
Brett Clanton / The Detroit News
CHICAGO -- Chrysler has defied Detroit's downturn in the past two years -- gaining market share and earning solid profits -- but there are growing signs that its comeback may be starting to sputter.
After weaker sales in recent months, Chrysler, Dodge and Jeep vehicles are piling up on dealer's lots, taking nearly three months on average to sell.
On Wednesday, a top company executive said the automaker may need to cut factory production to cope with the surplus.
"We have more inventory than we'd ideally like," said Joe Eberhardt, executive vice president of marketing for DaimlerChrysler AG's Chrysler Group, after a news briefing at the Chicago Auto Show. "And we'll work with our dealers over the next couple of months to resolve that."
Chrysler will consider "adjusting production schedules" if stockpiles remain high, he said. Chrysler and its dealers ended January with a stockpile of 550,000 cars and trucks, down from 597,000 at the end of December.
Production cuts would be a setback for Chrysler, which has outperformed its Detroit rivals for two years on the strength of new vehicles such as the Chrysler 300C sedan.
Chrysler is the only one of Detroit's three automakers that is earning money on its car and truck business, with operating profits up 6 percent to $1.3 billion through the first three quarters of 2005. The company will report fourth-quarter 2005 results next week.
But Eberhardt's comments come amid increasing questions about the sustainability of the automaker's comeback.
Despite a string of wins following a three-year turnaround that shed about 40,000 jobs, Chrysler is beginning to show signs of weakness, according to some industry observers.
"They're still doing better than the other two Detroit automakers," said Jesse Toprak, chief auto market analyst for Edmunds.com. "But it appears they've lost a little momentum from last year."
In January, Chrysler vehicles sat on dealer lots for an average of 82 days before selling, the longest of any automaker, according to Edmunds data. The industry average was 58 days.
Also in January, after sales declines in November and December, Chrysler increased spending on rebates to woo buyers. In January, Chrysler shelled out an average of $4,191 per vehicle, up more than $1,000 since October and the highest of all major automakers, Edmunds said.
For the first time, the company is also providing discounts as high as $1,000 on the 300 in some markets. And some new vehicles such as the Dodge Dakota pickup and Magnum wagon have not been hot sellers.
Chrysler does not publicly provide details about its incentive spending but disputes claims that it has significantly raised rebates in recent months.
Company officials also downplay suggestions that high inventory levels or recent sales declines are signs its comeback is in trouble.
"There's no ***** in the armor here," said Jason Vines, a Chrysler spokesman.
Chrysler dealer Jim Kempthorn, however, said the automaker's rising inventories are a major concern. As the glut grows, dealers have been asked to accept more vehicles, which they don't always want or need.
"There has been a constant push," said the owner of Kempthorn Chrysler Plymouth in Canton, Ohio. "Now we are telling them we are full. We really need to get this inventory under control, but it's a real struggle. The people just aren't out there -- they aren't buying."
In December, Chrysler offered its dealers up to $750 for every extra vehicle they ordered during a year-end clearance sale.
And last month, the automaker introduced an incentive program that offers buyers zero-percent interest loans for 60 months on most of its vehicle lineup.
But if Chrysler needs to go further to clear out surplus vehicles, then it should consider all options open, said Chuck Fortinberry, a dealer at Clarkson Chrysler-Jeep.
"If they have to take a little production out so we can clear out the inventory and get the flow going," he said, "then that's a good thing."
Chrysler will introduce 10 vehicles this year, including the Dodge Caliber hatchback and Chrysler Aspen SUV.
Company officials said the new vehicles should bring improved sales in coming months.
source : detnews
Brett Clanton / The Detroit News
CHICAGO -- Chrysler has defied Detroit's downturn in the past two years -- gaining market share and earning solid profits -- but there are growing signs that its comeback may be starting to sputter.
After weaker sales in recent months, Chrysler, Dodge and Jeep vehicles are piling up on dealer's lots, taking nearly three months on average to sell.
On Wednesday, a top company executive said the automaker may need to cut factory production to cope with the surplus.
"We have more inventory than we'd ideally like," said Joe Eberhardt, executive vice president of marketing for DaimlerChrysler AG's Chrysler Group, after a news briefing at the Chicago Auto Show. "And we'll work with our dealers over the next couple of months to resolve that."
