BonzoHansen
07-26-2007, 11:22 AM
Hot off the presses!
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Chrysler Offers Lifetime Powertrain Warranty
07/26 12:22 pm (ON)
Story 1063 (AN, DCX, F, GM)
By John D. Stoll Of DOW JONES NEWSWIRES
DETROIT -(Dow Jones)- DaimlerChrysler AG's (DCX) Chrysler Group on Thursday launched a lifetime warranty on major "powertrain" vehicle components, such as engines and transmissions, as it seeks to give consumers another reason to visit its showrooms.
Chrysler Sales Chief Steven Landry said during a conference call that the warranty is an "unprecedented" offer in the industry and it promises to "raise the consideration" of Chrysler, Jeep and Dodge vehicles in the marketplace. Landry said the offer could eventually allow Chrysler to lessen its reliance on high-dollar discounts and rebates as a way to lure new buyers.
"We don't want to match everybody, we want to go way beyond that," Landry said, referring to the length of the warranty. Auto makers typically limit the amount of years that a vehicle and specific parts are covered under a warranty plan.
The new offer, which is valid starting Thursday and applies to all new vehicles it sells, is also seen as a way to mend fences with its dealer base after a rocky relationship in recent years. Dealers like a longer warranty because it provides them with an additional selling tool when trying to close a deal with a potential customer, the auto maker said.
Chrysler's announcement comes as several auto makers, including market-leader General Motors Corp. (GM), have recently boosted vehicle-warranties as a way to reinforce their claim to consumers that vehicle quality is on the rise. Landry said Chrysler is offering the warranty on powertrain components, and not the entire vehicle, because those components typically are the most expensive for a buyer to replace.
The warranty is valid only for the original owner. If the car is sold, the warranty reverts to coverage for only three years, or 36,000 miles.
Chrysler is set to be controlled by private-equity giant Cerberus Capital Management as early as next month. DaimlerChrysler decided to sell Chrysler after the unit fell into trouble in the U.S. market. The U.S. auto maker in past years saw its inventory balloon to unmanageable levels, and past marketing campaigns have failed to stop a market-share decline.
Chrysler is often cited by third parties as the biggest spender in the industry when it comes to sales incentives. While often necessary to spark consumer demand, sales incentives are seen as harmful to auto makers because they have a negative impact on financial results and hurt vehicle-resale values.
GM launched a new five-year, 100,000 -mile powertrain warranty last year. The company claims the warranty is the No. 1 reason that people buy a GM pickup truck. In 2003, rebates and incentives had been the top reason for such a purchase, the company says.
Landry said Chrysler went to its dealers in January and asked them to outline major concerns that needed to be addressed. He said dealers referenced inventory levels, marketing investment, and warranty coverage as issues that needed to be resolved.
"I've been a proponent of that for quite some time," AutoNation Inc. (AN) Chief Executive Mike Jackson said of the warranty. Jackson, heading the nation's largest auto-dealership chain, was speaking during a first-quarter conference call. He said the improved warranty "has worked very well for General Motors and I think it will work very well for Chrysler."
Jackson insists Detroit's Big Three "have dramatically improved quality." He said the warranty clears up a "perception gap" in the marketplace that exists because many buyers think Japanese cars and trucks are of higher quality than domestic models.
-By John D. Stoll, Dow Jones Newswires; 313 -226 -1249;
(Mike Spector contributed to this report.)
(END) Dow Jones Newswires
07 -26 -07 1222ET
Copyright (c) 2007 Dow Jones & Company, Inc.
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Chrysler Offers Lifetime Powertrain Warranty
07/26 12:22 pm (ON)
Story 1063 (AN, DCX, F, GM)
By John D. Stoll Of DOW JONES NEWSWIRES
DETROIT -(Dow Jones)- DaimlerChrysler AG's (DCX) Chrysler Group on Thursday launched a lifetime warranty on major "powertrain" vehicle components, such as engines and transmissions, as it seeks to give consumers another reason to visit its showrooms.
Chrysler Sales Chief Steven Landry said during a conference call that the warranty is an "unprecedented" offer in the industry and it promises to "raise the consideration" of Chrysler, Jeep and Dodge vehicles in the marketplace. Landry said the offer could eventually allow Chrysler to lessen its reliance on high-dollar discounts and rebates as a way to lure new buyers.
"We don't want to match everybody, we want to go way beyond that," Landry said, referring to the length of the warranty. Auto makers typically limit the amount of years that a vehicle and specific parts are covered under a warranty plan.
The new offer, which is valid starting Thursday and applies to all new vehicles it sells, is also seen as a way to mend fences with its dealer base after a rocky relationship in recent years. Dealers like a longer warranty because it provides them with an additional selling tool when trying to close a deal with a potential customer, the auto maker said.
Chrysler's announcement comes as several auto makers, including market-leader General Motors Corp. (GM), have recently boosted vehicle-warranties as a way to reinforce their claim to consumers that vehicle quality is on the rise. Landry said Chrysler is offering the warranty on powertrain components, and not the entire vehicle, because those components typically are the most expensive for a buyer to replace.
The warranty is valid only for the original owner. If the car is sold, the warranty reverts to coverage for only three years, or 36,000 miles.
Chrysler is set to be controlled by private-equity giant Cerberus Capital Management as early as next month. DaimlerChrysler decided to sell Chrysler after the unit fell into trouble in the U.S. market. The U.S. auto maker in past years saw its inventory balloon to unmanageable levels, and past marketing campaigns have failed to stop a market-share decline.
Chrysler is often cited by third parties as the biggest spender in the industry when it comes to sales incentives. While often necessary to spark consumer demand, sales incentives are seen as harmful to auto makers because they have a negative impact on financial results and hurt vehicle-resale values.
GM launched a new five-year, 100,000 -mile powertrain warranty last year. The company claims the warranty is the No. 1 reason that people buy a GM pickup truck. In 2003, rebates and incentives had been the top reason for such a purchase, the company says.
Landry said Chrysler went to its dealers in January and asked them to outline major concerns that needed to be addressed. He said dealers referenced inventory levels, marketing investment, and warranty coverage as issues that needed to be resolved.
"I've been a proponent of that for quite some time," AutoNation Inc. (AN) Chief Executive Mike Jackson said of the warranty. Jackson, heading the nation's largest auto-dealership chain, was speaking during a first-quarter conference call. He said the improved warranty "has worked very well for General Motors and I think it will work very well for Chrysler."
Jackson insists Detroit's Big Three "have dramatically improved quality." He said the warranty clears up a "perception gap" in the marketplace that exists because many buyers think Japanese cars and trucks are of higher quality than domestic models.
-By John D. Stoll, Dow Jones Newswires; 313 -226 -1249;
(Mike Spector contributed to this report.)
(END) Dow Jones Newswires
07 -26 -07 1222ET
Copyright (c) 2007 Dow Jones & Company, Inc.