Chrysler Inventory Reaches New Low

It’s official.

The tumultuous year that pushed DaimlerChrysler AG stockholders over the edge and forced the pending deal that will see Chrysler Group returned to its U.S. roots is a faded memory.

Chrysler’s inventory, allowed to balloon past 575,000 vehicles about this time last year, was under 460,000 as of July 31.

“This is the lowest dealer inventory in the last four years,” crows Darryl Jackson, vice president-U.S. sales.

And Chrysler car sales, crippled in 2006 by volatile pump prices and a dearth of products powered by fuel-efficient 4-cyl. powertrain choices, were up 17.6% in July, according to Ward’s data, which is adjusted for the number of selling days. This performance echoes June’s car delivery totals, which rose nearly 50% on the strength of midsize offerings such as the ’07 Chrysler Sebring, ’08 Sebring convertible and ’08 Dodge Avenger.

These vehicles come standard with thrifty 4-cyl. engines, a choice would-be midsize buyers did not have in 2006.

A 9.9% light-truck sales dip in July mitigates Chrysler’s gain on the car side, but the auto maker blames this performance partly on sell-downs of its Jeep Liberty SUV and its market-leading minivans, the Dodge Grand Caravan and Chrysler Town & Country. Chrysler is launching re-engineered versions of each for the ’08 model year.

Production of re-engineered-for-’08 Jeep Liberty began July 23.

Production of the new Liberty began July 23 at Chrysler’s assembly site in Toledo, OH. Minivan production began July 3 in Windsor, ON, Canada.

Overall, Chrysler sales were down 4.6% for July.

Swollen inventories caused strife between Chrysler and its dealer network as the auto maker, having realized its production schedule was too ambitious, allegedly strong-armed retailers to take delivery of vehicles they did not want.

This friction eventually led to the ouster of sales chief Joe Eberhardt.

Chrysler’s July inventory of 355,000 trucks and 109,000 cars “shows that we continue to deliver on our commitment to our dealers to keep our inventory levels well below the previous year,” Jackson tells journalists and analysts during a conference call.

Exacerbating last year’s woes was a glut of unsold vehicles Chrysler stockpiled as part of its “sales bank.” At one point, this stockpile reached the 100,000-unit mark.

Currently, there are about 500 vehicles in this system, a Chrysler spokesman says, adding that number will not be allowed to grow.

Frustration with Chrysler’s operations led to a revolt by German shareholders, which was supported by DC’s board. As a result, a deal was struck that will see Cerberus Capital Management LP acquire a controlling stake in Chrysler this quarter.

Sales of Chrysler’s highest-volume products, Dodge Ram pickups, sunk 6.9% while the Jeep Wrangler continued to be the auto maker’s showroom star for 2007. Sales of the redesigned-for-’07 SUV were up nearly 16% compared with July 2006.

Most of the Wrangler sales were high-margin, 4-door units, Jackson says.

Meanwhile, Chrysler says there are promising signs for its lifetime powertrain warranty. During the first weekend following the programs’ announcement, traffic to the auto maker’s consumer website increased 40%.

In addition, Chrysler announces its 60-month, interest-free financing program will continue through August, on select vehicles. Customers are also eligible to receive up to $1,000 bonus cash.

[email protected]