Chrysler will consider "adjusting production schedules" if stockpiles remain high, he said. Chrysler and its dealers ended January with a stockpile of 550,000 cars and trucks, down from 597,000 at the end of December.
Production cuts would be a setback for Chrysler, which has outperformed its Detroit rivals for two years on the strength of new vehicles such as the Chrysler 300C sedan.
Chrysler is the only one of Detroit's three automakers that is earning money on its car and truck business, with operating profits up 6 percent to $1.3 billion through the first three quarters of 2005. The company will report fourth-quarter 2005 results next week.
But Eberhardt's comments come amid increasing questions about the sustainability of the automaker's comeback.
Despite a string of wins following a three-year turnaround that shed about 40,000 jobs, Chrysler is beginning to show signs of weakness, according to some industry observers.
"They're still doing better than the other two Detroit automakers," said Jesse Toprak, chief auto market analyst for Edmunds.com. "But it appears they've lost a little momentum from last year."
In January, Chrysler vehicles sat on dealer lots for an average of 82 days before selling, the longest of any automaker, according to Edmunds data. The industry average was 58 days.
Also in January, after sales declines in November and December, Chrysler increased spending on rebates to woo buyers. In January, Chrysler shelled out an average of $4,191 per vehicle, up more than $1,000 since October and the highest of all major automakers, Edmunds said.
For the first time, the company is also providing discounts as high as $1,000 on the 300 in some markets. And some new vehicles such as the Dodge Dakota pickup and Magnum wagon have not been hot sellers.
Chrysler does not publicly provide details about its incentive spending but disputes claims that it has significantly raised rebates in recent months.
Company officials also downplay suggestions that high inventory levels or recent sales declines are signs its comeback is in trouble.
"There's no ***** in the armor here," said Jason Vines, a Chrysler spokesman.
Chrysler dealer Jim Kempthorn, however, said the automaker's rising inventories are a major concern. As the glut grows, dealers have been asked to accept more vehicles, which they don't always want or need.
"There has been a constant push," said the owner of Kempthorn Chrysler Plymouth in Canton, Ohio. "Now we are telling them we are full. We really need to get this inventory under control, but it's a real struggle. The people just aren't out there -- they aren't buying."
In December, Chrysler offered its dealers up to $750 for every extra vehicle they ordered during a year-end clearance sale.
And last month, the automaker introduced an incentive program that offers buyers zero-percent interest loans for 60 months on most of its vehicle lineup.
But if Chrysler needs to go further to clear out surplus vehicles, then it should consider all options open, said Chuck Fortinberry, a dealer at Clarkson Chrysler-Jeep.
"If they have to take a little production out so we can clear out the inventory and get the flow going," he said, "then that's a good thing."
Chrysler will introduce 10 vehicles this year, including the Dodge Caliber hatchback and Chrysler Aspen SUV.
Company officials said the new vehicles should bring improved sales in coming months.
source : detnews
04-30-06, 01:33 PM
#3
Pole Position
I just recently found this and thought it'd be interesting to share.....
Chrysler 300 Driving Chrysler Brand Success
Thursday April 27, 10:12 am ET
AUBURN HILLS, Mich., April 27
PRNewswire-FirstCall --
Big news from Dodge and Jeep® has overshadowed Chrysler-branded vehicles in recent months, but that's about to change.
U.S. sales of the Chrysler 300 surpassed the 300,000 mark in April 2006, making it the quickest Chrysler brand vehicle to reach the milestone in 25 months. This comes on the heels of another Chrysler brand achievement: global sales of the Chrysler PT Cruiser exceeded one million units in March.
In 10 years, Chrysler brand sales in the U.S. have increased 144 percent from 265,897 units in 1995 to 649,293 units, making 2005 the brand's best sales year in company history. Since its introduction in March 2004, the Chrysler 300 has powered the Chrysler brand to new sales heights; first quarter Chrysler brand sales increased 32 percent to 162,888 units compared to first quarter 2004 sales of 123,460 units.
"The Chrysler Group is firing on all cylinders," Gary Dilts, Chrysler Group Senior Vice President - Sales, said. "In addition to the growth of the Chrysler brand, the all-new 2006 Dodge Caliber is moving out of dealer showrooms at a brisk pace. The Jeep family is growing with the recent introduction of the 2007 Jeep Compass and Jeep Patriot. We have a strong product lineup going into the spring and summer selling seasons."
