In an interview carried by Reuters Jim Schroer, head of sales and marketing for Chrysler, coined the incentives merry-go-round that boosts sales at the cost of profitability the ‘doom loop’.
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“It’s the incentives doom loop, where it’s ever-increasing incentives to keep the volume levels going,” Schroer told Reuters.
During the interview Schroer said that he did not foresee incentives in the US marketplace finishing soon. He pointed out that he did not want to see any intensification of price competition, but also that no manufacturer would be permitted to steal a march on rivals and gain all the volume.
Schroer also said that Chrysler would eventually be able to wean itself off incentives as new and attractive products (like the Pacifica and Crossfire), built to higher quality improve the Chrysler brand image. But he conceded that changing consumer perceptions is a long-term project.
