Are Lower Incentives the cause of Chrysler's Sales Decline?

XDCX · 02-03-2010, 10:59 PM

Are Lower Incentives the cause of Chrysler's Sales Decline?

According to a report released by Edmunds.com, Chrysler not only has the lowest incentive spending of any of the Detroit 3 OEMs for January, they also have the greatest drop from last year.

Last year Edmunds.com estimated that Chrysler was spending $4,291 per vehicle compared to $3,505 and $3,138 at Ford and GM. For January, 2010 Chrysler's spending dropped to $3,061 per vehicle while Ford and GM held mostly steady at $3,095 and $3,103.

For a review of the full report - click here

While I'm not 100% sold on the accuracy of the Edmunds.com estimates, I think all Chrysler dealers will agree that incentive support has dropped significantly from last year's levels.

Are Lower Incentives the cause of Chrysler's Sales Decline or are other factors to blame?

Please take our survey and share your opinion.

ohiobuckeyes · 02-04-2010, 06:12 AM

There are other factors to blame. Some dealers do not care any more and really do not believe in the product the is coming out of Auburn Hills, and that attitude gets to the employees and then out to your customers. On the Incentives Chrysler is just bring them down to compete with GM and Ford. In my opinion it is just the way that the DEALER and CUSTOMERS look at Chrysler Group.

Slo · 02-04-2010, 04:06 PM

While the incentives, or lack thereof, do play a part in the problem, I don't feel that an extra $1000 would make any difference on a lot of the vehicles. Lack of consumer confidence in not only the economy, but in Chrysler and it 's products. Local dealerships closing. Vehicles that don't have much curb appeal - Sebring, Avenger, Compass, etc. Interiors that are lacking compared to competition, uncomfortable seats like the Sebring. People fed up with government intervention and bailouts. Lack of quality leasing programs. Will Chrysler be there to stand behind the product next year, three years from now? I'd make an uneducated guess that all of those factors are involved.

XDCX · 02-04-2010, 10:13 PM

Great comments.

I guess the frustration that fueled my decision to start this thread was the poor sales performance of the Ram trucks in January.

Here's a re-cap of how the Ram compared to Ford and Chevrolet:

F-Series Truck - up 10% with 27,630 units sold
Chevy Silverado - down 5% with 22,772 units sold
Ram Truck - down 22% with 9,957 units sold

Dodge is blessed to have such a great truck that it's insane to watch it lose market share to Ford and Chevrolet. Is it the advertising, the inventories, the incentives, the dealers? Why is the Ram losing share?

Sorry for the rant, but if Chrysler's going to turn the corner they're going to have to do it with hot product. In the case of the Ram Truck, it is a hot product but Chrysler's still losing share. It just doesn't add up.

Ralph · 02-05-2010, 02:46 AM

X...nothing adds up.

possum · 02-05-2010, 05:19 AM

Truck, and Jeep, are the life blood. If those two fail, it's over.

CarguyCO · 02-05-2010, 06:44 AM

Agreed....with above on truck and jeep.

Thankfully nobody makes a jeep competitor...we still sell tons of wranglers. I haven't showed a RAM truck to someone serious in what seems like months. personally I have not sold a new Ram truck in 2 months.

Txflyer · 02-05-2010, 06:47 AM

Quote:

Originally Posted by CarguyCO

Agreed....with above on truck and jeep.

Thankfully nobody makes a jeep competitor...we still sell tons of wranglers. I haven't showed a RAM truck to someone serious in what seems like months. personally I have not sold a new Ram truck in 2 months.

Agree with you on the Rams. Never thought I'd see the day but they've gone cold. We sold more Libertys and Journeys last month than we did Rams.

XDCX · 02-05-2010, 10:53 AM

Quote:

Originally Posted by Txflyer

Agree with you on the Rams. Never thought I'd see the day but they've gone cold. We sold more Libertys and Journeys last month than we did Rams.

Can you imagine the money Chrysler spent on the "My tank is full..." ads and they end up losing share to Ford and GM. It's insane.

Even worse, the Auburn Hills gang is so convinced they have all the answers they decided to kill-off the DAAs. How many DAAs do you know of that would have signed off on the "My name is Ram" or the "Manbag" commercials?

Ralph · 02-05-2010, 04:45 PM

I could sell Wranglers if I had allocation...or if they scheduled the ones I've had on order forever. I have zero on the ground, 1 shipped, none scheduled.

On a side note, I called my senator's office today, Judd Gregg, to bring up several issues of our Government's other auto manufacturer, Chrysler. My initial comments were that I'm a local NH business in his district. I was asked what is it about, I began to explain that although my manufacturer's sales rates have dropped dramatically, I'm ordering vehicles but do not get allocation and am being starved to death. He broke in and said, "I'm sorry, we don't really handle those kind of things. That sounds like a local issue." I tried to explain that this has implications for dealers all over the country and he again said it really wasn't anything his office could do anything about. He gave me the e-mail address of a peon in the office who handles small business issues.

Evidently no one cares, not even Gregg's office.

ohiobuckeyes · 02-05-2010, 05:39 PM

Ralph it is all over the country. We have a Avenger R/T on order since August and it is going to build in March. That was after BK discharge.

We have not had your problem with getting Allocations for vehicles our DM allocates what we sold the following month so we know that it will be in stock in 2 months.

Ralph · 02-05-2010, 06:06 PM

Cool, so if I can't get any....and can't sell any...I don't get allocation?

I've been selling about 4-5 a month, buying them from anywhere I can get them and had 2 allocated for February.

I even found 2 RHDs abandoned at the Allied yard in Boston and bought them. Alas poor Yorick....

