Chrysler working to improve the resale value of its vehicles

Article by Christian Andrei, on December 10, 2010

To increase the resale value of its vehicles, Chrysler Group LLC is working to increase revenue from leases and improve the company's image. Chrysler is hoping to repeat the success that it had with the redesigned Jeep Grand Cherokee with its other models.

Researcher ALG Inc. said that because of upgrades to the latest model and Chrysler's volume and pricing strategy, the residual value of the Grand Cherokee's four-wheel-drive version has been boosted to 45% in the third quarter compared to 35% a year ago.

Residual values are projected resale values that determine buyers' monthly lease payments. Chrysler made use of tests that simulated three years of use during the development of the Grand Cherokee to raise its reliability.

The vehicle's third-quarter deliveries increased by 35% while a higher percentage came from leases. Chrysler hopes to replicate this success with 15 other new or refreshed models. Dan Frost, a Chrysler dealer in suburban Detroit, said that he is convinced that the outstanding sales rate of the Grand Cherokee is a result of the leasing factor.

Edmunds said that the Grand Cherokee's percentage of sales from leases increased to 25% in September from 2% in the same month last year.

Chrysler's third quarter earnings were its best since the company had emerged from bankruptcy. Grand Cherokee sales contributed to the narrowing of its third-quarter net loss to $84 million and its net revenue rising 5.2% from the second quarter to $11 billion. [via detnews]

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