Chrysler Revives The Sales Bank
An eye-watering death scent surrounds Chrysler going into this week. With a last-ditch bailout likely to focus on GM, and even the hometown cheerleaders kicking around the idea of throwing ChryCo in the volcano, Auburn Hills has all but given up on trying to staunch the flow of bad news. Of all the Chrysler-related bad news, nothing jumps out like the persistent rumors of Pentastar dealers offering two-for-one deals on Auburn Hills Iron. We first heard of this happening in the UK with overstock Avengers, but the phenomenon is spreading to the states. Automotive News [sub] reports that If you buy a 2008 Dakota for $27,590 at Bettenhausen Dodge in Tinley Park, Ill, Mr Bettenhausen will throw in a lightly-used 08 PT Cruiser for your trouble. “The automotive business is no longer about how much money you can make,” says the Bettenhausen. “It’s about minimizing losses. We need to get ourselves to a breakeven point in this challenging market.” Especially when Chrysler’s right there to twist the knife. Automotive News [sub] reveals that the Chrysler Sales Bank is back to plague dealers with yet more inventory they can’t sell and don’t want.
Chrysler’s Jim Press told a dealer conference call that “your district managers will be calling you to try to sell one of the 12,000” units of unassigned inventory. Oh yeah, and have a very happy holidays. Give the wife my love.
The last time Chrysler introduced a Sales Bank it was choking on a 91-day supply (then 647k units) leading up to the breakup of DCX. This time around, Chrysler’s inventory is considerably lower (400k units), but production can’t be slowed fast enough to keep up with falling sales.
Auburn Hills is predicting 74,000 retail sales this month and only 55,000 in January, with fleet sales remaining undisclosed (although technically non grata per the Press doctrine). This means the 400k surplus translates into a 117-day supply, worse even than the slow summer of 2006.
Will Cerberus sit on its hands while the numbers decline to the point where they make the Daimler days look rosy? Will there be anything to bailout by the time Bush makes a call? The fat lady is warming up her vocal cords…
More by Edward Niedermeyer
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A Ford dealer in Denver has been pitching 2-for-1 deals for years now. I haven't bothered to read the fine print, but I suppose it includes less desirable lease returns at full price for the most expensive vehicle. But I could never find two Fords I wanted...
http://www.allpar.com/news/ Dodge “twofer” deal details December 15th, 2008 by DaveAdmin Some time ago, a dealer offering “two for the price of one” made national news, with some outlets scoffing at the apparent worthlessness of Chrysler vehicles. A new Automotive News article, however, shows that the discounts are not nearly as deep as one would expect. Bettenhausen Dodge of Tinley Park, Illinois started a “buy two cars for the price of one” promotion in October; customers could get a new car and a specific used car as a package. For example, buyers of a new $27,590 Dodge Dakota - a vehicle that was especially hard hit in sales - would include a 2008 PT Cruiser with 17,700 miles. The customer would pay the list price on the Dakota, passing up nearly $11,000 in dealer incentives and customer rebates; the PT Cruiser’s sticker price was around $11,000. Together, then, the savings were around $5,300, which is in the realm of skilled customer bargaining. Unfortunately for the dealership, their primary sales block - lack of credit for customers - remains, and the promotion, though it garnered considerable publicity outside of their selling area, has not had the expected impact on sales. Also: Return of the sales bank December 15th, 2008 by DaveAdmin With sales falling faster than Chrysler has been able to cut production, the sales bank has apparently been brought back, at least temporarily. According to Jim Press, as quoted by Automotive News, there are 12,000 units of “unassigned inventory” - vehicles produced without an order from dealers. Many of these may be Durangos and Aspens produced by the Newark, Delaware plant, which reportedly closes at the end of the week; the plant is the sole source of these vehicles, including hybrid versions. Chrysler is predicting 74,000 retail sales in December 2008 and just 55,000 retail sales in January 2009.