Chrysler to Continue With 'Employee Discounts' Promo

04 August 2006

Despite disappointing July sales, Chrysler Group, the US unit of Germany's DaimlerChrysler, says it will reinstate its so-called 'employees discount' sales incentive scheme.

Along with GM and Ford, Chrysler is anxious to discontinue such margin-eroding promos - but in the dog-days of a hot summer all three US automakers see them as a necessary evil.

With stocks of 2006 models still littering its dealer lots, Merrill Lynch analyst John Murphy says Chrysler is facing its highest unsold auto inventory in five years. While former Porsche ad chief John Bulcroft, now president of auto consultancy The Advisory Group, unhelpfully opined: "It sounds like Chrysler is still desperate."

Sales last month for Dodge, Chrysler and Jeep fell by 37% to 150,349 vehicles compared with July 2005, when the industry at large posted its best-ever monthly sales. In June this year, Chrysler sold 185,946 units thanks to zero-percent financing deals.

Nor, it seems, has Chrysler's 'Dr Z' ad campaign, featuring DaimlerChrysler chairman Dieter Zetsche, helped stem the July sales decline.

Susan Jacobs, president of auto consultant Jacobs & Associates, believes the campaign is "too gimmicky", while a July survey of intended buyers of new vehicles by CNW Marketing Research revealed that 80% thought Dr Z was a fictional character.

Bulcroft said the ads make the mistake of portraying the Chrysler chairman as a funny German. "When things get really terrible and the ad agency gets desperate and can't think of anything else to do, their response is: 'Let's put the ceo in the commercial'."

Could it be that the campaign's creator, BBDO Detroit, was unaware of David Ogilvy's classic clerihew:

If the client moans and sighs
Make his logo twice the size.
If again he proves refractory, use a picture of the factory.
Only in the gravest cases should you show the clients' faces.

Data sourced from AdAge (USA); additional content by WARC staff