Quote:
Originally Posted by AR2
I'm not as big a fan of incentives because I think they can be depended upon as a crutch to cover up poor performance. They are like a drug. Having said that, incentives are necessary to compete in the industry. The difference is that some auto companies try to compete with as little incentives as possible. This helps the company, but hurts the dealers that want to sell volume. I don't know, I think it is a fine line from having too much in incentives and having just enough. Fiat-Chrysler, in my opinion, depends way too much on incentives to move the metal. It is like the company has to pay consumers to take the products.
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On this issue, were mostly on a different page....
I love incentives if they're used correctly and in my opinion Chrysler was the best in the business in this area back in the mid to late 90s.
In my opinion OEMs should use incentives to manage the product life cycle of a vehicle and they should always have an offering in their stable that can be sold in volume with deep incentives. When a vehicle is hot, like the Jeep Grand Cherokee, an OEM shouldn't need to use any incentives and they should maximize profits and attempt to increase market share with advertising and promotions.
With a vehicle that's stone cold, like the Chrysler Sebring, the OEM should add equipment and create new packages that allow for big discounts. In my experience new cars with big incentives allow dealers to sell vehicles to people who are buried in their trades.
When Chrysler was at the top of their game they had a great reputation for taking care of their dealers who loaded up on vehicles that were going out of production. I still remember a dealer in Southern California who loaded up with '98 Grand Cherokees as the vehicle was going through its final build-out and he hit a Home Run when Chrysler put heavy incentives on the old Jeep as they launched the new '99 Grand Cherokee.