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by Brett Davis

Remember the days when car manufacturers used to offer all kinds of package deals; $1000 cash back; free petrol for a year; interest free finance periods? In America, the car industry took a big hit from the global financial crisis and such package incentives had to be reduced dramatically. Now it seems Chrysler has emerged from the GFC wreckage and are now offering US customers $3000-$4000 worth of incentives.

The company is offering to pay off the first two months finance on the car. They’re also giving consumers the option of making a regret-free purchase, where they buy the car, drive it for up to 60 days, and if they’re not happy with it, return it. Chrysler is also said to offer $3000-$4000 cash back up front, which would be the same as the company paying off the first two months of the car. Punters say these new incentives may set off a series competitive deals that all manufacturers could offer.

In a recent press release published by Edmunds.com, they revealed the cost of incentives like this to the manufacturers, and, more importantly, they showed how much less manufacturers are willing to provide these days compared to this time last year. Apparently, the average cost of package deals to US car makers was $2857 for every car sold (June 2009). Now, as an average figure for all US makers, they’re only prepared to input $2661. That doesn’t sound like much, but that’s an average across the board, including all US manufacturers.

If we take a look at Chrysler as a separate entity, the records published by Edmunds.com showed the company was prepared to throw in an average $4897 worth of incentives during June 2009. Now they are only prepared to offer an average $3259 worth of incentives.

Edmunds.com speculate the new pay-the-first-two-months deal could in fact trigger the return of such incentives across the board, where competing manufacturers jump on the competition bandwagon and offer deals of their own. Jeremy Anwyl, CEO of Edmunds.com, said in a recent Financial Post report,

“Consumers have been waiting for automakers to trigger the start of the summer sell-down season, but the wounded auto industry has been trying to avoid boosting incentives in order to preserve profitability and brand equity. It will be interesting to see if Chrysler reverses the anti-incentives trend that has caused such a drag on sales at a time when every shopper seems to be holding out for a better deal.”

The repercussions of the GFC resonated through the American car industry some time after the GFC began in 2007, with plant closures and complete company bankruptcies. It’s great to see signs of recovery from the US companies as it is likely to have a positive affect on our shores, eventually.




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