Dealers ask TV ads pulled

[rickaren]

Chrysler Dealers Ask for New Ads to Slow ‘Painful’ Sales Plunge


Dec. 4 2009

Chrysler Group LLC dealers have asked the company to pull new television ads and restore regional marketing budgets after U.S. sales declined 25 percent in November, people familiar with the matter said.

Members of Chrysler’s national dealer council, an advisory body to the automaker, called for the ads to be stopped in a phone call with the Auburn Hills, Michigan-based company’s sales leadership this week, said two people with knowledge of the request who asked not to be identified because the conversation was private.

Dealers, frustrated that narrower incentives and plunging sales are hurting their profits, are pushing back against Chief Executive Officer Sergio Marchionne’s strategy. His five-year business plan, presented last month, aims to rebuild the company’s brands and reduce incentive spending. The transition could be “painful,” he said.

“It is a little difficult for us to understand because it is far different from what we were used to seeing,” said Larry Reid, owner of White Bear Dodge in North White Bear Lake, Minnesota. Reid was not on the call with management. “The message to us is that it is branding, branding, branding, and maybe that will work.”

The advertisements, which began in September, focus on lifestyles, and dealers complained that some only briefly show vehicles. One that began running last month shows ticking clocks while a voice describes a Jeep owner’s desire to not be constrained by the daily grind. In the final moments, it shows a Wrangler along with the tagline “I live. I ride. I am. Jeep.”

Show Vehicles

The dealers would like to have Jeep, Chrysler and Dodge ads that show the vehicles more and highlight features, price and available bargains to counter marketing claims of other automakers, the people said.

“It’s always a tug of war,” said Gary Dilts, the senior vice president of consumer research firm J.D. Power & Associates and former sales chief at Chrysler. “You’ve got Marchionne trying to do a 5-year plan and build a brand, and a dealer trying to hit a 30-day number. The tension is good, and it’s necessary.”

Chrysler emerged from bankruptcy June 10 with Marchionne as CEO and Fiat SpA as owner of 20 percent. He holds the same post at the Turin, Italy-based carmaker.

“The new Chrysler Group LLC is putting the customer first and has a laser-like focus to ensure the tough but necessary decisions are made now, ensuring a strong, profitable company long-term,” the automaker said in an e-mailed statement.

Regional Budgets

Chrysler is reviewing its advertising agencies. BBDO Worldwide Inc., the auto company’s main agency, said it would close its Detroit office at year’s end unless its contract was renewed. Chrysler hired GlobalHue of Southfield, Michigan, to create the Jeep campaign. A new campaign, called “My Name is Ram” was created by the Richards Group of Dallas.

Sales were also depressed by a change in September to regional advertising budgets, the people said. They had been based on vehicle shipments, so dealer groups in some areas previously had much more to spend. The lack of production during Chrysler LLC’s bankruptcy disrupted the retailers’ cash flow and advertising budgets.

Now the spending is controlled in Auburn Hills and the result has been spreading the advertising funds equally across brands and markets for consistent communication.

Without the changes, some markets would have had no money to spend on advertising in the fourth quarter, said Jodi Tinson, a Chrysler spokeswoman. The system is being evaluated, and it is too early to say if it might change again, she said. She declined to comment on the dealer frustration with the ads.

Cutting Incentives

Chrysler also has been reducing incentive spending. Average incentives for Chrysler fell 6.8 percent, or $262 per vehicle, in November compared with a year earlier, according to Autodata Corp., based in Woodcliff Lake, New Jersey.

Chrysler’s U.S. sales declined 25 percent in November to 63,560 while the overall industry was unchanged from the previous year. The company’s market share declined to 8.5 percent from 11.4 percent a year earlier.

Sales to retail customers, excluding those to businesses and governments, were 33,000, about half Chrysler’s total sales. The company’s share of the U.S. retail market was 5.5 percent, one person familiar with the sales said. The company, which doesn’t typically announce such figures, said in February that its retail market share was 11 percent for the month.

Chrysler in its 5-year plan aims to have a 10 percent share of the U.S. market in 2010, rising to 13 percent in 2014. The market share goal would require a reversal in the 38 percent sales decline the company has posted this year, the most of any major automaker.

Chrysler is planning to roll out new or radically altered versions of 75 percent of its vehicle lineup in 2010 as a means to gain share and restore sales.

LINK:Chrysler Dealers Ask for New Ads to Slow ?Painful? Sales Plunge - Bloomberg.com

These must be the same Dealers that demanded the original "Nitro" TV ads be pulled too! No doubt in my mind there were wrong! If it had not been for those far out ads I would never have considered buying one!