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Chrysler Predicts Imminent Midsize Sedan Incentive War

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On: Mon, Jul 13, 2015 at 4:52PM | By: Carl Malek


Chrysler Predicts Imminent Midsize Sedan Incentive War

With sales currently shrinking in the mid-size car segment (which includes the Chrysler 200, Toyota Camry, and Honda Accord), many manufacturers are engaging in a bitter incentive sales war that has the potential to erode long term profits for the segment, according to a statement released by Chrysler representatives to the folks at Automotive News.

The catalyst of this war is the sharp decline in first-year mid-size car sales, with the segment seeing a 3.4 percent slide in sales when compared to the same period last year—mid-size crossover sales rose 3.6 percent and mid-size SUV sales experienced a 23 percent gain. Chrysler Brand Chief Al Gardner revealed that competitive pressures in the segment have intensified in recent months and, as a result, "none of us are going to make all of the money that we would like to make." For its part, Chrysler's entry, the recently launched 200 sedan, has seen its sales nearly double in the first half of the year, however, this is in comparison is against the previous model's initial sell down period that took place during the first half of 2014.

Gardner elaborated, "When the segment's down, everyone's fighting for share, and we're watching the competition jack up the incentives all over the place. I have no plans on losing money on the Chrysler 200 anytime soon; unfortunately, when you've got a brand new car like the Hyundai Sonata, which is a great car, but they are already pricing it immediately with low APR and cash on the hood, it drives the entire rest of the segment to do the same thing." According to edmunds.com, a base 2015 Hyundai Sonata currently boasts a sticker price of $21,975 with the company offering $1,750 in incentives. A similarly equipped Chrysler 200 has a slightly higher base price of $22,990 and carries $2,500 in incentives. Both of these prices do include shipping fees.

Gardner also revealed that he is confident in the 200's potential for sales growth, revealing that despite its rising sales figures, it still has room to grow and that he also expects volume to grow even further as well. "It's got everything going for it. If we get more people to know how good this car is and actually walk into our showrooms or walk onto our websites and figure this thing out, we win this game." It will be interesting to see how the segment fares, especially with the recent unveiling of the 2016 Chevrolet Malibu as well as Ford's plans to significantly update its popular Ford Fusion sedan for 2016.




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