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Chrysler Asks Its Dealerships to Hold Line on PT Prices

March 15, 2000|John O'Dell

The PT Cruiser is a vehicle that can make or break a lot of Chrysler dealers: The company's advertising will hit hard on the theme that the Cruiser is an affordable five-seat car, but there are already reports of dealers seeking premiums of $2,000 to $3,000 above the manufacturer's suggested retail price for those who just have to be the first on their block to park one of the uniquely styled vehicles in the garage.

For its part, Chrysler has priced the base PT Cruiser at $16,000, while the fully loaded Limited Edition version tops out at just under $20,000. Even with every factory option Chrysler's Mopar unit offers, it would be difficult to pay more than $22,000.

That puts the Cruiser squarely into affordable territory, and Chrysler is terrified that some of its less scrupulous dealers will give it--and the car--a black eye by gouging customers during the first few months of sales, before the delivery pipeline fills and supply catches up with demand.

"We are urging dealers to please not do that," said Tom Gale, chief of design and product planning for DaimlerChrysler's North American operations, when asked about such concerns. "But we cannot control dealer pricing," he added, employing the industry's standard explanation of why it happens.

Not all dealers are taking the low road, of course.

"Our theory is that in six months or so it just becomes another car, so how do we look you in the eye and say, 'Sorry we charged you an extra $2,000 for it, but please come back and buy another car from us someday,' " said Steve Goldman, general manager of Moothart Chrysler-Plymouth in Cerritos.

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He and colleagues, who operate one of the largest Chrysler retailers in Southern California, believe the Cruiser will become the brand's best-selling car. Moothart already has 150 names on its PT Cruiser waiting list, Goldman said.

But as happened with Volkswagen dealers upon the introduction of the New Beetle in March 1998, many of those who condemn premium pricing do practice a modified version of it themselves by adding high-profit items such as alloy wheels, pinstripes and no-wax paint protection before putting the cars on the lot.

Although the practice may make it difficult for consumers to find a true base-price model, dealers justify it as a way to increase profit while actually giving the customer something of value for the extra cost.

"As a five-star Chrysler dealer, it is our policy not to sell for over the MSRP unless we add additional equipment," Goldman said, adding that at least in the first few months, while supplies of the Cruiser are limited, Moothart and other dealers "might add things like wheels and tires or a [moon roof] on low-end models."

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