Chrysler Gas Card Not Helping Much

Posted by: David Kiley on June 4, 2008

jeep_patriot_3372_4.jpg

Chrysler reported a 25% sales decline for May despite having arguably the best known and best timed incentive in the market—gas guaranteed at $2.99 per gallon for the next three years.

According to the company, about 10% of new vehicle sales in May took the card rather than the cash discounts. Chrysler said they expected that would be the take rate when they launched it.

Perusing Chrysler’s sales, one of its key problems is that it doesn’t have a good fuel economy story around any one vehicle. The Jeep Patriot was up 82% in May in part as people traded down from bigger Jeep models to cope with higher gas prices. But other Chrysler cars, along with suvs, were way down. The Sebring was down 63%, and the Avenger was down 27%. Meantime, the like-sized Ford Fusion was up 27% in May. Oddly, the Chrysler Aspen posted an 18.2% gain.

Chrysler is in a deal with Nissan for the Japanese automaker to build a small car for Chrysler to launch by late 2010. It can’t arrive fast enough.

Reader Comments

Mike from NYC

June 4, 2008 2:55 PM

The idea that Chrysler is encouraging people to buy their gas guzzling trucks and SUVs and Hemi powered cars is despicable. I give Chrysler 2-3 years until it ends up like Plymouth, Desoto, Studebaker . . . Cerberus had hubris to think they could turn around Chrysler and compete against companies with far deeper pockets.

billd

June 4, 2008 8:09 PM

A vehicle purchase is a long term commitment. If enough people defer from buying from Chrysler because they believe the company won't be around to provide support and service, its demise will become a self-fulfilling prophesy. Chrysler needs to present its future. Unfortunately, with autos like the 2008 Challenger SRT8, it seems to be focusing on its past.

Jim from Ohio

June 6, 2008 1:26 PM

All of the 2008 Challengers were sold before they were built. Those cars were not intended for anyone other than those who could afford them, and those who are looking to re-sell them. I suppose Ford should get rid of the Mustang. I have a HEMI powered truck that gets a respectable 21 MPG Highway.
Toyota, Ford or Chevy trucks don't do any better.
I think we need to go back to building $3000.00 cars that fall apart in 3 or 4 years so people can have jobs building them.

Vikram

June 7, 2008 2:35 PM

The effect of Chrysler's incentives will be seen if they are being offered on Sedans (which I believe they are offering on a few models now) in the next few months. What will be interesting to see its effect on Chrylser's bottom line, and if Chrysler has hedged with oil futures.

Karl

June 9, 2008 10:55 AM

Chrysler builds a line of vehicles that are mostly GAS-GUZZLERS, correct? If they had a line of vehicles that were smaller, less expensive, and RELIABLE, then the $2.99 gas Marketing Campaign would have worked!! Few people really want pick-up trucks & SUV's now!! So much for the 8- cylinder HEMI!! The $2.99 gas promotion would have worked if it had been a ".99 cent for life" promotion, in my opinion. As Chrysler & Ford & GM try their best to sell vehicles, Honda keeps getting closer to introducing their "fuel cell" technology. Wait until this happens!!! Say BYE, BYE, to the "OLD BIG 3"!!!!!! Even the mighty T-REX is gone now, huh?

Manny

June 9, 2008 5:33 PM

Magazines like 'Motor Trend' and 'Road and Track' June issues show new Retro-Muscle cars on their front cover. I like the cars but I strongly doubt anyone will be buying them given the price of gasoline.

Dominic

June 10, 2008 10:08 AM

Jim From ohio

Chrysler already build cars that fall apart after 3 or 4 years...they don't cost $3000 though....
Lousy quality, mediocre engineering and poor workmanship are Chrysler core competencies, that company deserved to die long time ago...Frankly, I do not understand why is still around...
They should have learned their lesson from Hyundai...

MarkT

June 10, 2008 2:17 PM

Jim from Ohio missed the part where Detroit never stopped building cars that fall apart in 3-4 years, Chrysler being by far the worst, only now they are a bit more than $3k. Chrysler will be gone shortly, the Korean companies are already making better product and it's really only been 10 years of trying, that last 40 years of not trying will be the death of Chrysler

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