Chrysler Won't Pay Dealers for New Car Fill-Ups

Robert Farago
by Robert Farago
chrysler won t pay dealers for new car fill ups

At the moment, Chrysler reimburses a dealer for the cost of topping-up the gas tank on a car the dealer sells to a customer. No mas. That little tidbit was buried deep in the Detroit News story about Chrysler’s incipient “traveling roadshow”– a corporate effort to “convince” dealers to order more cars despite the fact that no one’s buying them and it costs money for the dealers to have vehicles sitting on their lots. We also learn that Chrysler has frozen the labor rate for warranty work, scheduled to rise in ’09. “‘I think they understand the place we are in and understand the need for all parties to put some skin in the game,’ said [former Toyota Prez and current Chrysler Co-Prez Jim] Press, who received a standing ovation during the meeting with about 400 dealers.” Somehow I don’t think it was that particular statement that earned Mr. Press the standing O. Perhaps it was his pledge to work for $1 until Chrysler paid back its four soon-to-be seven billion dollar loan. Just kidding. Unfortunately. Anyway, Chrysler’s set a target for channel stuffing– I mean, dealer orders…

“Chrysler needs 78,000 new U.S. car orders in February, about 12 percent fewer than in the same month a year ago, said Steven Landry, Chrysler’s executive vice president of marketing and sales. ‘We think that’s fair,’ he told reporters.”

So Chrysler is set to “encourage” dealers (I want you should order me a car) to order 12 percent fewer cars than last February, after December sales dropped 53 percent. Define “fair.”

Strangely enough, The DetN couldn’t find any dealers– on or off the record– who said “Hell no” to Chrysler’s request. They quote two who’re on board with Press full-court press. And it makes for some scary reading.

“Wesley Lutz, owner of Extreme Dodge/Hyundai in Jackson, went into Sunday’s session prepared not to order any new vehicles this month but changed his mind after listening to Press.

“Lutz now plans to place an order Tuesday even though he already has more than a 100-day supply of vehicles on his lot.

Press made a straightforward pitch to convince Lutz to order more vehicles.

“‘He said, ‘Do you want the Kool-Aid or do you want reality?’ Lutz said after the meeting. ‘He promised us we’d still be open for business in April. That’s pretty powerful.’

“Dealer Fred Frederick, a Chrysler, Dodge and Jeep dealer in Laurel, Md., said he also would order new vehicles despite having a 60-day supply.”

In case you didn’t already know it, this will not end well.

Join the conversation
2 of 33 comments
  • Ttilley Ttilley on Jan 26, 2009

    @Robstar: For americans: In Brazil there is no such thing as a gasoline station that is self-serve. Unless Californians and Oregonians aren't Americans...there's no such thing as self-serve in Oregon. Anyone who's ever compared prices between the relatively (for the west) nearby cities of Yreka CA and Ashland OR will know that Ashland is often significantly cheaper. I can see that self-serve might help oil companies justify higher wholesale prices, but I fail to see how it helps consumers.

  • TheRealAutoGuy TheRealAutoGuy on Jan 26, 2009
    In case you didn’t already know it, this will not end well. The rest of us would say that predicting the future with absolute certainty is impossible.

  • Wjtinfwb I can hear the ticking from here...
  • Daniel Bridger When y'all going to learn that nothing is free?
  • MrIcky This vehicle had so many delays, then a poor launch, and then the recalls- but I look at the recall for lugnuts and I wonder if you can miss the torque spec on those, what else did you miss? This car just seems very first gen to me. I'm glad it's out there. I like competition in this space, but I'd wait until the refresh on this one. Just one too many things.
  • Jalop1991 "Toyota and Daimler merging..."Wait--another merger of equals?
  • SPPPP Aggression is pretty much the reason that racing exists, so I am going to call this an unsolvable problem. It's a contrived scenario in which you take risks to get rewards. You may be able to improve it ... but never eliminate it.