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Chrysler lineup gathering dust on showroom floors

4:00AM Saturday Jul 04, 2009

DETROIT: The latest numbers on vehicle sales show that Chrysler needs to quickly figure out how to navigate the car market as deftly as it did bankruptcy court.

Ford's Fusion midsize car outsold all eight Chrysler brand models combined in June. Chrysler's two minivans, which for years dominated their market segment, were outsold by the Honda Odyssey. Only one Chrysler model showed a sales increase over June of last year, the Dodge Challenger muscle car.

Chrysler emerged from bankruptcy protection after just 42 days on June 11, cleansed of much of its debt and labour costs. But with sales down 46 per cent from the first half of last year - a year in which Chrysler lost US$8 billion ($12.65 billion) - the company faces a huge challenge to make money again under its new Italian owner, Fiat.

Chrysler's poor June performance also casts doubt on whether the US Government's US$7 billion allocation will be enough to get the carmaker through the US sales slump, which is projected to last into next year.

"In this business, you're either going to succeed or fail with product," said Joe Barker, senior manager of North American vehicle sales forecasting for the CSM Worldwide consulting firm in Northville, Michigan. "Right now, Chrysler lacks a competitive product."

For its part, Chrysler says it was happy with the sales figures. Spokeswoman Kathy Graham said yesterday that Chrysler gained one percentage point of market share in retail sales to individual buyers. To Chrysler, that indicates people aren't penalising the company for having sought bankruptcy protection.

Yet, the Dodge Ram pickup, Chrysler's top-selling vehicle and for years among the top-selling cars and trucks in the US, fell off the list of top 10 sellers in June for the second straight month. Chrysler had no vehicles in the top 10 last month, according to Autodata.

The company's poor June performance was expensive, too. Chrysler led the industry in discounts, with an average incentive of US$4873 per vehicle, almost US$800 more than it spent in May, according to the automotive website.

Chrysler still has a lot of cars sitting on dealer lots even though all 12 of its assembly plants were closed for nearly two months and 789 terminated dealers sold much of their inventory at fire-sale prices. Chrysler ended June with 195,272 vehicles on dealer lots, a 71-day supply. Industry experts say a 60-day supply is optimal to reduce the need for sales incentives while providing enough selection for buyers.

Article Link:Chrysler lineup gathering dust on showroom floors - Business - NZ Herald News
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