Chrysler comeback fizzling?(employee discount coming back)+30day Money Back Guarantee
06-22-06, 05:38 PM
#17
Lexus Fanatic
Well, guys, I don't want to sound like a harpee or an " I-told-you-so " but I said several times last fall and winter that I thought that employee pricing would have to come back...at least for the domestic-nameplate companies. When they had that in place they enjoyed record sales.....GM in July of 2005 was some 42% ahead of 2004. Even with the very low dealer and manufacturer profit margins on employee pricing , so many vehicles were sold that they actually made more money than they did at what was formerly normal pricing. It was a brilliant marketing idea ( for once ), and the domestic firms, IMO, were foolish for dropping it....look what happened to GM, especially, whan they did. In just a few months they went from record sales to near-bankrupy....and Ford got in almost as deep water.
06-22-06, 09:21 PM
#18
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The thing about these incentives programs is that, for the companies that employ them to move cars, they damage brand image and install in consumer's minds that the brand and the cars associated with the brand are cheap and should be heavily discounted no matter what. They also tend to destroy a car's residual value. Chrysler, GM and Ford all need to establish consistent pricing of their vehicles and select less costly incentives when and if they are necessary to clear inventory.
M.
M.
06-23-06, 06:44 AM
#19
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Chrysler's new idea: Money-back guarantee
Automaker could finalize plan today, unveil marketing blitz that includes return of employee discounts for all.
Josee Valcourt / The Detroit News
DaimlerChrysler AG's Chrysler Group is finalizing a plan to bring back employee discounts for the masses and is adding a new twist -- customers who are unhappy with their vehicles can return them within 30 days, according to dealers and company officials.
DaimlerChrysler CEO Dieter Zetsche, Chrysler's former top executive, will announce the new incentives as early as next week and will star in a new advertising blitz that will claim Chrysler vehicles offer the best of German and American car making.
Chrysler briefed a group of dealers on the plans Wednesday, but details still must be finalized. Chrysler CEO Tom LaSorda, marketing and sales chief Joe Eberhardt and other executives are planning to meet this afternoon in Auburn Hills to review the plans.
"They are trying to put out the message that they are proud of their vehicles and stand behind them," said one dealer who attended Wednesday's meeting. "If you don't like the vehicle, you can bring it back."
Chrysler also is considering offering zero-percent financing with the employee discounts, according to another dealer.
The 30-day guarantee is a new idea Chrysler hopes will eliminate doubts among buyers who remember the automaker's past quality problems. But customers who return their vehicles would pay a penalty and a mileage fee.
Chrysler's expected moves would represent an extraordinarily aggressive marketing push at a time when the automaker has been struggling to maintain sales and reduce vehicle stockpiles. Chrysler's U.S. sales fell 10.9 percent last month and are down 2.5 percent for the year. At the end of May, Chrysler had a 77-day supply of cars and trucks, well above the ideal of about 60 days.
"They're going to come to the party with something very aggressive so they can move this glut of inventory," said Chuck Fortinberry of Clarkston Chrysler-Jeep, who attended Wednesday's meeting but declined to provide details.
Dealers who did not attend the meeting were enthusiastic about what they heard might be coming.
"The war is starting. The gloves are off," said Alan Helfman of River Oaks Chrysler-Jeep in Houston. "Chrysler's here to fight and they have something to fight with. There have been some dang good deals but not this good."
Led by General Motors Corp., Detroit automakers first offered employee discounts to all buyers last summer to help clear 2005 model inventories and make room for 2006 vehicles. The deals were successful beyond all expectations but demand quickly dried up when the promotions ended.
John Henke, marketing professor at Oakland University in Rochester, called Chrysler's idea to let unsatisfied customers return vehicles brilliant.
"What that exudes to the public is incredible confidence in their product," he said. "This is very simple, very straight forward: if you don't like it, bring it back. To the consumer, it's a risk-free buy."
But using Zetsche in a marketing blitz may not resonate outside of Michigan, Henke said.
Zetsche, who led Chrysler out of a financial crisis before being promoted to the top job at parent DaimlerChrysler last year, became very popular in the Metro Detroit area. Now, Chrysler is betting the affable, mustachioed executive can become a spokesman in the tradition of Lee Iacocca. Iacocca led Chrysler to a comeback in the mid-1980s and appeared in television ads featuring his slogan: "If you can find a better car, buy it."
Zetsche is far less well known in America and spends most of his time in Germany, where DaimlerChrysler is headquartered. "In the rest of the country, no one will know who he is," Henke said. "Locally, he'll do well. In New York, they're going to say 'Dieter who?' "
Chrysler's current incentive program ends June 30. Whatever form the final version of the new incentive program takes, Helfman doesn't expect dealers will be stuck with a backlog as they did last year when summer sales exploded and then petered out in September.
"It depends on the next message," he said. "But keep in mind that Chrysler has 10 new cars coming at the end of the year. As long as it's a fair deal, I think we're going to get through after this program peters."
Doug Wilson of Wilson Auto Group in Flowood, Miss., said an incentive program of this magnitude will help make room for 2007 models. But he cautioned that employee discounts could ignite a price war among Detroit automakers, as happened last year, which in the long run could hurt resale value and cut into dealer profits.
"It was widely successful the first time," he said, "but how did the (automakers) end up last year?"
source : detnews
Josee Valcourt / The Detroit News
DaimlerChrysler AG's Chrysler Group is finalizing a plan to bring back employee discounts for the masses and is adding a new twist -- customers who are unhappy with their vehicles can return them within 30 days, according to dealers and company officials.
DaimlerChrysler CEO Dieter Zetsche, Chrysler's former top executive, will announce the new incentives as early as next week and will star in a new advertising blitz that will claim Chrysler vehicles offer the best of German and American car making.
