Chrysler Raises Incentives in Price War

DETROIT October 3, Reuters reported that the Chrysler side of DaimlerChrysler AG sweetened the pot for customers shopping for new cars and trucks on Thursday by extending its interest-free loan deals and offering more generous cash rebates.

Following in the footsteps of General Motors Corp. and Ford Motor Co., which both raised their sales incentives on Tuesday, Chrysler said it would now offer five-year no-interest loans on its minivans and 2.9 percent 60-month loans on all 2003 cars that had previously been sold with an interest rate of 4.9 percent.

Zero percent loans for durations of less than five years will now be offered on 23 different 2003 model cars and minivans, a company spokesman said.

The No. 3 U.S. automaker also shaved 2 percentage points off its standard 36- and 48-month loans and raised "cashback" deals on popular models, including the Jeep Grand Cherokee sport utility vehicle, to $2,500 from $1,000.

Chrysler spokesman Marc Henretta said the new incentives program, which began on Thursday, would remain in effect through Nov. 4.

He stressed that Chrysler was also still offering a 7-year, 70,000-mile vehicle warranty, which is longer-lasting than the standard 3-year, 36,000 mile warranty offered by its competitors.

GM introduced zero percent loans to help bolster consumer demand soon after the Sept. 11 attacks on the World Trade Center and Pentagon, and Ford and Chrysler were both quick to match the deals offered by the world's largest automaker.

Henretta insisted that Chrysler is spending less on incentives than its cross-town rivals, however, whose profit margins have been squeezed by Detroit's escalating price war.

"We've never followed GM specifically," Henretta told Reuters.

"We're here to do our own thing and we think these programs offer a great value for our customers," he added. "We're right where we want to be and we're very competitive in the marketplace."

Chrysler was up 27 cents, or 0.76 percent, in morning trading on the New York Stock Exchange on Thursday at $35.66.