DaimlerChrysler's hottest US seller - the retro-look Chrysler PT Cruiser - has finally hit a sales slump and the company is offering the first cash rebates, the Detroit News reported.

The newspaper said that US PT Cruiser sales fell 36 percent to 8,600 vehicles in January and that Chrysler had responded by offering buyers - so far, only in the Midwest and Northeast - $US1,000 cashback deals.

Last week, the car maker began offering up to $2,500 cash back or low-rate financing on most Chrysler, Dodge and Jeep cars and trucks nationwide but excluded the PT Cruiser and Jeep Liberty from the national deals, the Detroit News said.

The newspaper described the PT Cruiser, launched in the spring of 2000, as a North American Chrysler success story with 144,717 sales last year. Less than a year ago, demand was still driving prices up and forcing consumers to wait months to take delivery, the newspaper said.

However, despite high hopes, the car has not been such a smash hit in export markets. As European-assembled Job One was rolling off the production line at Chrysler's Graz, Austria, plant last July, German dealers were saying they were already needing to discount the car to boost sales. After less than six months, Chrysler announced it was scrapping European production due to reduced demand. It has recently announced a diesel version for Europe, using a Mercedes-Benz engine.

Chrysler's senior vice-president of sales Gary Dilts last week told the Detroit News that softening US car sales and PT Cruiser's image as a niche vehicle costing $US25,000 have caused the dramatic drop in demand.

The newspaper said that Chrysler is planning a new advertising campaign to woo younger buyers and generate volume sales by highlighting PT Cruiser's $16,000 starting price.

Clearly, the days of US dealers charging a $5,000 premium over list price for a new PT Cruiser are over. In Europe, such gouging never happened.