Despite already having some of the highest incentives in the game right now, Chrysler is joining GM in putting more cash on the hood to clear out year-end inventory. Automotive News [sub] reports that Chrysler will be adding $1,000 to $1,500 in incentives per vehicle, on top of October’s $3,219 per vehicle average (as calculated by Edmunds). According to the same Edmunds analysis, the average industry incentive is $2,468 per vehicle. This continued reliance on incentives contradicts a number of Sergio Marchionne’s statements at the presentation of Chrysler’s five year product and business plan, in which he argued that Chrysler could not rely on incentives to push volume. Marchionne claims to believe the incentive-based volume chasing is “insane,” but his commitment to a sustainable business plan is about to be tested. For Chrysler’s five year plan to succeed, its sales need to turn around fast, making 2009 the trough year indicated on this graph. But with no new product (and by new product, we mean refreshed product) due out until the fourth quarter of next year, such a turnaround seems impossible without huge incentives. And yet Chrysler also showed graphs projecting a direct relationship between volume and profit, meaning there is little to no wiggle room for profit-sapping incentives. Rock, hard place, I’d like you to meet Chrysler Group.
Find Reviews by Make: