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Chrysler Beefs Up Incentives

February 13, 2001

DaimlerChrysler AG's Chrysler unit rolled out beefed-up vehicle incentives Feb. 12, hoping to push sales as it engages in a vast turnaround effort to stanch its losses.

Chrysler's latest incentives, effective through April 3, include extending financing as low as 0.9 percent, increasing some rebates to as much as $2,000, or offering combinations of both. The incentives now also include 2001 Chrysler Sebring and Dodge Stratus sedans and coupes, which were redesigned for this model year.

The U.S. arm of Germany's DaimlerChrysler posted a third-quarter loss of $512 million and has issued warnings that its fourth-quarter red ink could be more than twice that when it reports earnings Feb. 26.

Chrysler Group on Jan. 29 said it plans to cut 26,000 jobs, 20 percent of its workforce, during the next three years, as well as idle six plants in the next two years and scale back operations at plants in four states and Canada.

Dieter Zetsche, who was installed in November as Chrysler's president and CEO, has said such drastic belt-tightening is painful but needed to help return the unit to profitability in the face of "brutal" competition, advances by imports and soft U.S. sales.

"Now that our turnaround has started, we want to concentrate on selling SUVs, cars and trucks," Zetsche said Feb. 12 in a statement. "We have repeatedly said that product will move this company forward, and our award-winning vehicles are the basis for our confidence in the successful future of the company."

Last month, DaimlerChrysler Chairman Juergen Schrempp said Chrysler's turnaround would emphasize adjusting Chrysler's cost structure and developing "a market that is not pushed by costly incentives but one that is pulled by great products."

Chrysler said last week its January sales dropped 16 percent, including a 22-percent slump in its car sales and a 14-percent decline in truck demand.

With enhanced incentives, Chrysler is attempting to bring excitement to its showrooms while keeping pace with competing incentives, according to company officials.

Chrysler's latest incentives include:

2001 Jeep Grand Cherokees and Cherokees and Dodge Durangos available with $2,000 rebates, up $500 from rebates announced Jan. 30, or 0.9-percent financing for 36 months, a year longer than previously offered. Also available is a combination of $1,000 cash back and 0.9-percent financing for 36 months.

2001 Dodge and Chrysler minivans available with $1,500 cash back or 0.9-percent financing for 36 months, or a combination of $1,000 rebate and 2.9-percent financing.

2001 Dodge Ram 1500 pickup trucks available with $2,000 rebates or 0.9-percent financing for 36 months, down from 4.9-percent financing for 25 to 36 months. The Rams also are available with $1,000 cash back and 0.9-percent financing for 36 months.

2001 Dodge Dakota pickup trucks are available with $2,000 rebates or a 0.9-percent financing for 24 months, or $1,000 cash back and 0.9-percent financing for 24 months.

2001 Sebrings and Stratus cars are available with $1,000 consumer cash or 0.9-percent financing for 36 months.

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