Chrysler sales fall despite incentives to lure Toyota customers

Article by Christian Andrei, on August 25, 2010

Chrysler Group, which is among the companies that are offering incentives to pull in Toyota customers, actually does need the boost as it had failed to report a sales gain in January. Chrysler sales in January dropped by 8% from January last year a development that's made all the more dismal since it was a very low point for Chrysler.

Sales in January 2009 had dropped 55% from January 2008. To illustrate it in actual units sold two years ago in January, Chrysler sold 137,392 cars and trucks. But in January 2010, it only sold 57,143.

Other carmakers that are dangling incentives in front of Toyota customers include Ford Motor Co. (sales up 25% in January), General Motors Co. (up 14%) and Hyundai Group (up 13%). Chrysler CEO Sergio Marchionne is believed to be adamant to reining in incentive spending. So far, the company has shown incredible discipline.

Edmunds said that in January, Chrysler spent an average of $3,061 per vehicle, while GM spent $3,103 and Ford spent $3,095.

Some dealers oppose this strategy, saying that instead, Chrysler should be allocating more money to boost sales while the company prepares replacements for such vehicles as the Jeep Grand Cherokee and to develop new, Fiat-based models.

Chrysler had been one of the few carmakers that didn't want to exploit Toyota's current situation. But last Friday, it changed its tune and announced the incentives for some of its vehicles.

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