Chrysler has faith in its new Sebring

November 07, 2006|By The Detroit News

DaimlerChrysler AG's Chrysler Group is so sure its redesigned Chrysler Sebring sedan can hold its own in the tough midsize sedan market that it will give $1,000 in cash to any shopper who trades in a Toyota Camry, Honda Accord, Nissan Altima or Ford Fusion for a 2007 Sebring.

The offer is available through Nov. 30 to customers who are leasing the rival sedans, according to several Chrysler dealers.

Chrysler is counting on the made-over Sebring to attract new buyers as the automaker tries to bolster sales and restore profits.

But the sedan is rolling into a midsize segment that has been dominated by foreign models - the Camry is the best-selling car in America - and also faces competition from the Fusion, which has been a hit for Ford Motor Co.

Separately, Chrysler extended five-year, zero-percent financing offers until the end of the month for 2006 models and is adding up to $1,000 to existing rebates on most 2006 vehicles.

Chrysler is trying to shrink its stockpile of unsold cars and trucks after sluggish summer sales resulted in big inventories that are hurting profits. The automaker lost $1.5 billion in the third quarter.

Chrysler also is offering rebates of up to $4,000 on certain 2007 models, including the Chrysler 300C sedan, Dodge Magnum wagon, Charger sedan, minivans and the Dodge Ram pickup.

"We're moving into the end of the year's selling season and what we like to do is really close out the year strong," said Chrysler spokesman Kevin McCormick.

McCormick declined to confirm details of the Sebring promotion. Analysts say an incentive program that targets specific competing models is not unprecedented, but it is rare. And they're not sure it will work.

"It's really difficult to get people from their Camrys or Accords back to the Big Three, because there's a reason why they shifted into those vehicles in the first place," said Erich Merkel, an automotive analyst with Grand Rapids, Mich.-based IRN Inc.

It may be easier for Chrysler to grab buyers from Ford's Fusion than the Camry and Accord - which are perennial top sellers, said Jesse Toprak, an analyst with Edmunds.com, a research Web site for car buyers.

"In other words, it'll be easier to get people from the Ford Fusion than the Camry because of brand loyalty and brand perception," Toprak said.

Not so fast, says Ford spokesman Jim Cain.

"All I can say is, good luck, because they're going to need it," Cain said. "Fusion customers are very satisfied with their product in terms of performance and quality. And then there are improvements on the 2007 Fusion, like all-wheel-drive, that they can't get on a Sebring. They remain a step behind."

Last week at a Sebring marketing event, Chrysler executives said the car, which boasts a contemporary design and such high-tech features as cup-holders that heat and cool beverages, can compete in the intense segment against major players in the sedan market.

The Sebring, which arrived on the market in 1995, hit an all-time sales high of 118,459 units in 2001 for the convertible, coupe and sedan versions combined. By 2005, sales had dropped 24 percent to about 90,000 units.

Brian Ackerman, sales manager at Mike Riehl's Roseville, Mich., Chrysler Jeep, said he thinks the cash offer could attract some lease owners away from the competition.

"We usually don't see that type of competitive rebate," he said.

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