Thursday, July 8, 2004
(reference link: http://www.detnews.com/2004/autosins...a01-206692.htm)
Charles V. Tines / The Detroit News
Nick Davis of Bloomfield Hills is one of a growing number of people to trade for a Chrysler 300. He swapped his Jaguar X-Type for a deluxe 300C with a V8 "Hemi" engine.
New Chrysler 300 fuels trade-ins of import cars
Sedan draws converts to American car
By Brett Clanton / The Detroit News
AUBURN HILLS — Chrysler CEO Dieter Zetsche likes to tell a story about a Chrysler salesman who was nearly fired recently when his boss noticed the dealership’s used car lot was stocked with hard-to-sell BMW, Mercedes-Benz and Cadillac models.
Fortunately for the salesman, he hadn’t purchased the luxury cars at auction. They were taken as trade-ins from buyers of the new Chrysler 300 sedan.
Since hitting the market in April, hordes of U.S. car buyers are trading in everything from Hondas to Jaguars to get behind the wheel of Detroit’s new “it” sedan.
“We haven’t ever seen that before,” Zetsche said Wednesday in a telephone interview. “And this is not one dealer or five dealers telling us that. It’s very much across the country.”
It’s too early to say whether the 300 sedan will bring U.S. buyers back to American passenger cars after they’ve been migrating to Japanese and European models for years. But there is more than just anecdotal evidence that the uniquely styled rear-drive sedan is changing some minds.
That’s good news for Chrysler, which has promised for almost four years that a stable of new products will restore profits.
The automaker, a unit of Germany’s
DaimlerChrysler AG, generates about 70 percent of its sales from minivans, trucks and sport utility vehicles, and is banking on the 300 to gain a stronger position in the passenger car market.
The 300 is appealing to buyers who may not have considered Chrysler before, including foreign car owners and luxury buyers, according to dealer sales data tracked between April 1 and June 13 by J.D. Power and Associates’ Power Information Network.
Among the top 20 models traded for the Chrysler 300 are the Nissan Maxima, Toyota Avalon and Honda Accord — all from Japanese automakers — while the top 10 trade-ins include models from U.S. luxury brands Lincoln and Cadillac. Though not ranked as high, cars by foreign luxury marques BMW, Volvo and Mercedes-Benz are also coming in.
Cadillac and Lincoln owners are nearly six times more likely to make a trade for a 300 than for any other Chrysler model. Nissan owners are almost twice as inclined to swap for a 300.
Nick Davis, 38, of Bloomfield Hills recently traded a 2-year-old Jaguar X-Type sedan for a Chrysler 300C, the top-of-the-line 300 with a V-8 Hemi engine.
“It’s night and day,” Davis said when asked to compare the two cars. “The 300C feels like it rides smoother and offers much more luxury. It’s a totally different vehicle.”
The 300’s sticker price — ranging from $23,000 to $38,000 — is one of its biggest draws, said Eric Ryan, general sales manager of Birmingham Chrysler Jeep. “Nowadays, cars are so expensive that they cost more than some people’s first homes. This car gives you great content with a real reasonable price.”
Value aside, the car’s bold, muscular styling and large chrome-plated grille have a visceral appeal that is making some buyers forget their love of foreign makes.
After owning two Hondas and a Lexus during the last eight years, Greg Jacobs, a 34-year-old paint salesman from Westland, said he was charmed by the regal-looking sedan with the big wheels and low roof line.
“If it wasn’t for the 300, I wouldn’t have gone back to American cars,” Jacobs said. “I would have continued to drive foreign.”
Jacobs said he is enjoying a monthly payment that is $175 less than the payment on the Lexus he traded in for his 300C.
Though Zetsche said the core customer for Chrysler vehicles will continue to be former Chrysler owners, the early trade-in numbers on the 300 tell him the brand is reaching a new audience.
Our dealers “are meeting customers they’ve never seen in a Chrysler dealership before,” Zetsche said.
