I wrote a few weeks ago about Chrysler's new sales gimmick: buy a new Chrysler and pay no more than $2.99 a gallon for gas for three years.Well it seems that the sales promotion is working, at least in the short run. Chrysler is reporting that sales in May are up 15% compared to April. Vice Chairman
But the real question is whether this is enough to turn Chrysler around. I was skeptical when I first heard about the plan, and I remain so. The cheap gas promotion is no doubt increasing foot traffic at Chrysler dealers and even moving some sheet metal, but the overall picture for Chrysler remains pretty bleak. Chrysler sales are down 18% for the year, and sales in May 2008 will be weaker than in May 2007 even with the promotion. So the cheap gas offer is probably just filling a few holes in a sinking ship.
Current projections call for fewer car sales in 2008 than in 2007, with the American car market shrinking by something like one million cars, down to 15 million. Given the poor mileage of most Chrysler products, I suspect that even with the $2.99 gas sales promotion, a disproportionate number of those unsold vehicles will be Chryslers. Even guaranteed cheap gas can't disguise the fact that Chrysler isn't selling the well-designed, fuel efficient cars that Americans are increasingly demanding.
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Reader Comments (Page 1 of 1)
5-21-2008 @ 12:43AM
KenGirard said...
If only someone would have had the forethought to create a small, fuel efficent, alternative energy car... Oh, wait. All the Detroit car companies said Americans don't want them. The proof they offered: Americans were not buying them, and they were to hard to make.
High school kids made a 0-60mph in 4.5 seconds biodiesel sports car with a $30k budget. There goes the 'Hard to make'.
Honda can't keep the Prius on the lot. There goes the 'Americans aren't buying them'.
What does Detroit offer? Hybrid SUVs, and max hp sports cars.
In 1996 I had a 1984 diesel VW Rabbit. It got 80mpg. I miss it every time I fill up.
5-21-2008 @ 11:22AM
Ducati Dude said...
Shame your post has so many negative overtones. The word gimmick, which has a negative conotation, doesn't really apply. The $2.99 gas price is an incentive offer, just like a cash rebate, or a lower interest rate.
Chrysler has a new logo, the one you have used is several years old. Also, Chrysler's Vice Chairman's name is Jim Press, not Bill Press. Remember the fairly prominent guy who used to work for Toyota?
Undertand, you can't stop and turn a battleship on a dime. For years, Chrysler has been building what the market wanted: pickups and SUV's, which don't get good gas mileage. Now that gas prices have skyrocketed in the last couple years, consumers preferences are shifting away from pickups and SUVs. It is going to take a few years to plan, design, test, and build smaller more fuel-efficient vehicles.
Ken, I am not surprised that Honda can't keep Priuses on the lot. Actually, Honda has never had any Priuses on their lots- the Prius is built by Toyota.