Chrysler Group to offer new incentives, won't match GM's offers

Monday, January 7th 2002, 12:00 am
By: News On 6

DETROIT (AP) _ The Chrysler Group of DamilerChrysler AG plans to announce a new incentive plan this week that will feature $2,000 cash back on 2002 Dodge Durango sport utility vehicles, its marketing chief said Monday.

This latest salvo in the vehicle incentive war means Chrysler is striking out on its own, refusing to match General Motors Corp.'s newest offer of $2,002 cash back, which replaced the successful zero-percent interest come-ons that ignited the battle.

GM was the first to offer no-interest financing in September, and Chrysler and Ford Motor Co. followed suit. The last of those offers expires next week.

Chrysler Group marketing chief Jim Schroer said the Durango rebate, which will be offered through February _ is part of an entirely new, multilayered marketing approach rather than a single incentive.

``We don't think we should lead the communication with the consumer by the size of the discount. We should lead the communication with the consumer with the value of the product,'' Schroer said at the media preview of the North American International Auto Show.

``We call that `Pride and Product,''' he said.

Schroer said the company wants to promote its products as ``aspirational vehicles'' _ those consumers hope to be able to attain regardless of incentives.

One industry analyst said the strategy is sound, but only if the company has the products to back it up.

``The consumer is less concerned about incentives on vehicles that excite their emotions,'' said Chris Cedergren of the automotive marketing firm Nextrend.

Chrysler ``will be there in three, four years,'' he said. ``But right now their products just don't have that standard to really be positioned as aspirational vehicles.''

The new strategy will include promoting vehicle quality, the company's seven-year/100,000-mile extended powertrain warranty, and then an additional offer of cash or low-interest financing.

``We'll see where we are with the product value compared with our competitor, add seven/100, and fill in the difference with the incentive,'' Schroer said.

He said no decision had yet been made on whether to extend the seven/100 powertrain warranty program beyond its March 31 expiration.

The program, called ``Home for the Holidays,'' was supposed to expire at the end of 2001, but the company said last week that it was extending the offer to increase dealer showroom traffic, sales closing rates and sales.