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Chrysler Renews Discounts as Sales Slump

By Joe Benton
ConsumerAffairs.com

August 2, 2006

• GM Cuts Prices for February • Toyota Sales for 2007 May Surpass GM • New GM Sale May Challenge Bargain Hunters • GM Hangs on as World's No. 1 Automaker • Saturn Outlook Gets High Marks from Consumer Reports • Summer Car Sales Start to Sizzle • Consumer Reports Lists Best New Car Deals • Chrysler Dumps Remaining 2006 Inventory on Used Car Market --- • More about Auto Sales ...

The Chrysler group has extended its Employee Pricing Plus discount program through August 31. The sales promotion was set to expire July 31.

The Chrysler move comes as automakers report steep sales declines for July. Chrysler reported a sales drop of 37 percent, deeper than analysts had forecast.

At Ford sales were off 34 percent from the record posted a year earlier. Truck sales at Ford are down 48 percent.

Sales are down 22 percent at General Motors with truck sales off 31 percent.

In an effort to sell off Chrysler inventory, the company will continue to offer any customer the same price on almost any 2006 vehicle that Chrysler employees pay. Consumers also have a choice of zero percent financing for 36 months or rebates that vary from model to model.

Chrysler had hoped other manufacturers would join the incentives war to build summer sales momentum. So far, no other manufacturer has followed along and despite the sales incentive, Chrysler has the industry's highest inventory levels.

Both General Motors and Ford cut third-quarter production by about 8 percent to bring inventories in line with demand.

GM, which started last summer's price war, has so far refused to repeat of the same kind of heavy rebates that boosted sales but cut into profits for both the automaker and its dealer affiliates last summer.

Ford has offered interest-free loans for 60 months on most models along with some cash discounts.

Ford is blaming the July sales decline on a drop in demand for its trucks as consumers move out of gas-guzzlers in a climate of high prices at the pump.

Ford's July sales are down 34.2 percent to 241,339 vehicles, compared with 366,548 for the same month in 2005.

Truck sales at Ford dropped 43.8 percent to 151,944 vehicles from 270,405 in the year-ago period. Car sales fell 7 percent to 89,395 vehicles from 96,143 in July 2005.

So far in 2006, Ford sales are down 9.5 percent to about 1.79 million vehicles from 1.98 million vehicles for the first seven months of 2005.

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