Chrysler briefed a group of dealers on the plans Wednesday, but details still must be finalized. Chrysler CEO Tom LaSorda, marketing and sales chief Joe Eberhardt and other executives are planning to meet this afternoon in Auburn Hills to review the plans.
"They are trying to put out the message that they are proud of their vehicles and stand behind them," said one dealer who attended Wednesday's meeting. "If you don't like the vehicle, you can bring it back."
Chrysler also is considering offering zero-percent financing with the employee discounts, according to another dealer.
The 30-day guarantee is a new idea Chrysler hopes will eliminate doubts among buyers who remember the automaker's past quality problems. But customers who return their vehicles would pay a penalty and a mileage fee.
Chrysler's expected moves would represent an extraordinarily aggressive marketing push at a time when the automaker has been struggling to maintain sales and reduce vehicle stockpiles. Chrysler's U.S. sales fell 10.9 percent last month and are down 2.5 percent for the year. At the end of May, Chrysler had a 77-day supply of cars and trucks, well above the ideal of about 60 days.
"They're going to come to the party with something very aggressive so they can move this glut of inventory," said Chuck Fortinberry of Clarkston Chrysler-Jeep, who attended Wednesday's meeting but declined to provide details.
Dealers who did not attend the meeting were enthusiastic about what they heard might be coming.
"The war is starting. The gloves are off," said Alan Helfman of River Oaks Chrysler-Jeep in Houston. "Chrysler's here to fight and they have something to fight with. There have been some dang good deals but not this good."
Led by General Motors Corp., Detroit automakers first offered employee discounts to all buyers last summer to help clear 2005 model inventories and make room for 2006 vehicles. The deals were successful beyond all expectations but demand quickly dried up when the promotions ended.
John Henke, marketing professor at Oakland University in Rochester, called Chrysler's idea to let unsatisfied customers return vehicles brilliant.
"What that exudes to the public is incredible confidence in their product," he said. "This is very simple, very straight forward: if you don't like it, bring it back. To the consumer, it's a risk-free buy."
But using Zetsche in a marketing blitz may not resonate outside of Michigan, Henke said.
Zetsche, who led Chrysler out of a financial crisis before being promoted to the top job at parent DaimlerChrysler last year, became very popular in the Metro Detroit area. Now, Chrysler is betting the affable, mustachioed executive can become a spokesman in the tradition of Lee Iacocca. Iacocca led Chrysler to a comeback in the mid-1980s and appeared in television ads featuring his slogan: "If you can find a better car, buy it."
Zetsche is far less well known in America and spends most of his time in Germany, where DaimlerChrysler is headquartered. "In the rest of the country, no one will know who he is," Henke said. "Locally, he'll do well. In New York, they're going to say 'Dieter who?' "
Chrysler's current incentive program ends June 30. Whatever form the final version of the new incentive program takes, Helfman doesn't expect dealers will be stuck with a backlog as they did last year when summer sales exploded and then petered out in September.
"It depends on the next message," he said. "But keep in mind that Chrysler has 10 new cars coming at the end of the year. As long as it's a fair deal, I think we're going to get through after this program peters."
Doug Wilson of Wilson Auto Group in Flowood, Miss., said an incentive program of this magnitude will help make room for 2007 models. But he cautioned that employee discounts could ignite a price war among Detroit automakers, as happened last year, which in the long run could hurt resale value and cut into dealer profits.
"It was widely successful the first time," he said, "but how did the (automakers) end up last year?"
source : detnews
Last edited by Gojirra99; 06-23-06 at 06:49 AM.
06-23-06, 06:52 AM
#20
Lexus Fanatic
Originally Posted by videcormeum
The thing about these incentives programs is that, for the companies that employ them to move cars, they damage brand image and install in consumer's minds that the brand and the cars associated with the brand are cheap and should be heavily discounted no matter what. They also tend to destroy a car's residual value. M.
06-24-06, 05:44 AM
#21
G35x - RWD/AWD goodness
Chrysler Fires First Salvo in Latest Incentive Skirmish
Date posted: 06-24-2006
DETROIT — The Chrysler Group plans to reinstate employee discounts for all customers on July 1, in what is seen as the first shot in the latest dealer incentive wars.
News of the Chrysler plan was reported in the trade publication Automotive News, which said Chrysler informed dealers of the program on Wednesday.
The employee-discounts-for-everyone plan is similar to the program launched last summer by General Motors and quickly copied by Ford and Chrysler. While the heavy discounts dramatically reduced inventories of unsold vehicles, they were extremely costly to the automakers, and sales volume plummeted when the programs were phased out in the fall.
Newspaper reports on Friday said GM planned to counter the latest Chrysler program with a different scheme to offer zero-interest financing.
What this means to you: If you're planning to buy a new car or truck, you might want to wait a week or two to hear more details on new incentive programs from Detroit.
Source: http://www.edmunds.com/insideline/do...ticleId=115894
DETROIT — The Chrysler Group plans to reinstate employee discounts for all customers on July 1, in what is seen as the first shot in the latest dealer incentive wars.
News of the Chrysler plan was reported in the trade publication Automotive News, which said Chrysler informed dealers of the program on Wednesday.
The employee-discounts-for-everyone plan is similar to the program launched last summer by General Motors and quickly copied by Ford and Chrysler. While the heavy discounts dramatically reduced inventories of unsold vehicles, they were extremely costly to the automakers, and sales volume plummeted when the programs were phased out in the fall.
Newspaper reports on Friday said GM planned to counter the latest Chrysler program with a different scheme to offer zero-interest financing.
What this means to you: If you're planning to buy a new car or truck, you might want to wait a week or two to hear more details on new incentive programs from Detroit.
Source: http://www.edmunds.com/insideline/do...ticleId=115894
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