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Chrysler to Offer Rebates for Most 2004 Models

September 03, 2003|From Bloomberg News

DaimlerChrysler's Chrysler unit, the third-largest U.S. automaker, is adding incentives to most 2004 models to compete with General Motors Corp. and Ford Motor Co. and reverse a 4.7% sales decline this year.

"Instead of following, we're trying to aggressively set the pattern for incentives," spokesman James Kenyon said.

The rebates, from $500 to $3,000 on almost all 2004 models, replace incentives of up to $2,000 offered on nine models in August, Kenyon said. Incentives on 2003 models are mostly the same except for a boost to $2,500 from $1,500 for rebates on PT Cruisers. The rebates expire Oct. 31.

"I'm not sure if they can be a leader in incentives," said Andrew Palmer, bond manager for ASB Capital Management Inc. in Washington, who manages $1.6 billion in debt, including DaimlerChrysler bonds. "I think General Motors still has more clout at setting prices."

Chrysler Chief Executive Dieter Zetsche said in a May e-mail to employees that the automaker would redirect its marketing to ads that emphasize incentives, reversing plans to keep incentives lower than those from GM. The firm spent $100 million this summer promoting sales incentives, Kenyon said.

"We will be competitive in the marketplace," said GM spokeswoman Deborah Silverman, declining to comment on Chrysler's incentives. GM plans to disclose its incentives for September today, she said.

Chrysler incentives rose to $4,079 per car and truck in August from $3,986 in July, according to preliminary numbers from CNW Marketing Research Inc., less than the industry average of $4,195.

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