Chrysler to Breath New Life into Employee Discounts

26 June 2006

US automaker Chrysler Group is revisiting the employee discount incentives relied on so heavily by the industry last year to boost sagging domestic sales [WAMN: 03-Jun-05].

Although the DaimlerChrysler unit is remaining zip-lipped about details of the 2006 program, dealers say its launch is imminent. They also report that agency BBDO will run an advertising campaign featuring the German parent company's ceo Dieter Zetsche.

Chrysler saw its sales slide 2.5% in the first five months of 2006 and 8.4% in May.

The company is hoping the incentives - which offer vehicles to customers at the same price an employee would expect to pay - will help clear out old inventory to make way for crucial new model launches in the second half of the year.

Comments industry analyst Jesse Toprak: "It makes it simple, it makes it appear to be fair and it encourages people who don't like the car-buying process to buy a vehicle because they don't feel their neighbor is getting a better deal than they are."

Last summer's discount programs, initiated by General Motors and the Ford Motor Company were hugely successful in increasing monthly sales figures, but they plummeted in the fall when the programs ended.

Meanwhile Asian competitors, led by Toyota and Honda saw their US market share rise to 40% in May, while the three Detroit companies' market share fell to about 53%, the second-lowest level ever.

Other automakers have so far resisted big rebates this summer, despite higher-than-normal inventory levels. If Chrysler goes ahead with the mooted plans, Ford may have to follow suit, Toprak adds, since it is close to Chrysler in size.

Data sourced from; additional content by WARC staff