Chrysler Hopes To Boost Sales By Offering 3-Yr. 'Gas Cap' Card To Owners
RiddimRyder said
12:25 05/06 2008
This is a classic case of curing what ails you by trying to control what's out of your grasp. But will it be enough to convince you to buy a potentially gas guzzling car?
Like most automakers, Chrysler is suffering the slings and arrows of the outrageous fortune it takes to buy gas. Sales are of its trucks and SUVs are down 18 per cent so far this year and falling fast, as non-stop oil increases and the pinch at the pumps create endless gas pains for economy-conscious drivers.
So while the giant car maker can't control the price of a fill-up, it's decided to do the next best thing - pay for Chrysler owners to fuel their vehicles.
The giant manufacturer has announced a program that will set a cap on the rate owners of some of its less fuel efficient vehicles pay for gasoline.
It would provide a card with each car purchased that will allow participants to pay just $2.99 a gallon in the U.S. no matter what the marquee price is actually showing. Current rates are well over $4 across the border.
Other automakers have come up with similar plans, but Chrysler is the first in history to guarantee it for three years or just over 19,000 kilometres. It's a risky idea as the price of crude continually swells. "This could be a game-changer in terms of how vehicles are sold in the marketplace," maintains Steve Landry, Chrysler's head of North American sales.
The company claims its market research shows consumers don't have a problem with its vehicles, just the cost to run them. So it's trying to take that concern out of the equation. "One of the things that weighs heavily on people's minds is the volatility of fuel prices," agrees vice chair Jim Press.
It's expected the concept would save about US$13,000 a year on trucks and around US$800 for hatchbacks.
But not everyone likes the idea. Environmentalists argue artificially influencing the price will simply get people to spend more on gas instead of conserving or seeking alternates and that Chrysler should concentrate on building more fuel efficient vehicles.
The concept will be in dealers in the U.S. by May despite the objections, but will exclude such gas guzzlers as the Dodge Viper and the Challenger muscle car.
There's no word yet on when or if the incentive will also be available in Canada but if it causes the sagging car company to experience a sales spurt down south, there's a chance that it could not only happen here, but other companies will jump on the bandwagon.
Something has to help the flagging industry. Chrysler lost $1.6 billion in 2007 and overall sales for all the big automakers dropped 14 per cent in April.
The downturn in trucks has especially hit the sector hard. It was one of the main reasons GM announced huge cuts last week, which will see nearly 1,000 jobs disappear from its Oshawa plant.
This is a classic case of curing what ails you by trying to control what's out of your grasp. But will it be enough to convince you to buy a potentially gas guzzling car?
Like most automakers, Chrysler is suffering the slings and arrows of the outrageous fortune it takes to buy gas. Sales are of its trucks and SUVs are down 18 per cent so far this year and falling fast, as non-stop oil increases and the pinch at the pumps create endless gas pains for economy-conscious drivers.
So while the giant car maker can't control the price of a fill-up, it's decided to do the next best thing - pay for Chrysler owners to fuel their vehicles.
The giant manufacturer has announced a program that will set a cap on the rate owners of some of its less fuel efficient vehicles pay for gasoline.
It would provide a card with each car purchased that will allow participants to pay just $2.99 a gallon in the U.S. no matter what the marquee price is actually showing. Current rates are well over $4 across the border.
Other automakers have come up with similar plans, but Chrysler is the first in history to guarantee it for three years or just over 19,000 kilometres. It's a risky idea as the price of crude continually swells. "This could be a game-changer in terms of how vehicles are sold in the marketplace," maintains Steve Landry, Chrysler's head of North American sales.
The company claims its market research shows consumers don't have a problem with its vehicles, just the cost to run them. So it's trying to take that concern out of the equation. "One of the things that weighs heavily on people's minds is the volatility of fuel prices," agrees vice chair Jim Press.
It's expected the concept would save about US$13,000 a year on trucks and around US$800 for hatchbacks.
But not everyone likes the idea. Environmentalists argue artificially influencing the price will simply get people to spend more on gas instead of conserving or seeking alternates and that Chrysler should concentrate on building more fuel efficient vehicles.
The concept will be in dealers in the U.S. by May despite the objections, but will exclude such gas guzzlers as the Dodge Viper and the Challenger muscle car.
There's no word yet on when or if the incentive will also be available in Canada but if it causes the sagging car company to experience a sales spurt down south, there's a chance that it could not only happen here, but other companies will jump on the bandwagon.
Something has to help the flagging industry. Chrysler lost $1.6 billion in 2007 and overall sales for all the big automakers dropped 14 per cent in April.
The downturn in trucks has especially hit the sector hard. It was one of the main reasons GM announced huge cuts last week, which will see nearly 1,000 jobs disappear from its Oshawa plant.