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http://www.chicagotribune.com/news/chi-ap-chrysler-gasoline,0,7870236.storyChrysler tries luring buyers with gas deal as sales drop
By TOM KRISHER | AP Auto Writer
6:37 PM CDT, May 6, 2008
DETROIT - As gasoline tops $4 per gallon in some areas and crude oil spikes to new records, no major automaker has been hit harder than Chrysler LLC.
The No. 4 U.S. auto seller still relies on trucks and sport utility vehicles for 70 percent of its sales, and buyers are shunning the more fuel-efficient models it has introduced in the past few years.
With sales down 23 percent in April and nearly 18 percent for the first four months of the year, the Auburn Hills company on Monday night tried to pull some buyers back. The maker of Chrysler, Dodge and Jeep vehicles announced an offer that caps the price of gasoline at $2.99 a gallon for three years for people who buy or lease new vehicles from Wednesday through June 2.
The offer covers most models and is based on 12,000 miles of driving per year and the vehicle\'s government fuel economy rating. Customers will get a card for buying gas that is linked to their own charge account, Chrysler said. The customer will be billed $2.99 a gallon, and Chrysler will pay the rest.
Chrysler said it hopes the program will attract buyers worried about the volatility of fuel prices and the cost of driving.
"It\'s a way to give (customers) peace of mind," Steven Landry, executive vice president for North American sales, said in a conference call.
Chrysler\'s major competitors, Ford Motor Co., Toyota Motor Corp., General Motors Corp., and Honda Motor Co. all said they would not follow with their own subsidies, but Suzuki Motor Corp. has made a similar offer in the U.S. with free gas for the summer.
Industry analysts say Chrysler\'s sales dip is especially troubling because unlike other automakers, Chrysler lacks any big hits as the shift to small cars gains momentum.
"The more fuel-efficient vehicles that they have really aren\'t all that competitive when you compare them to other automakers," said Erich Merkle, vice president of industry forecasting for the consulting company IRN Inc. in Grand Rapids.
Chrysler says its lineup includes five models under $20,000 that get 28 miles per gallon or better in highway driving. It also rolled out a lifetime engine and transmission warranty last summer.
Still, the Chrysler Sebring, a midsize car introduced late in 2006 that gets up to 30 mpg on the highway, hasn\'t caught on with consumers. Sales of the sedan, the most popular version, were down almost 54 percent in April from a year earlier and off 3.2 percent in the first four months of the year, according to Autodata Corp.
Even sales of the Dodge Caliber, a small car introduced in early 2006 to capture buyers fleeing from gas-hungry SUVs, were down 5.2 percent in April, although they were up 10 percent for the first third of the year. The Caliber gets up to 29 mpg on the highway.
By brand, Jeep was down 12.9 percent, Dodge was off 17 percent and Chrysler was down 23 percent from January through April. Even the Chrysler and Dodge minivans, once surefire hits for the company, aren\'t selling well.
This comes as sales of small cars overall rose 18.6 percent in April and 7.5 percent for the first four months of the year. Midsize car sales also grew 6.5 percent last month.
Merkle said the exterior styling, driving enjoyment and overall quality of the Chrysler small and midsize car interiors is below competitors.
"It just wasn\'t very good product. I don\'t know how else to say it," Merkle said.
Jack Nerad, executive market analyst for Irvine, Calif.-based Kelley Blue Book, said Chrysler\'s brands have an image of big, tough trucks and large fast cars, counter to the current market.
"In fact, their reputation is kind of going in the opposite direction. Big pickup trucks, V-8 powered American sedans," he said. "They\'re not exactly well-positioned for the current market."
When asked about the sales drops, Chrysler Chairman and CEO Bob Nardelli said Monday the truck segment has been particularly hard hit, and Chrysler has "always been a very strong truck company."
So far this year, the U.S. light truck market, which includes SUVs, is down 13.5 percent compared with the first four months of 2007.
He said Chrysler also has seen dramatic shifts away from the Sebring as well as the Dodge Caliber and Avenger. But he\'s pleased with the introduction of the Dodge Journey crossover, which he said is the most fuel-efficient vehicle in the segment, and what he\'s seeing with minivans.
Nardelli said the other major factor affecting sales is Chrysler\'s decision to reduce the number of vehicles sold to fleet buyers such as rental car companies.
"It was a conscious decision to help improve the residual value and enhance the overall cost of ownership," he said. "Part of that reduction is by design, some of it is a mix-shift within our portfolio."
Merkle said that until Chrysler gets new products, it\'s likely to keep losing sales and money for several years.