“This doesn’t mean that 80 percent of our customers will come from (luxury and foreign) brands, but it’s amazing the number of people who are leaving their BMWs, Cadillacs — you name it — to buy a 300.”
Through June, Chrysler had sold more than 36,000 of the new sedans with minimal incentives, about five times the sales of its predecessor — the 300M — during the same period in 2003.
The performance has helped lift Chrysler to a 2.3 percent sales gain this year. It is also fueling optimism that the 300 — one of nine new vehicles from the automaker in 2004 — will help return profits.
The 300 was designed to be a mid-market competitor to such models as the Nissan Maxima or Honda Accord at the low end, and luxury models such as the Acura TL or BMW 545i at the high end.
Consumers taking a serious look at the Chrysler 300 are frequently cross-shopping it against those cars, as well as the Nissan Altima, BMW 3 Series and the new Dodge Magnum wagon, according to Edmunds.com, a Santa Monica, Calif.-based Web site that provides data for prospective car buyers.
Gary Dilts, Chrysler’s senior vice president of sales, said it is hard to pin down exactly who the audience is for the new 300 because it keeps growing and changing.
“We’ve not seen a vehicle with this wide a reach and level of interest, certainly not in my history with the company, and maybe ever,” he said in a conference call this month to announce the automaker’s June sales.
One of the more interesting surprises has been the 300’s appeal to rap artists such as 50 Cent and Snoop Dogg.
New York City’s 50 Cent has helped lead a trend toward bigger wheel rims on the car that has made the 300 a darling of the vehicle accessory industry. And last month, Snoop Dogg left a voice mail message for Zetsche asking for a new 300 and promising, “if you want this car to blow (up in popularity), give it to me.” Last week, Chrysler was finalizing a deal to feature the 300 in a music video by Snoop and his West Coast rap buddies, Mack 10 and Nate Dogg.
“That car is catching every spectrum of the market,” Dilts said. “The hip-hop stuff is interesting. We’ve got a lot of youth market interest in the vehicle, but we have all the way into the senior markets getting the same kind of reaction.”
In a survey last month, the 300 was rated as the new vehicle with the most buzz in the market, beating out 41 other recently launched or about-to-be-released models. The survey, conducted by Kelley Blue Book and Harris Interactive, polled 2,000 people who intend to buy new cars during the next 12 months.
Of those who viewed the Chrysler 300 favorably, 68 percent were male, and more than half were over 45.
Respondents gave the 300 high marks for being “aggressive,” “confident,” “exciting,” and “sophisticated,” said Rick Wainschel, director of marketing research at Kelley Blue Book, who led the study.
“Chrysler has done a great job of getting the word out about this vehicle,” he said.
Now, dealers are just trying to get a 300 to everyone who wants one.
“I get five or six 300s a day, and they’re gone within 48 hours,” said Ryan at Birmingham Chrysler Jeep.
At the end of June, Chrysler reported less than a 30-day supply of the 300, said company spokesman Kevin McCormick. An optimal inventory is 60- to 70-days’ worth, he said.
Even with the high demand, Chrysler is offering a $1,000 discount on the 300 for those applying for loans through DaimlerChrysler Services, the automaker’s finance arm.
Dilts calls the rebate an “insurance policy” to keep sales brisk.
But Zetsche said he was firmly convinced, even before the 300’s launch, that it would be a hit that could help the automaker rebound from crushing losses in recent years.
“We are not at a point where we can say, ‘We are there. Everything is done,’ ” Zetsche said. “But there are very encouraging indications that we are on our way.”
More online
* Read reviews of the Chrysler 300 and other models.
* Chrysler 300 photo gallery.
* CyberSurvey: Would you prefer to buy the Chrysler 300 or one of its rivals?
Go to AutosInsider.com
You can reach Brett Clanton at (313) 222-2612 or bclantondetnews.com
New Chrysler 300 fuels trade-ins of import cars
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