As news surfaced last week that DaimlerChrysler AG was about to replace its U.S. boss with a German management team, many American retailers were wondering two things:
1. Will the new guy from Stuttgart keep up the flow of new Chrysler, Dodge and Jeep products?
2. Is the cash-incentives pipeline about to dry up?
'The minivan is selling OK,' reports Edward Spencer, owner of Edward Spencer Inc., a single-point Chrysler store in Warren, Mass. 'But what's really keeping it moving right now is incentives. It's a little tougher to sell this new minivan. I hope they're not thinking of cutting off the rebates.'
Stuttgart has been troubled by the incentives game the U.S. subsidiary is playing. Incentives were partially to blame for the subsidiary's $512 million third-quarter operating loss.
Bob McCreary, owner of McCreary GM-Chrysler in Fowler, Ind., says incentives may be undesirable, 'but the market still needs to be fueled by incentives.'
Like other dealers, McCreary notes that his own sales have dipped in recent weeks. The problem is not unique to Chrysler, Dodge or Jeep, he says, but is evidence of a softening economy.
'When inventories go up, I hesitate to stock more - especially this time of year,' he says.
In conversations last week, the key issue for Chrysler-brand retailers was not that a German team was taking over day-to-day management. Rather, they wanted to know what steps the new management might take.
'Hopefully, the plan is still to sell as many cars as we can,' said John Weibel, principal at Valley Chrysler-Dodge-Plymouth in Boulder, Colo. 'As long as they keep developing new products and keep them coming, I'm not too worried about who runs the company.'
Special Correspondent John Stoll contributed to this report