US: Chrysler announces new incentives
Chrysler has unveiled a fresh barrage of incentives to push up retail sales and reduce inventories in the ferociously competitive US car market, according to a Financial Times report.
The financial daily said new offers, which apply to most Chrysler models, include interest-free financing for up to six years, no principal payments for six months, and free holidays for top-performing sales staff at Chrysler dealerships.
The carmaker reportedly is also paying dealers US$1,000 per vehicle on all models if they meet their allotted uptake, even if the cars then remain unsold.
"I've not seen incentives as innovative as this for a long, long time," Dave Maraney, general sales manager at a Chrysler dealership south of Pittsburgh, told the Financial Times. He said the extra $1,000 giveaway enabled dealers to provide a wider selection of vehicles and to offset higher financing charges.
Analyst John Murphy at Merrill Lynch reportedly said in a report this week that it was "an ominous sign for retail demand when vehicle manufacturers start paying dealers to take cars rather than sell them" while Global Insight analyst Rebecca Lindland told the paper that Chrysler had "really been the incentive leader for quite a number of months now", in contrast to General Motors and Ford Motor, its Detroit-based rivals that have sought to replace discounts with lower sticker prices.
Chrysler's share of the US car and light truck market rose to 15.1% last month, from 13.6% in January and 14.8% in February 2004, the FT noted.
According to the report, Chrysler said that overall incentive spending was flat compared with a year ago, but that the company needed to respond to GM and Ford promotions.