Chrysler on Tuesday reportedly highlighted the continuing uncertainty over the health of the US vehicle industry by sounding a note of caution over net pricing, one of the industry’s key economic indicators.
According to the Financial Times (FT), CEO Dieter Zetsche echoed comments earlier this week from rival General Motors when he said Chrysler was “cautious” over net pricing, which is a vehicle’s basic sticker price minus discounts and other incentives.
The FT said net pricing has declined slowly but steadily this year, partly as consumers continue to expect deals when they walk into showrooms, while carmakers are hoping that a slew of new products will this year help them eventually raise sticker prices and boost sagging automotive earnings.
Zetsche reportedly said: “So far as far as incentives are concerned this year has been better for all manufacturers than the first six months of last year. We hope that this is a trend, and not a ‘half year episode’. But we acknowledge as well that the competitive pressure continues to be real, that overcapacity continues to exist and therefore we are cautious in our own planning for incentives and net pricing.”
The Financial Times said Zetsche, speaking at a ceremony to mark the 50th anniversary of Chrysler’s vehicle testing track in Michigan, also reacted to a decision on Tuesday by the California Air Resources Board that would mandate carmakers to cut carbon dioxide emissions by nearly 30% over the next decade.
The newspaper said Detroit’s carmakers say fuel emissions should be a federal, not a state-mandated issue and are opposed to blanket measures that would require emissions to be cut across all types of products.
Zetsche reportedly said: “We will continue to introduce technology wherever feasible, segment by segment. Thirty per cent improvement is only achievable in the foreseeable future if you totally change the structure of the [product] line-up, which means you drive a small car instead of a pickup, and that’s a choice I think we should leave to our customers and not mandate because that would be in contradiction with our basic beliefs in this country.”
According to the FT, Zetsche also said he did not believe that hybrid petrol-electric vehicles, which are selling at record levels in the US due to high petrol prices, were the answer to reducing vehicle fuel consumption.
He reportedly said: “We do believe that the hybrid is slightly over-rated and the diesel is significantly under-rated in its contribution to that challenge.”
The Financial Times noted that, unlike Ford, GM, Toyota and Honda, Chrysler is concentrating on diesel technology, much of it developed by the unit’s parent, DaimlerChrysler – Chrysler launches a diesel version of its Jeep Liberty [Cherokee] sports utility vehicle in the autumn.