By on January 6, 2009

A TTAC commentator who wishes to remain anonymous raises a good point about Chrysler’s sales: “imagine Chrysler’s sales last month if ex-employees didn’t ‘buy’ their cars with Chrysler’s money. People who took the buyouts all got a free car as well. You know how people will ask… would you take a Chrysler car for free? (well, you still gotta pay the tax since Uncle Sam hates freebies). The answer is a resounding Yes! Because you can still flip the car for another brand and come out ahead after all the taxes. Anyway, approximately 5,000 of those Chrysler sales last month were paid for with Chrysler’s own money. Most were Wranglers, Grand Cherokees, and LX cars since those vehicles let you extract the most value out of your ‘free’ car.”

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9 Comments on “Chrysler’s “Free” Cars Inflated December Sales...”

  • avatar

    Also weren’t there deals like “buy a Ram, get a PT Cruiser for free” or some such? Were those then counted as 2 cars? Cooking the books indeed.

    Great site, been lurking for months!

  • avatar

    I don’t know if that counts as earned or unearned income, but figure about 20% on a $20k msrp. Would I pay $4000 for a Chrysler? Probably not.

  • avatar

    My understanding is that most of those employees had to turn in their heavily-discounted Chrysler lease vehicles when they took the buyout. So even with the additional purchases, there are still a similar number of Chrysler vehicles on the market.

    As a non Chrysler employee who just shelled out $25K of my own money last month for a Chrysler minivan, I am rooting for their success.

  • avatar

    Any confirmation or proof that Chrysler included these giveaway vehicles in their sales numbers, or is this just idle speculation?

  • avatar

    I could never find “Given away goods and services” in any financial documentation. So not sold cars got to go into “sold” category. There is no “abandoned” category in financial papers either.

  • avatar

    autonut: Correct me if I’m wrong, but the SEC doesn’t require a “cars sold” category on financial statements either. It’s more things like “income from operations.”

    Not to mention, Chrysler isn’t required to file ANYTHING with the SEC anymore, so there’s no financial papers to speak of.

    Any public listing of car sales numbers is, as far as I know, completely voluntary, and subject only to the standards of the individual company. And, also as far as I know, there’s always a lot of hanky panky about what gets counted and when it gets counted.

    In any case, the more I think about it, the less it matters… either they cooked the books to make it look like the “only” dropped 40%, or they left them off to make their situation look dire to gain sympathy. Either way, you can spin it to make Chrysler look bad, which is only fitting, because giving away cars just to get rid of them IS bad.

  • avatar

    Chrysler gave employees who quit the company either $75K or $100K of which $25K was a voucher to only be used to buy a NEW Chrysler product from dealer inventory. If you didn’t use up the full $25K you were still taxed as if you did so it was to everyone’s advantage to spend all of it.

    So to say that the sales weren’t legit is questionable since the employees were using money they “earned” and were taxed on when the quit the company. So Chrysler sold 5,000 cars with income their employees earned by not ever working for Chrysler again.

  • avatar

    So @5,000 cars given as early retirement incentives out of 1,450,000 plus sold. That’s like what, a .00000689% difference?

    Did anybody hear that Toyota is shutting down production in Japan for 11 days? This includes cars made there to be sold here (yes Virginia, they’re not all “transplants”).

  • avatar

    I do like the picture. So apropos.

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