On the heels of October’s disappointing sales, Chrysler Group today announced an aggressive new incentive campaign aimed at salvaging the company’s fourth quarter numbers.
The company timed this morning’s announcement to allow its dealers time to place their local media buys to run ahead of the four-day Thanksgiving holiday period.
Beginning today and running through January 4, Chrysler is increasing its cash incentives by $1,000 to $1,500 on select models.
Among the models eligible for the additional incentives are the Chrysler 300 and 300C. After applying the additional $1,000 cash incentive the 300, with a sticker price of $28,010 including destination charges, will sell for $25,010. The automaker is also offering 0% financing for 60 months on the 300 and 300C.
Other incentive options include discounts of $500 to $1,000 on the lease of a new Chrysler minivan, 0% financing for 60 months on the Dodge Charger and Nitro models and discounted financing on ‘08 and ‘09 Dodge Vipers.
In keeping with Chrysler’s new business model, the incentives are being grouped by brand. For example, Jeep is offering only the customer cash option on every model but the Wrangler while Dodge’s incentives include discounted financing and lease options as well as customer cash.
Throughout the current economic downturn, Chrysler has relied more heavily on incentives than rival automakers. In October, the actual cost of Chrysler’s incentives amounted to approximately $3,219 for every vehicle sold according to Edmunds.com. That compares to an industry average of $2,468.
To support the new incentives, Chrysler plans to launch what it is calling an “aggressive” advertising campaign. In a message to its dealers, the automaker said the campaign is “aimed at driving a message on product, features and accolades into the marketplace and traffic into your showroom. The residual effect of the campaign will also let the public know that Chrysler is alive and well.”
Chrysler’s new CEO, Sergio Marchionne, unveiled the automaker’s five-year business plan earlier this month. Marchionne predicted that, on an operating basis, the company will break even in 2010. On a net basis, he projected that the break even mark would be reached the following year, in 2011. Those projections assume the automaker’s ability to recapture market share that was lost over the last year as Chrysler undertook its government-sponsored restructuring bankruptcy.
The new incentives and advertising campaign are being praised by Chrysler’s dealers like Bob Shuman who owns Shuman Chrysler-Jeep of Walled Lake, Michigan.
Shuman said, “It’s a very, very strong program. I think it’s tremendous. We need it.”
In October, Chrysler’s sales dropped 30% continuing the downward trend that has resulted in a 39% decline through the first 10 months of the year. Earlier this week, Edmunds.com predicted a 35% decline in Chrysler’s sales during November.