Buyers\' actual savings from Chrysler\'s gas offer will depend on what happens to gas prices over the next three years, but based on the current national average price of $3.61 a gallon reported by AAA, someone buying a 2008 Dodge Durango four-wheel-drive sport utility vehicle with a 5.7-liter V-8 engine would save about $414 per year.
The Durango is one of Chrysler\'s least fuel-efficient vehicles, getting 13 miles per gallon in the city and 18 on the highway, according to the U.S. Environmental Protection Agency. The savings calculation is based on its highway mileage.
GM tried a gas payment promotion two years ago in Florida and California with little impact on sales, company spokesman John McDonald said Tuesday. GM instead is focusing on making vehicles more fuel efficient because that\'s what customers are demanding, McDonald said.
Ford spokesman Jim Cain said the company has tried similar programs regionally but also has decided to focus on more efficient engines and transmissions and other measures.
Spokesman John McCandless said Toyota is focusing incentives on particular models, especially older ones that are near replacement or highly competitive segments such as pickup trucks.
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Associated Press writers Jeff Karoub in Auburn Hills and David N. Goodman in Detroit contributed to this report.
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On the Net:
Chrysler LLC: http://www.chryslerllc.com
Now my question is, what if for some reason gas goes below $2.99 a gallon.... do you just get screwed haha
i think its a cap, i.e. it wont go over that price, but if it is under, you will simply pay what the price is
nice. i\'m in the market for a new car and REALLY want a Wrangler but was a worried about the rising fuel cost but in the back of my head said F it i\'ll just deal and drive less. With news like this i just might have to take a ride to the dealership. i hope they extend this offer through the summer because that was when i was going to wait till
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
god bless my little corolla. 28-30 mpg.
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
03 grand cherokee and i love it so much...i really do but it is gonna send me to the poor house...
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
I\'m actually thinking of buying a liberty...are they any good?
Also, it\'s only for 12k miles, which for me is about 6 months.
god bless my little corolla. 28-30 mpg.
God bless my bicycle. Infinity MPG
I was curious how they were going to make this happen, but it makes sense they give you a special gas card. This sounds like a pretty good deal, too bad i have no money for a new car and/or need a new car.
nice. i\'m in the market for a new car and REALLY want a Wrangler but was a worried about the rising fuel cost but in the back of my head said F it i\'ll just deal and drive less. With news like this i just might have to take a ride to the dealership. i hope they extend this offer through the summer because that was when i was going to wait till
With the amount of highway driving you do, I think this would be a horrible car for you. Wranglers are the most unaerodynamic cars ever made. It\'s like driving a wall down the highway.
You should buy a robot car
^^^^^^^ :lol:
Whatchutalknbout SLIM
i\'m making sure to get a 6 speed, i hope that helps
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
I\'m actually thinking of buying a liberty...are they any good?
Also, it\'s only for 12k miles, which for me is about 6 months.
I adore my Liberty. Drives phenomenal. No complaints. And I am the kind of person every car I\'ve owned previously was a big fat lemon. This one has been a jem. I bought it last March. It had one previous owner (it had come off of a one year lease.) I would recommend doing something similiar, since the newer models are basically the same as the older ones....and you get them a little cheaper....
the one thing i regret was not getting the model with the sun roof.
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
I\'m actually thinking of buying a liberty...are they any good?
Also, it\'s only for 12k miles, which for me is about 6 months.
I adore my Liberty. Drives phenomenal. No complaints. And I am the kind of person every car I\'ve owned previously was a big fat lemon. This one has been a jem. I bought it last March. It had one previous owner (it had come off of a one year lease.) I would recommend doing something similiar, since the newer models are basically the same as the older ones....and you get them a little cheaper....
the one thing i regret was not getting the model with the sun roof.
thats why i\'m going for the Wrangler
why couldnt they have been doing this deal when i bought my jeep...bummer...65 bucks to fill it up...gonna have to sell my soul and get another job....
what kind of jeep? You and me both. I have a Liberty and its killing me on gas. THOUGH I LOOOOVE TO DRIVE it everywhere...
I\'m actually thinking of buying a liberty...are they any good?
Also, it\'s only for 12k miles, which for me is about 6 months.
I adore my Liberty. Drives phenomenal. No complaints. And I am the kind of person every car I\'ve owned previously was a big fat lemon. This one has been a jem. I bought it last March. It had one previous owner (it had come off of a one year lease.) I would recommend doing something similiar, since the newer models are basically the same as the older ones....and you get them a little cheaper....
the one thing i regret was not getting the model with the sun roof.
thats why i\'m going for the Wrangler
I always wanted a wrangler....but i let the people around me advice me to get a more "grown up" option because i had to be practical because soon i would entering my 30s. whatever that means. Every time i see a wrangler with no top, i turn green in envy....