Chrysler Hikes Incentives Reacts To GM

DETROIT April 1, 2003; Reuters reported that the Chrysler arm of DaimlerChrysler AG enhanced its consumer incentives on Tuesday, matching a move by General Motors Corp. to boost flagging U.S. auto sales.

Chrysler spokesman Marc Henretta said the new deals, including bigger cash rebates and interest-free loans for up to five years on the strong-selling PT Cruiser, were the company's most aggressive ever.

Like the deals GM rolled out on Monday night, the offers are also likely to cost Chrysler more than the incentives it launched after the Sept. 11 attacks.

The deals, which Ford Motor Co. is expected to match later on Tuesday, come as the U.S. auto industry faces the prospect of lower-than-expected sales during its key spring season because of the war in Iraq and a wobbly economic recovery.

Chrysler's new program runs through April, and Henretta said the company is raising cash-back offers on the regular Dodge Ram pickup, one of its best-selling vehicles, to $3,000 from $2,500.

Besides the PT Cruiser, Henretta said Chrysler would now offer extended zero-percent loans for the Sebring and Stratus sedans.

The company will also offer a matching down payment of $750 to buyers of its popular minivans or Jeep Grand Cherokee sport utility vehicle.

As in previous months Chrysler, which has been touting efforts to improve the quality of its vehicles, is also stressing the value to consumers of its seven-year or 70,000-mile powertrain warranty.

GM has led the industry in incentives for more than a year and spent an average of $3,085 per vehicle in February. Despite the offers, its inventories of unsold vehicles swelled to an 88-day supply, some 20 percent above normal.