Chrysler Increases Prices. No Really.

Robert Farago
by Robert Farago

With brand new ’08 Dodge trucks going for 40 percent off sticker, and fleet sales standing between Chrysler and collapse, Auburn Hills’ decision to raise ’09 vehicle prices by $500 seems somehow… irrelevant. Which, in fact, it is. (Aside from offering a larger-looking discount to gullible customers.) The strange part of this story: Automotive News‘ [sub] decision to headline the phantom price increase– rather than Chrysler Financial’s move to raise interest rates on dealer floorplan costs (loans that finance new vehicle inventories). Even if it’s a relatively small increase (unspecified by AN), the hike will hit dealers where it hurts. With sales cratering by 34 percent in September, and no popular products in tune with the times (at least to retail customers), Chrysler dealers are already hurting. A rise in the interest rate on floorplan costs will send some dealers off the cliff. Which may be no bad thing, as far as the corporate mothership is concerned.

Robert Farago
Robert Farago

More by Robert Farago

Join the conversation
4 of 12 comments
  • VerbalKint VerbalKint on Oct 03, 2008

    They haven't even gotten their Welfare check yet and already it looks like it's the Feds who are determining their business practices... What's next? Enticing new buyers by accepting food stamps as a down payment?

  • JJ JJ on Oct 03, 2008

    Just heard a commercial on the radio about Chrysler giving away up to EUR 8000.- rebates on cars here in the Netherlands, which is quite a lot around here, eventhough the base Grand Voyager (=T&C) with the 3.8 goes for EUR 45000 somehow. The ad urged the Dutch to take advantage of the low dollar... Coincidentally, just yesterday I happened to see a new Voyager, which was the first one I've seen since the introduction of the new model.

  • Ronin Ronin on Oct 03, 2008

    The market determines the price of a vehicle, and the market is already saying the vehicle is too expensive, and therefore the vehicle does not sell. Raising the price means it sells even less. Of course, the automakers no longer care about selling vehicles. In fact, selling vehicles is an unnecessary and inconvenient expense. Because these companies no longer need to make profits, or good business decisions, or be confronted with the ramifications of their own bad decisions. Because they are not companies, they are welfare queens. And the government (read, us), will just give them free money. And the fewer cars they sell, the more free money they will therefore deserve. This is how it works, for automakers, for banks, for insurance companies, for airlines... For everybody but working Americans, who instead of getting free money, are compelled to be the ones who give free money to all those deserving welfare queen corporations. Therefore, raising the prices and selling fewer cars shows that these companies deserve more and more free money from us.

  • Powerglide Powerglide on Oct 03, 2008

    Maybe these struggling dealerships full of cars but no people could generate a little showroom traffic by offering extension classes. No other English-as-a-second-language class in town offers such cushy leather seats...