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."
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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.

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Art wrote:

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
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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.

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discount
Are you in the wrong group?
Ted
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On Wed, 17 May 2006 03:22:21 -0700, "Ted Mittelstaedt"

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

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

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snipped-for-privacy@mindspring.com says...

And it is a very nice feature to have. ------------ Alex
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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.
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I see quite a few Pacifica's on the road here. It took a while but they seem to be selling decently here.

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They're ugly, though, and not something you'd get so passionate about. Hence the big incentive.
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I don't think it's the looks but rather the report about the engine but that's just my opinion.
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snipped-for-privacy@Scranton.com says...

I looked at one and was going to consider it until I tried to sit in the thrid row. I'm not tall, 5'7", and I was hitting the cieling with my head. The third row is useless for adults. Maybe little kids can use it. ------------------ Alex
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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.
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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).

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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.
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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.
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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.
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