With the introduction of the Chrysler 300, the Chrysler Group revived the rear-wheel-drive (RWD) sedan after a 15-year hiatus. In addition, the legendary HEMI® engine returned to the Chrysler brand after nearly 50 years with the debut of the Chrysler 300C. Personifying the image of new American muscle, the Chrysler 300 earned the title of the most-awarded new car in automotive history in 2005.
However, the Chrysler brand is always looking to improve. Coming later this year, the 2007 Chrysler 300 Long Wheelbase will feature a wheelbase that is six inches longer than the current model, providing more than 46 inches of rear legroom and an additional 10.2 cubic feet of interior space. This extended Chrysler 300 is expected to attract sales from the limousine industry, as well as retail customers.
"The Chrysler brand's forward-thinking vehicle designs continue to resonate well with the public and are some of the most desired in the marketplace," Dilts said. "With a portfolio lineup to accommodate almost every vehicle price segment, the performance, luxury and affordability of Chrysler brand vehicles continues to stand out."
Source: Chrysler Group
Chrysler 300 Driving Chrysler Brand Success
Thursday April 27, 10:12 am ET
AUBURN HILLS, Mich., April 27
PRNewswire-FirstCall --
Big news from Dodge and Jeep® has overshadowed Chrysler-branded vehicles in recent months, but that's about to change.
U.S. sales of the Chrysler 300 surpassed the 300,000 mark in April 2006, making it the quickest Chrysler brand vehicle to reach the milestone in 25 months. This comes on the heels of another Chrysler brand achievement: global sales of the Chrysler PT Cruiser exceeded one million units in March.
In 10 years, Chrysler brand sales in the U.S. have increased 144 percent from 265,897 units in 1995 to 649,293 units, making 2005 the brand's best sales year in company history. Since its introduction in March 2004, the Chrysler 300 has powered the Chrysler brand to new sales heights; first quarter Chrysler brand sales increased 32 percent to 162,888 units compared to first quarter 2004 sales of 123,460 units.
"The Chrysler Group is firing on all cylinders," Gary Dilts, Chrysler Group Senior Vice President - Sales, said. "In addition to the growth of the Chrysler brand, the all-new 2006 Dodge Caliber is moving out of dealer showrooms at a brisk pace. The Jeep family is growing with the recent introduction of the 2007 Jeep Compass and Jeep Patriot. We have a strong product lineup going into the spring and summer selling seasons."
With the introduction of the Chrysler 300, the Chrysler Group revived the rear-wheel-drive (RWD) sedan after a 15-year hiatus. In addition, the legendary HEMI® engine returned to the Chrysler brand after nearly 50 years with the debut of the Chrysler 300C. Personifying the image of new American muscle, the Chrysler 300 earned the title of the most-awarded new car in automotive history in 2005.
However, the Chrysler brand is always looking to improve. Coming later this year, the 2007 Chrysler 300 Long Wheelbase will feature a wheelbase that is six inches longer than the current model, providing more than 46 inches of rear legroom and an additional 10.2 cubic feet of interior space. This extended Chrysler 300 is expected to attract sales from the limousine industry, as well as retail customers.
"The Chrysler brand's forward-thinking vehicle designs continue to resonate well with the public and are some of the most desired in the marketplace," Dilts said. "With a portfolio lineup to accommodate almost every vehicle price segment, the performance, luxury and affordability of Chrysler brand vehicles continues to stand out."
Source: Chrysler Group
04-30-06, 06:15 PM
#4
Lexus Champion
They're introducting 10 vehicles this year? Sounds like they're taking the Mercedes approach and INVENTING spots in the automotive market to cover, but we'll see. I can really only think of 2-3 vehicles off the top of my head.
They do take that American approach by filling up their lot, but if they're going to do that, then they need to either put fully-optioned cars out there, or give the dealer less and take more special orders.
They do take that American approach by filling up their lot, but if they're going to do that, then they need to either put fully-optioned cars out there, or give the dealer less and take more special orders.
04-30-06, 06:26 PM
#5
When you look at it, their cars are really an strange lineup
- Caliber
- PT Cruiser
- Sebring
- 300
- Pacifica
Where is an true Corolla and true Camry competitor? How do you think you can sustain your market share by offering a lot of essentially niche vehicles.
