Cars and Drivers
0% Financing for 72 Months as Chrysler Tries to Dump Cars
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Fiat Chrysler Automobiles N.V.’s (NYSE: FCAU) Chrysler division apparently has a problem. It offers 0% financing for 72 months (and as much as $1,500 cash back) for some of its 2015 models. It is inventory clearing time.
The offer covers some of Chrysler’s 200, 300 and Town & Country models. Although Fiat Chrysler tends to do well as a company, most of that success is due to Jeep sales and sales of its popular full-sized pick, the Ram. Chrysler brand sales fell 14% in August to 25,580. Only the 200 model did well during the month.
Chrysler is also plagued by two other factors. The first is that it has high days to turn, based on analysis by car research firm Edmunds. The Chrysler Group number was 78 days in August, against an industry average of 62. That means Chrysler cars stay on dealer lots longer than most brands, which is a dealer nightmare. Chrysler’s attractive financial deals help dealers as much as Fiat Chrysler.
Also, none of the Chrysler cars are “best sellers” based on industry measures. There are no Chrysler models among the 20 best-selling vehicles for August. The list is dominated by Honda Motor Co. Ltd. (NYSE: HMC), Toyota Motor Corp. (NYSE: TM) and Ford Motor Co. (NYSE: F) vehicles. So, Chrysler models have to compete against much more popular vehicles.
ALSO READ: The 10 Cars Most Likely to Be Dumped
Another problem Chrysler has is that many consumer research firms rate it poorly. In the J.D. Power 2015 U.S. Initial Quality Study, Chrysler ranked third from the bottom, well below the industry average. It did just as poorly in the ACSI Automobiles Report 2015. How much these studies affect buying patterns may be an open question, but the grades cannot help Chrysler’s image.
It is model changeover time. The 2016 cars are coming to dealers, if they are not already there. Inventory of 2015 models is an anchor. Time to sweep them off the lot. Chrysler has become very aggressive trying to do so.
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