Chrysler Prices Drop, Along with Consumer Satisfaction

Chrysler, Auburn Hills

With demand slowing, the economic outlook grim and the worst customer satisfaction score ever, Chrysler cut some prices on key 2012 models. Among the cars affected (and the reductions) are: the Dodge Journey ($1,200), the Chrysler 200 ($250) and the Jeep Grand Cherokee ($3,220).

The company also announced a new “no payment for 90 days” offer and a bunch of rebates and cash incentives on their cars.

The biggest bomb thrown at the company has to be the American Consumer Satisfaction Index, which put Chrysler, along with Mazda, at the bottom for the industry.

The worst scores in the industry go to Chrysler, despite small-to-modest gains for its Dodge (+1%) and Jeep (+3%) product lines. At 79 [ranking], both nameplates tie Mazda (-1%)—the weakest Japanese offering—while the Chrysler brand itself suffers a second consecutive 5% slump to 76.

Dodge JourneySo, if you’re in Sergio Marchionne’s shoes, what do you do? There must have been plenty of strategizing and angst going on in Auburn Hills the last month. What I would do (no, they didn’t ask me) is junk some of the company’s recent products—like the Chrysler 200 and maybe the Journey (right). Concentrate on FIAT, as they are doing, and rush the process of bringing in other FIATs and Alfas. Stop trying to compete with GM and Ford.

What is Chrysler doing? It’s hiring a new social media agency. Its competitors are raising their prices, because of increasing costs, as Chrysler pushes itself downmarket. Yet they must know that you can’t be a Hyundai unless you offer unique, well-designed and well-engineered products that break some new ground.

In an ever-tighter market, all you can do now is go back to the wretched world of incentives and compete on price. But it will take a long time for Chrysler to climb back up the satisfaction chart.

It’s really the same problem Sergio faced after the bailout: What do you do with a line of failing products until you can replenish it with (hopefully) more buyer-centric stuff? The FIAT 500 won’t carry the company; nor will the nicely revised Grand Cherokee.

So you cut prices and hope.

Would the recent price cuts and incentives be an inducement for you to consider buying a Dodge Journey, Chrysler 200 or Jeep Grand Cherokee?


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