View Poll Results: Are Lower Incentives the cause of Chrysler's Sales Decline?
Yes, Chrysler needs to increase incentives to gain market share	5	35.71%
Partly, Chrysler's sales are also impacted by inventory and advertising issues	5	35.71%
No, Incentives are not the primary cause of Chrysler's poor performance	4	28.57%
Voters: 14. You may not vote on this poll

02-03-2010, 10:59 PM	#1
XDCX Administrator Join Date: Nov 2007 Posts: 7,875	Are Lower Incentives the cause of Chrysler's Sales Decline? *Are Lower Incentives the cause of Chrysler's Sales Decline?* According to a report released by Edmunds.com, Chrysler not only has the lowest incentive spending of any of the Detroit 3 OEMs for January, they also have the greatest drop from last year. Last year Edmunds.com estimated that Chrysler was spending $4,291 per vehicle compared to $3,505 and $3,138 at Ford and GM. For January, 2010 Chrysler's spending dropped to $3,061 per vehicle while Ford and GM held mostly steady at $3,095 and $3,103. For a review of the full report - click here While I'm not 100% sold on the accuracy of the Edmunds.com estimates, I think all Chrysler dealers will agree that incentive support has dropped significantly from last year's levels. Are Lower Incentives the cause of Chrysler's Sales Decline or are other factors to blame? Please take our survey and share your opinion.

02-04-2010, 10:13 PM	#4
XDCX Administrator Join Date: Nov 2007 Posts: 7,875	Great comments. I guess the frustration that fueled my decision to start this thread was the poor sales performance of the Ram trucks in January. Here's a re-cap of how the Ram compared to Ford and Chevrolet: F-Series Truck - up 10% with 27,630 units sold Chevy Silverado - down 5% with 22,772 units sold Ram Truck - down 22% with 9,957 units sold Dodge is blessed to have such a great truck that it's insane to watch it lose market share to Ford and Chevrolet. Is it the advertising, the inventories, the incentives, the dealers? Why is the Ram losing share? Sorry for the rant, but if Chrysler's going to turn the corner they're going to have to do it with hot product. In the case of the Ram Truck, it is a hot product but Chrysler's still losing share. It just doesn't add up.

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02-04-2010, 06:12 AM	#2
ohiobuckeyes Senior Member Join Date: Oct 2009 Posts: 366	There are other factors to blame. Some dealers do not care any more and really do not believe in the product the is coming out of Auburn Hills, and that attitude gets to the employees and then out to your customers. On the Incentives Chrysler is just bring them down to compete with GM and Ford. In my opinion it is just the way that the DEALER and CUSTOMERS look at Chrysler Group.

02-04-2010, 04:06 PM	#3
Slo Member Join Date: Oct 2008 Posts: 36	While the incentives, or lack thereof, do play a part in the problem, I don't feel that an extra $1000 would make any difference on a lot of the vehicles. Lack of consumer confidence in not only the economy, but in Chrysler and it 's products. Local dealerships closing. Vehicles that don't have much curb appeal - Sebring, Avenger, Compass, etc. Interiors that are lacking compared to competition, uncomfortable seats like the Sebring. People fed up with government intervention and bailouts. Lack of quality leasing programs. Will Chrysler be there to stand behind the product next year, three years from now? I'd make an uneducated guess that all of those factors are involved.

02-05-2010, 02:46 AM	#5
Ralph Senior Member Join Date: Nov 2009 Posts: 580	X...nothing adds up.

02-05-2010, 05:19 AM	#6
possum Senior Member Join Date: Jan 2009 Posts: 776	Truck, and Jeep, are the life blood. If those two fail, it's over.

02-05-2010, 06:44 AM	#7
CarguyCO Senior Member Join Date: Jan 2009 Posts: 217	Agreed....with above on truck and jeep. Thankfully nobody makes a jeep competitor...we still sell tons of wranglers. I haven't showed a RAM truck to someone serious in what seems like months. personally I have not sold a new Ram truck in 2 months.

02-05-2010, 04:45 PM	#10
Ralph Senior Member Join Date: Nov 2009 Posts: 580	I could sell Wranglers if I had allocation...or if they scheduled the ones I've had on order forever. I have zero on the ground, 1 shipped, none scheduled. On a side note, I called my senator's office today, Judd Gregg, to bring up several issues of our Government's other auto manufacturer, Chrysler. My initial comments were that I'm a local NH business in his district. I was asked what is it about, I began to explain that although my manufacturer's sales rates have dropped dramatically, I'm ordering vehicles but do not get allocation and am being starved to death. He broke in and said, "I'm sorry, we don't really handle those kind of things. That sounds like a local issue." I tried to explain that this has implications for dealers all over the country and he again said it really wasn't anything his office could do anything about. He gave me the e-mail address of a peon in the office who handles small business issues. Evidently no one cares, not even Gregg's office.

02-05-2010, 05:39 PM	#11
ohiobuckeyes Senior Member Join Date: Oct 2009 Posts: 366	Ralph it is all over the country. We have a Avenger R/T on order since August and it is going to build in March. That was after BK discharge. We have not had your problem with getting Allocations for vehicles our DM allocates what we sold the following month so we know that it will be in stock in 2 months.

02-05-2010, 06:06 PM	#12
Ralph Senior Member Join Date: Nov 2009 Posts: 580	Cool, so if I can't get any....and can't sell any...I don't get allocation? I've been selling about 4-5 a month, buying them from anywhere I can get them and had 2 allocated for February. I even found 2 RHDs abandoned at the Allied yard in Boston and bought them. Alas poor Yorick....