Chrysler deals lose big buzz

[Flybrian]

Chrysler deals lose big buzz

Fewer taking advantage of automaker's employee discounts

Josee Valcourt / The Detroit News

Link to original article @ DetNews.com

The revival of employee discounts for all by DaimlerChrysler AG's Chrysler Group isn't shaping up to be quite the megahit it was last year, when Chrysler, Ford Motor Co. and General Motors Corp. sparked a frenzy of summer car and truck sales by offering employee prices to everybody.

Chrysler dealers say it's too soon to call the campaign a hit or a miss, but note that consumer response has been mixed compared with last summer, when buyers flooded showrooms to take advantage of what appeared to be a once-in-a-lifetime opportunity.

"Most people are inquiring about employee pricing," said Hamlet Andreasyan, sales manager at La Brea Chrysler Jeep in Los Angeles. "But it's nothing like last year."

Chrysler spokesman Kevin McCormick said the program, which was launched July 1 and runs through July 31, had to compete with the July Fourth holiday weekend and consumers may have chosen to head out on road trips rather than into showrooms.

"As we go further along into this, we'll have a better sense of the strength of the program and the strength of the awareness as customers are making their purchasing decision for cars and trucks," McCormick said. "Sales figures at the end of the month will be the telling metric."

It wouldn't be a surprise if the promotion doesn't turn out to be the phenomenon it was last year, said Tim Calkins, a professor at the Kellogg School of Management at Northwestern University in Evanston, Ill.

Employee pricing, introduced last year by GM and quickly copied by Ford and Chrysler, was "totally new and stunningly big," Calkins said. "Now it doesn't have that feel."

The challenge with repeating such a sensational program is that it has to be bigger and go deeper than the original, Calkins said.

"To get the same effect, you need to take more and more," he said.

Going into the second full week of the promotion, dealers are hoping traffic picks up as more consumers learn about the deal. On Friday, several shoppers at Southfield Chrysler-Jeep said they were scouting out new cars, at least in part, because of the employee pricing offer.

"I'm looking to buy a Jeep Grand Cherokee Laredo and hoping to do that before the employee pricing program ends," said Michael Reinglass, 35, of Chicago, who was in town visiting family with his wife. "You can get a break on the pricing so I'm trying to take advantage of that."

Julie Ramirez of Livonia leased a new Jeep Grand Cherokee Friday.

Ramirez said employee pricing was a factor in her decision and made a significant difference in her new monthly payments, which kick in next month after her current lease on a Chrysler Sebring ends.

"The Grand Cherokee is more expensive but because of the employee pricing, the payments will stay the same," she said.

Chrysler brought back employee pricing to help clear a stockpile of 2006 vehicles and make way for 2007 models. In a report Friday, Merrill Lynch auto analyst John Murphy said Chrysler has a 98-day supply of light trucks in inventory, 24 percent above normal.

Shoppers can combine the employee discount with zero-percent financing or cash rebates of up to $3,500, depending on the model. They can also return their new vehicles within 30 days if they're unhappy with their purchase.

Chrysler rolled out the program by kicking off a major advertising campaign that features DaimlerChrysler CEO Dieter Zetsche touting Chrysler's cars and trucks as offering the best of American and German design and engineering.

Kevin Primus, sales manager at Bay Ridge Chrysler Jeep Dodge in Brooklyn, N.Y., did not see a deluge of car buyers in the first days of the employee pricing offer.

"On Saturday and Sunday, we (sold) less than we normally do, and on a Monday it was average," Primus said. "Hopefully, this weekend, we'll get to bear the fruits of employee pricing."

Zangara Dodge in Albuquerque, N.M., reported fewer customers, though heavy rains and the holiday weekend may have deterred would-be buyers. About half of the consumers who visited the dealership were unaware of the new employee pricing program, said owner Ken Zangara.

John Henke, marketing professor at Oakland University in Rochester, agreed with Chrysler officials that it was still too early to decide if the program is a boom or a bust.

"They have to get time for the word to get out," Henke said. "For people who are undecided, they have to think about (the purchase) and rationalize it. To say that the program isn't working is much too premature. They have to give it another month."

Hollywood Chrysler Jeep in Florida doesn't have to wait. Business has increased about 30 percent from June, said John Berry, sales manager.

"People who realized that they missed employee pricing the first time around are coming in," Berry said. Among popular cars customers are nabbing while the incentives are in effect is the Chrysler 300C, he said, which usually isn't sold with discounts as deep as the employee pricing.

Showroom traffic at Performance Chrysler Jeep Dodge in Glendale, Ariz., has spiked about 25 percent, said Eric Dohrman, general sales manager at the dealership.

"I sold seven Durangos in two days, where as last month I sold 14," Dohrman said. "It's a really good deal for the midrange to high-end cars."

You can reach Josee Valcourt at (313) 222-2300 or [email protected].

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And on the flip side...

GM Won't Revive Employee Pricing

[MyerShift]

Intersting, to say the least.

Looks like Chrysler needs more great, better looking cars, not great "bad" looking cars.

[VenSeattle]

I'm sure the new ASPEN will burn up sales charts based on looks alone. That new Sebring will make Camry & Aura rue the day.

[SableStyle]

I wonder if the whole Dr. Z thing is putting people off?

I mean, it's no secret to auto enthusiasts that DCX is German-owned, but would this ad campaign be enough to keep the "Buy American" crowd out of Chrysler showrooms?

[carstar]

the employee discount dosen't include the 300's and some other models. so to me it sounds like fewer are being offered employee discounts instead of what the title said: "fewer taking advantage of automaker's employee discounts"