Chrysler finally wised up a few months ago and discontinued this practice, after having at one time or another over 100,000 unsold, unordered new vehicles in the "sales bank." Chrysler watchers (or Iacocca autobiography readers) may recall that this very thing - the sales bank - nearly bankrupted the company in the late 70s/early 80s. This time, all it did was cause a multi-billion dollar loss, the head sales & marketing guy (Joe Eberhardt) to lose his job, and lead to much of the pressure that lead Daimler to unload the Chrysler part of its name.
Meanwhile, most of the damage was done. The sales bank vehicles were already built, and there were billions of dollars in finished goods inventory that nobody wanted, sitting in the Detroit weather, with birds crapping on them and the sun, rain, wind, and snow depreciating them. Last I heard, most of them had been accepted by dealers. But at this point, with many 2008 models hitting dealers, who wants to buy a "new" 2006 that was built almost two years ago, when 2007s are becoming heavily discounted?
Chrysler's solution to this was to basically allow dealers to buy the leftovers themselves. You see, dealers who held 2006s and used them as loaners or test drivers for as little as one day could be considered used cars, transferred to the used car lot, and counted as a new car sale. So, aside from helping to clear out excess [old] new car inventory, this policy change also bumped up Chrysler's May 2007 sales results. Previously, the rule was that a vehicle had to be a loaner for 90 days before it could be considered a used car. What's not clear is who is eating the loss in value - Chrysler or the dealers - when a vehicle priced at $30,000 suddenly becomes a $22,000 vehicle overnight. But if you're in the market for a new Chrysler vehicle, particularly one where there might be new 2006 models still out there, it might be a good time to go shopping. According to the company, there were 9,800 2006 Chrysler Group vehicles in dealer inventory as of May 31, 2007.
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I haven't been around it for about a month, but they were stockpiling new Magnums, Chargers and 300s in Downsview Park in Toronto for a long time.
The hilarious part is that my boss decided on a Chrysler 300 for her fleet vehicle, and they MADE ONE TO ORDER for her, even though it was a mid level 300 with no options.
Amazing.
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