Originally created 07/01/06

DaimlerChrysler to offers new discounts



DETROIT - Wrestling with declining sales, DaimlerChrysler AG's Chrysler Group is offering employee discounts to everyone on most 2006 models, beginning Saturday and lasting through July.

The level of the discounts was not immediately made clear.

When General Motors Corp. offered employee pricing last summer, Ford Motor Co. and Chrysler matched the deal. This time, however, GM and Ford said they would not match Chrysler, instead sticking to strategies of trying to keep sales prices as close to the stickers as possible.

GM already has zero percent financing for up to six years on many cars. Ford is offering interest-free deals for five years on many models and six for the Expedition large sport utility vehicle.

In addition to employee pricing, Chrysler's incentives give buyers the choice of zero percent financing for 36 months or rebates that vary by model.

Analysts cautioned car buyers against quickly signing up for the new deals, saying they may appear better than they are.

"I think the deals are a bit exaggerated," said Jesse Toprak, executive director of industry analysis for Edmunds.com. "For a majority of the vehicles, you would have done better as a consumer with the regular negotiation of the car and taken the traditional rebates."

The new incentives come as the domestic Big Three automakers' inventories are rising, especially in SUVs and trucks. Analysts say inventories are much smaller for Japanese rivals Honda Motor Co. and Toyota Motor Corp.

Analysts predict that DaimlerChrysler's June sales will drop 6 to 9 percent, while Ford sales will be flat to more than 5 percent off. GM will see sales drop anywhere from 30 to 36 percent, according to analysts. Sales figures are to be announced next week.

Because of these inventory conditions, Morgan Stanley & Co. analyst Jonathan Steinmetz has predicted that automakers would show less sticker price discipline.

On the Net:

www.daimlerchrysler.com