Chrysler Drives Fresh Incentives Battle with New Discounts

05 March 2003

Chrysler Group – the US arm of auto giant DaimlerChrysler – is stepping up its incentive scheme to combat the growing reluctance of Americans to part with their cash.

In the last year, the ‘big three’ in the US car sector have maintained sales by embarking on a major incentives war, but Chrysler has so far refused to offer cash rebates and cheap finance on the same scale as rivals Ford Motor Company and General Motors.

However, chief operating officer Wolfgang Bernhard has revealed the auto firm will now match most of its rivals’ incentives, citing US consumers’ “increasing hesitancy” to buy cars as the threat of conflict in the Middle East grows.

These new discounts will be added to Chrysler’s existing offer of a free seven-year engine warranty to form a package Bernhard claims gives more to consumers than those offered by Ford and GM.

Chrysler can afford to do this because it has reduced the cost of repairing engines under warranty by 20% in the last year and is expected to trim a further 15% to 20% in 2003. Continued Bernhard: “The incentives are worth more [than rival discounts] to consumers, but cost us less.”

Data sourced from: Financial Times; additional content by WARC staff