Chrysler March U.S. Sales Down 10% on Incentive Cut (Update1)
March 24, 2010, 4:02 PM EDT(Adds analyst’s comment in the fifth paragraph.)
By Mike Ramsey
March 24 (Bloomberg) -- Chrysler Group LLC said March sales have declined 10 percent to 12 percent from a year ago as the automaker reduces incentives.
The company is shifting marketing spending to advertising and away from rebates and subsidized financing, said Fred Diaz, sales chief for Chrysler. The Auburn Hills, Michigan-based automaker sold 101,001 vehicles in March 2009.
“March of last year, quite frankly, we were buying the market,” Diaz said at an event to discuss marketing for the Ram truck brand. “We had huge incentives, huge rebates, which were degrading the brands and the corporation and creating bad practices which is part of what drove us into bankruptcy.”
Sales at Chrysler, which exited court protection on June 10 with Turin, Italy-based carmaker Fiat SpA as a 20 percent owner, may decline in coming months from last year until the shift to advertising motivates buyers, he said. Chrysler will report sales for the full month of March on April 1.
Chrysler was “quiet for so long that it enabled consumers to forget about them,” said Stephanie Brinley, an analyst with AutoPacific in Troy, Michigan. “It’s been such a tough year. It’s going to take them longer to get back because they fell harder and farther than anyone else.”
Sales at Chrysler fell 3.2 percent this year through February while the overall industry rose 9.9 percent. General Motors Co. has said sales are up 13 percent and Ford Motor Co.’s sales have risen 34 percent.
Dealership Sales
Chrysler’s incentive spending in February slid 31 percent from a year earlier, according to Autodata Corp. in Woodcliff Lake, New Jersey.
Sales at the company’s dealerships, which exclude business and government fleet business, have risen 50 percent this month from February, Diaz said. Consumers have been attracted to packages, such as a free upgrade to a V-8 engine in its Ram pickup truck, he said.
Ford is having a good sales month in March, Chief Financial Officer Lewis Booth said today in a Bloomberg Television interview. Ford topped GM in February to lead U.S. monthly auto sales for the first time since 1998.
U.S. sales may run at an annualized rate of 12.1 million vehicles in March, compared with a pace of 9.9 million a year earlier, researcher J.D. Power & Associates said on March 19.
--With assistance from Bill Koenig in Southfield, Michigan. Editors: Steve Walsh, John Lear
To contact the reporter on this story: Mike Ramsey in Southfield, Michigan, at mramsey6@bloomberg.net
To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net.