What Chrysler did right is not fight the imports on their own turf, but offering something unique - the 300. However, the should have built on the top of that sucess and offer some really good competitors in Corolla and Camry class.
- Caliber
- PT Cruiser
- Sebring
- 300
- Pacifica
Where is an true Corolla and true Camry competitor? How do you think you can sustain your market share by offering a lot of essentially niche vehicles.
What Chrysler did right is not fight the imports on their own turf, but offering something unique - the 300. However, the should have built on the top of that sucess and offer some really good competitors in Corolla and Camry class.
04-30-06, 07:12 PM
#6
Lexus Fanatic
Originally Posted by 1SICKLEX
With Toyota/Lexus, WASTE is probably their biggest issue, and cars sitting on dealer lots is waste to them. They must have lean production, that is what makes Toyota so successful. They rarely ever have cars sit on lots like the Americans do.
http://www.koonsinternet.com/jp/koons-2.jpg
( I went to high school, BTW, in many of the same classes, with the guy that owns the place...Jim Koons.....but I rarely see him ).
Chrysler, though, like Ford and GM, addresses the cars-in-stock problem with rebates...something that Toyota, while not completely detached from, uses much less often.
Last edited by mmarshall; 04-30-06 at 07:42 PM.
05-01-06, 07:19 AM
#7
Guest
Posts: n/a
Originally Posted by mmarshall
Come on up to Northern Virginia and take a look at Koons Tysons Toyota....just a couple miles from my house. It looks like the Pentagon parking lot. It is one of the 10 largest dealers in the nation. The sales, service, parts, and clean-up departments are all busier than a w * * * e house on Friday night.
http://www.koonsinternet.com/jp/koons-2.jpg
( I went to high school, BTW, in many of the same classes, with the guy that owns the place...Jim Koons.....but I rarely see him ).
Chrysler, though, like Ford and GM, addresses the cars-in-stock problem with rebates...something that Toyota, while not completely detached from, uses much less often.
http://www.koonsinternet.com/jp/koons-2.jpg
( I went to high school, BTW, in many of the same classes, with the guy that owns the place...Jim Koons.....but I rarely see him ).
Chrysler, though, like Ford and GM, addresses the cars-in-stock problem with rebates...something that Toyota, while not completely detached from, uses much less often.
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06-22-06, 05:56 AM
#8
Return of Employee Pricing
Chrysler to Offer 'Employee Pricing' in July
First shot in possible incentives war is needed to clear out unsold cars.
June 22, 2006; Posted: 12:24 a.m. EDT (0424 GMT)
DETROIT (Reuters) - Chrysler Group, a unit of DaimlerChrysler, will roll out a new program of discounted vehicle pricing in July in a move intended to clear a glut of unsold 2006 models, the company said on Wednesday.
Automotive News, an industry trade journal, quoted dealers and other unnamed industry representatives who had been briefed on the plan as saying Chrysler would become the first of the Detroit-based automakers to offer employee-level pricing at the peak of the busiest sales season.
That would mark an escalation of the brewing price war in U.S. auto showrooms and put increased pressure on Ford Motor Co. and General Motors Corp., Chrysler's larger rivals, to follow suit, analysts said.
It could save consumers hundreds or even thousands of dollars on new car purchases since employee-level pricing is typically several percentage points below the standard dealer's invoice, one analyst said.
Such discounting proved popular with car buyers when GM introduced it in June last year, forcing Chrysler and Ford to follow suit for July, August and September.
But investors and Wall Street analysts have watched such sales programs with concern since they sacrifice profit margin for sales volume and force consumer attention back to cut-rate deals, a move seen as tarnishing U.S. auto brands.
A Chrysler spokesman confirmed that the company was readying a new sales promotion program to become effective on July 1, but declined further comment. "The details have not been locked down and finalized yet," Chrysler spokesman Kevin McCormick said.
Incentives
Chrysler has struggled with high inventory levels this year, prompting it to offer the richest consumer discounts of any of the U.S. automakers, particularly on its slower-selling trucks and SUVs.
The reliance on customer rebates and incentives cut Chrysler's first-quarter earnings by more than half.
At the end of May, Chrysler had a 77-day supply of vehicles in inventory, the company has said, above the two-month supply that it has targeted as a more desirable level.
In May, Chrysler announced a zero-percent financing offer for new car and truck buyers, and also asked dealers to take more vehicles for both May and June.
