Chrysler Group Drops Prices for '02

The Chrysler Group was discouraging Internet shoppers with out-of-whack sticker prices, sending potential buyers scurrying before they even learned about incentives that might have evened the purchase field.

It is one reason behind aggressive pricing of the '02 model line that comes in, on average, 0.9% below the '01 lineup it replaces. Adjusting for content, it represents a decrease of $199 per vehicle, says George Murphy, Chrysler Group senior vice president-marketing.

The idea is to price products competitively so the 70% of buyers who pre-shop on the Internet will click through to the automaker's Web site and find their way into showrooms.

Chrysler also is devoting in excess of $50 million each to tout the Dodge, Jeep and Chrysler brands in a mega marketing campaign.

Mr. Murphy says corporate cost-saving initiatives are paying some of the tab for these moves, and anticipated volume increases will compensate for lower retail prices. Decontenting is the exception, not the rule, he says of the move to ensure vehicles are properly aligned within their segments.

He points to the success of the EX model of minivans, which made up 20% of minivan sales and were priced to beat the Honda Odyssey and sell without incentives.

The Chrysler Group extends the concept to short wheelbase models: adding a Dodge Caravan EC and Chrysler Voyager EC, and going upscale with a new Chrysler Town & Country EL and Dodge Grand Caravan EL. Production begins in late September for sale in October.

The company considers applying it to vehicles in other segments, says Mr. Murphy, but is concerned that incentives on some vehicles but not others will confuse buyers. He says incentives must continue because many buyers rely on the cash as a down payment on a new vehicle or to get out of a current vehicle.