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Press says ‘sales bank’ hasn’t been revived

Posted Tuesday, Dec 16, 2008 at 2:57 pm in Company News

In a story in today’s online edition of Automotive News that corrects a story in yesterday’s print edition of the publication, Vice Chairman and President Jim Press said that Chrysler LLC is not reviving its controversial “sales bank” for new vehicles that had been produced without dealer orders.

Press made his comments following the Automotive News’ publication of a story that detailed his appeal last week to dealers to purchase 12,000 unassigned vehicles. The story said the unsold vehicles marked a revival of Chrysler’s sales bank through the end of the month.

In an interview today, Press confirmed that he had made that appeal during a Dec. 12 conference call with dealers. But he explained that Chrysler originally had produced those vehicles on the strength of purchase orders that later were canceled.

Those canceled orders fall into four categories:

• Cars originally ordered by dealers who subsequently were unable to obtain loans to pay for vehicle inventories.

• Vehicles ordered by fleet customers, who later canceled.

• Vehicles built for dealerships that have now closed.

• Vehicles left unsold from dealership sales promotions.

Dealers came to hate the term in 2006, when Chrysler built vehicles without dealer orders then pressured dealers to take them.

That year, the number of unassigned vehicles—dubbed “fence units”—peaked at nearly 100,000.

Jim Arrigo and Hayden Elder, co-chairmen of the Chrysler Dodge Jeep® national dealer council, say the company’s appeal to dealers last week does not constitute a return of the sales bank.

“When we were doing sales bank, there was a lot of pressure,” Arrigo, owner of Arrigo Dodge-Chrysler-Jeep in West Palm Beach, Fla., said. “It’s totally different this time. There isn’t somebody calling up.” (Automotive News)
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