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CHRYSLER SEES U.S. MARKET SHARE GAINS BY YEAR-END
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| By Kevin Krolicki
53 minutes ago
DETROIT (Reuters) - Chrysler Group should end 2006 with a
higher market share than it held during the earlier months of
what has been a "difficult" year marked by declining sales and
market share, a senior executive said on Wednesday.
Joe Eberhardt, Chrysler executive vice president of global
sales, marketing and service, said that the automaker, the U.S.
unit of Germany's DaimlerChrysler AG (DCXGn.DE)(NYSE:DCX - news), would
gain market share by the fourth-quarter of this year.
"I say that very confidently," Eberhardt told reporters at
an event focused on two of the company's new vehicles, the 2007
Sebring sedan and the 2007 Chrysler Aspen.
Chrysler Group, which is banking on the success of new
vehicle launches to lift sales in the closing months of 2006,
held just 10 percent of the U.S. market in July and was outsold
for the first time ever by Japan's Honda Motor Co. (7267.T).
The company has said it will slow production in the third
and fourth-quarters as it works to run down a costly inventory
of unsold vehicles, mostly trucks.
Chrysler -- like the other members of the traditional U.S.
Big Three automakers, Ford Motor Co. (NYSE:F - news) and General Motors
Corp. (NYSE:GM - news) -- has been hurt by a product line that relies
heavily on pickups and sport utility vehicles, which have lost
popularity with American buyers seeking better fuel efficiency
as gasoline prices have risen.
Chrysler dealers held 560,200 unsold vehicles at the end of
July. That marked the highest inventory level in five years for
the month, as a revived employee pricing sales incentive
program failed to catch on with car buyers.
Eberhardt said Chrysler would continue to work with its
dealers to run down inventories, which have become a major drag
on dealer profitability because of higher interest rates.
But he declined to comment on reports that Chrysler would
end its employee discount offer in September and offer
zero-percent financing instead.
"We'll do something," Eberhardt said of the company's
marketing plans.
Eberhardt said Chrysler's longer-term plan is to offer
lower sticker prices that more closely correspond to actual
retail sales prices.
Chrysler has still had to resort to costly incentives of
$5,000 or more on slow-selling SUVs, such as the Durango, which
is built on the same platform as the upcoming Chrysler Aspen.
Even so, overall incentive spending by Chrysler has been
unchanged from 2005 levels, in part since some newer models
such as the Dodge Caliber hatchback are selling without any
incentives, Eberhardt said.
"From our internal perspective, our spending has been flat
year-on-year," he said.
Chrysler on Wednesday announced pricing for the Sebring, a
mid-size sedan that will compete against Toyota Motor Corp.'s
(7203.T) Camry, the best-selling car in the U.S. market.
The Sebring will be priced from $18,995, with the Touring
version, which is expected to make up the bulk of the model's
sales, priced from $20,195.
In a departure from industry practice, Chrysler will offer
a more fuel-efficient 2.4-liter engine in all versions of the
Sebring in a nod to consumer concern over higher gasoline
prices.
In the past, higher-priced versions of Chrysler vehicles
had come equipped solely with more powerful, but less
fuel-efficient, engines such as the 3.5-liter available on the
Sebring Limited, the costliest version of the new sedan.
Chrysler declined to provide sales forecasts for the
Sebring.
But Eberhardt said the automaker was counting on relatively
limited sales of the Aspen, the first SUV for the Chrysler
brand.
That model was meant to fill in a gap in the Chrysler
line-up and keep customers from leaving the brand. In recent
years, a quarter of customers who traded in a Chrysler for
another brand did so to buy an SUV, company officials said.
The Aspen, which will be priced from $31,490, will be
marketed as a more-affordable alternative to luxury-priced
rivals, including the Cadillac Escalade.
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