Chrysler dealers ask for ad changes after 25% sales drop

Chrysler dealers have asked the company to pull new television ads and restore regional marketing budgets after U.S. sales declined 25 percent in November, Bloomberg.com just reported. The advertisements, which began in September, focus on lifestyles, and vehicles are shown only briefly.   What the dealers prefer are Jeep, Chrysler and Dodge ads that show the vehicles more, highlighting their features, and bargain prices, to remain competitive.  AIM Group recently reported on advertising and incentive changes at Chrysler.

Frustrated that narrower incentives and plunging sales are hurting their profits, Chrysler dealers are being quite vocal about the marketing strategies of Chrysler CEO  Sergio Marchionne. According to Bloomberg.com sources, sales dropped because of a September change in regional ad budgets, previously timed to match local vehicles shipments.  The lack of production during Chrysler LLC’s bankruptcy disrupted the retailers’ cash flow and advertising budgets.

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

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.

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. The company plans to radically alter three fourths of its vehicle lineup for 2010, and introduce new models, to gain share and restore sale.  

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