Chrysler's "Free" Cars Inflated December Sales
January 6th, 2009 1:16 PM Share
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.”
Published January 6th, 2009 1:10 PM
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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.
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.
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").
I do like the picture. So apropos.