One analyst said employee-level pricing would be a natural extension of Chrysler's efforts so far this year to generate showroom traffic and reduce its reliance on less profitable sales to rental-car agencies and commercial fleets.
"All the signs pointed to them putting on a new discount program," said Jesse Toprak, an analyst with industry tracking service, Edmunds.com. "I think Ford will be first to retaliate, rather than GM, just because of their own excess inventory and lack of new product."
In the first five months of the year, DaimlerChrysler U.S. sales were down 1 percent -- better than the steeper declines recorded by GM and Ford, but far short of the gains of almost 9 percent recorded over the same period by Toyota Motor Co. <7203.T> and Honda Motor Co.
Last edited by GS69; 06-22-06 at 07:12 AM.
Lame.
06-22-06, 02:34 PM
#11
Speaks French in Russian
It's Back!! - Chrysler starts summer with employee-discount program
Chrysler starts summer with employee-discount program
DETROIT -- The Chrysler group has fired the first shot of the summer selling season with an employee-discount program for consumers beginning July 1.
The company's Employee Pricing Plus discount plan was announced to dealers in sales meetings Wednesday, say dealer and industry sources.
The program, essentially the same as the one the automaker ran last summer, allows all customers to buy Chrysler group vehicles at the same heavily discounted prices available to Chrysler group employees.
Last summer, General Motors started the employee-pricing war in June, and Ford and the Chrysler group followed in July. The bloody discounting war between the Detroit 3 carried on through September.
Last week, Chrysler group CEO Tom LaSorda said the company needed to do something to make room for new vehicles arriving in dealerships this fall. Chrysler dealers have complained they are carrying excessive inventories, particularly of big trucks and SUVs.
Jonathan Steinmetz, an analyst for Morgan Stanley, predicted last week that the Chrysler group would be the first to launch such a program this summer. In a research note to investors, Steinmetz wrote that a move by Chrysler could test GM’s pricing discipline.
"Such a move suggests other OEMs continue to view GM's new-found price discipline as a chance to grab market share rather than lift prices," he wrote.
A Chrysler spokesman declined to confirm or deny the plan.
The company's Employee Pricing Plus discount plan was announced to dealers in sales meetings Wednesday, say dealer and industry sources.
The program, essentially the same as the one the automaker ran last summer, allows all customers to buy Chrysler group vehicles at the same heavily discounted prices available to Chrysler group employees.
Last summer, General Motors started the employee-pricing war in June, and Ford and the Chrysler group followed in July. The bloody discounting war between the Detroit 3 carried on through September.
Last week, Chrysler group CEO Tom LaSorda said the company needed to do something to make room for new vehicles arriving in dealerships this fall. Chrysler dealers have complained they are carrying excessive inventories, particularly of big trucks and SUVs.
Jonathan Steinmetz, an analyst for Morgan Stanley, predicted last week that the Chrysler group would be the first to launch such a program this summer. In a research note to investors, Steinmetz wrote that a move by Chrysler could test GM’s pricing discipline.
"Such a move suggests other OEMs continue to view GM's new-found price discipline as a chance to grab market share rather than lift prices," he wrote.
A Chrysler spokesman declined to confirm or deny the plan.
06-22-06, 02:39 PM
#12
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GM is offering $1.99/gallon gas for a year with a purchase of a new car... Not sure if its all cars or not, but i've heard the commercial on the radio several times already.
06-22-06, 03:18 PM
#14
Super Moderator
I used to work at a Fortune 500 company down here and used to assist on some of the fleet purchase and analysis as part of my strategic planning duties.
We came up with the idea to partner with our fleet company, one of the big three, and arranged to offer vehicles at the employee-discounted prices similar to above. The auto company was also hoping to unload their SUVs, but unfortunately for them most people bought the lowest end vehicles they could get. In the U.S., high gas prices are the problem, but here we have this awful tenencia, a vehicle use tax, that is like paying a registration fee that ranges from $20 USD up to $5,000 USD per year.
We came up with the idea to partner with our fleet company, one of the big three, and arranged to offer vehicles at the employee-discounted prices similar to above. The auto company was also hoping to unload their SUVs, but unfortunately for them most people bought the lowest end vehicles they could get. In the U.S., high gas prices are the problem, but here we have this awful tenencia, a vehicle use tax, that is like paying a registration fee that ranges from $20 USD up to $5,000 USD per year.