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AutoBlog: Can't Win For Losing: Chrysler kills Cash for Clunkers incentives after running out of cars?

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Filed under: Plants/Manufacturing, Chrysler, Dodge, Jeep, Earnings/Financials

chrysler-showroom-sales-floor-getty-630.

What do you do with a program that is driving so many customers into your showrooms that inventory is now running low? If you are Chrysler, and it's the popular incentive plan tied to the government's C.A.R.S. (a.k.a. "Cash for Clunkers") program, you extinguish it and replace it with a new, less attractive version. Really.

The Wall Street Journal is reporting that as of Tuesday, Chrysler Group LLC will no longer automatically add another $4,500 of its own incentives on top of the $4,500 CARS rebate. Instead, the company will vary the size of the rebates based on vehicle brand and model.

The about-face is the result of a near-unbelievable turn of events for the struggling automaker. An overabundance of inventory forced Chrysler to shut down its factories earlier this year... and now it is faced with dealers complaining about low inventory levels on key vehicles like the Town and Country and Jeep Wrangler, with swelling waiting lists as the incentive program has proven too fruitful.

[source: The Wall Street Journal | Image: Scott Olson/Getty]

Can't Win For Losing: Chrysler kills Cash for Clunkers incentives after running out of cars? originally appeared on Autoblog on Mon, 03 Aug 2009 09:55:00 EST. Please see our terms for use of feeds.

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As nutty as this sounds at first, it does make sense. Satty mentioned very little in teh way of Patriots, which have been big sellers. Both my local dealer and the dealer in Peabody half lots that are about half empty.

The one in Peabody had maybe 5 Chargers, 3 Avengers, 3 non SRT Calibers, 3 SRT Calibers, 2 SRT 200Cs, 1 300C Touring, a few Journeys, a few vans and some trucks.

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What's nutty is that Chrysler is running out of supply. That means that people are out there saying "these cars fit my needs best!" and after years of that NOT BEING THE CASE, and the cars NOT CHANGING in the past month, the logic behind that kinda scares me...

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What's nutty is that Chrysler is running out of supply. That means that people are out there saying "these cars fit my needs best!" and after years of that NOT BEING THE CASE, and the cars NOT CHANGING in the past month, the logic behind that kinda scares me...

Well they probably do fit their needs, most of them just not as nice as their normal MSRP suggests they should be.

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Well they probably do fit their needs, most of them just not as nice as their normal MSRP suggests they should be.

My point is that with all the discounts and incentives available right now, it blows my mind that CHRYSLER--out of all the automakers--is facing a shortage in supply. CHRYSLER.

And the incentives apply equally to every manufacturer, so if Chrysler's MSRP's are uncompetitie without C4C, then they should still be with C4C.

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Croc, you bring up a good point, however, I believe that Chrysler has been doubling the CARS rebate. So the buying public is saying "Chrysler, your cars are worth the 9,000 discount compared to other vehicles from other automakers."

The Wall Street Journal is reporting that as of Tuesday, Chrysler Group LLC will no longer automatically add another $4,500 of its own incentives on top of the $4,500 CARS rebate. Instead, the company will vary the size of the rebates based on vehicle brand and model.

So Chrysler is going to offer less ADDITIONAL incentives, not kill the CARS program.

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the auto market needs to stabilize, as does gas price. the ups and downs of both, the society cannot deal with, causes too much turmoil.

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Croc, you bring up a good point, however, I believe that Chrysler has been doubling the CARS rebate. So the buying public is saying "Chrysler, your cars are worth the 9,000 discount compared to other vehicles from other automakers."

So Chrysler is going to offer less ADDITIONAL incentives, not kill the CARS program.

Was Chrysler NOT incentivizing prior to C4C? Seems like Chrysler always has about 2-5k in incentives at any given time.

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Yeah, but nobody else was offering an additional 4,500 off on their CARS eligible vehicles. GM was doing like 1500 i don't know what ford was doing.

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Yeah, but nobody else was offering an additional 4,500 off on their CARS eligible vehicles. GM was doing like 1500 i don't know what ford was doing.

Doesn't matter. So Chrysler is now offering only $3k in incentives RELATIVELY compared to GM. So $3k is enough to go from NOT MOVING INVENTORY to RUNNING OUT OF INVENTORY?

Just seems bizarre as hell.

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Didn't Chrysler stop production for a little while during bankruptcy proceedings?

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