AdAge reports that Chrysler is deep-sixing it’s “Double Ca$h” for clunkers ad campaign, some thirty days before the ads were due to expire. “We saw the spike in the interest and decided to change our direction,” a Chrysler spokeswoman told Ad Age. Chrysler is now switching to a “summer clearance” ad campaign. Huh? AdAge doesn’t explore the rationale behind the move, but here’s a couple of theories . . .
1. Not enough qualifying inventory. The MSM hasn’t picked-up this prospect—despite the Glenn Beckian possibility of under-the-table collusion between the feds and GM/Chrysler to spike the Cash for Clunkers program until they could re-stock dealers with qualifying vehicles. But it’s certainly true that Chrysler has been building bupkis since bankruptcy. The chances that they got caught with their proverbial pants down are high.
2. AdAge says that “Chrysler plans to honor the double cash offer through Monday, Aug. 3, and on Tuesday announce new incentives, the spokeswoman said, but declined to elaborate.” Again, Chrysler could be a victim of its own success; the double cash offer comes off their bottom line. While it’s hard to believe that ChryCo would be careful with taxpayer money (why start now?), it’s not entirely inconceivable. Is it?
Actually… Chrysler hiked the prices of a bunch of their models by an insane amount to compensate for the CfC campaign.
Take this PT Cruiser… please!
http://www.carsdirect.com/new_cars/models_guide?make=CD&modelid=
It’s insane to ask for these prices in a market where they’re pretty much the bottom rung. Instead they will probably opt for the 43rd version of value pricing to see if they can move this product.
My guess is that they need an incentive program to move any metal at this point. Chrysler has (and will have for 1-2 years) the weakest product line.
So they designed this program based on the assumption that C4C would be a stable program for 60-90 days.
Even if the senate approves another $2B… How long does that last? 6 days for the first $1B.. Maybe 15-20 days for the next $2B?
No matter how you slice/dice it, Chrysler can’t afford to tie themselves to the whims of Congress and rely on the efficiency of the US Govt. C4C program.
Unfortunately for our tax dollars, they just learned this the hard way…
It might slow down a lot after all the ones who really were gonna buy anyway get their cars. The last billion might last a while. My nephew just bought a charger and i couldn’t talk him out of it. I just told him to make sure it was built AFTER the bankruptcy was over. Not sure if he did or not. I will keep an eye on it to see if it is a good car or not. They would have to be 2/3 off sale before i would even consider one over a full priced Ford.
all they have been doing for years were incentive programs. For a while now they have been running incentive programs on taxpayers’ expense. Now an official taxpayers’ incentive program makes their taxpayers-paid incentive program obsolete.
The prices of ChryslerCo vehicles are way too volatile. Crazy swings in MSRP, option package prices, and incentive amounts have been the norm since 2006.
It’s even worse than GM.
Robert, here’s a third possibility: Chrysler’s “Double Cash” campaign threw the spotlight on qualifying vehicles, to the detriment of everything else on the lot — including higher-margin (or, at Chrysler, lower-loss) vehicles. If so, customers who would otherwise have looking at the upper end of the lineup might have downshopped instead to get the bargains. The upper-end would be starting to stagnate on the lots and in the supply chain.
Perhaps somebody did the math: selling a large number of qualifying vehicles under the “Double Cash” program is actually worse financially than selling fewer qualifying vehicles but a few more non-qualifying models. If this is correct, the new program will include reduced discounts on the qualifying vehicles, but increase discounts on the higher end to draw consumer interest.
I see by the AdAge article that Hyundai is selling cars left & right. Good for them. Their products, and the example of success the company provides, provide the American public with yardsticks for judging just how far Government Motors and it’s allies in the UAW have sunk.
The system won’t let me edit the above comment, so I’ll add one more thought here: I reckon nothing will kill the Cash For Clunkers program faster than if all the sales are going to the non-UAW companies. Not only does that defeat a big part of the Democrats’ purpose, but it also highlights the failure of Government Motors. Very embarrassing for Congress and the Obamonites.
If I had to bet, it would be that Chrysler is about out of qualifying inventory for the C4C program. First, they probably have the fewest qualifying vehicles of any manufacturer. Caliber and PT Cruiser are the smallest they have, and even then, their gas mileage is not stellar. Second, their inventory has to be fairly low to start with, just because of the extended shutdown.
They have probably been cleaned out of Calibers, PTs and 4 cyl Sebrings and need to move the stuff with the v8 engines.
I went to Dodge dealer and the rebate was greater that the double cash on a Ram 1500.
Rebate was $5,500 and the double cash was $3,500.
I wouldn’t be surprised if Chrysler isn’t printing new window stickers with higher MSRP numbers so they can pocket a bigger chunk of profit if they even make any profit. I can see the guys at night scraping and sticking already!! Tongue and cheek to be sure, but never trust a dealer to not find a way to fleece a customer….
I think that the dealers are by and large out of qualifying inventory. I swung through the lot at my local Dodge- Chrysler- Jeep dealer (Mann DCJ in Richmond, KY) and the only qualifying vehicles left on the lot were 6 Dodge Avengers that had “$4500 off” chalked on the windows. There were no new Calibers, Jeep Compasses, Jeep Libertys, or Dodge Nitros on the whole lot.
I’m going with “they’re out of qualifying inventory”. Look at Chrysler’s vehicle lineup. Not only does it suck, it doesn’t have very many qualifying vehicles.
I guess they sold a hell of a lot of Sebrings (finally).
So if your a dealer and just cleared your lot over the last week with the C4C deals.. what do you do?
Cash out and walk away?
Reorder and refill the lot?
Wait to see what the senate does this week?
C4C might result in many dealers closing. Should be interesting to watch.