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Published: Tuesday, 9/9/2008

Incentives sweetened on Toledo-made Nitro

BY LARRY P. VELLEQUETTE
BLADE BUSINESS WRITER
These vehicles at Grogan's Towne in Toledo are part of the nationwide inventory of 12,408 unsold Dodge Nitros. These vehicles at Grogan's Towne in Toledo are part of the nationwide inventory of 12,408 unsold Dodge Nitros.
THE BLADE/HERRAL LONG Enlarge | Buy This Photo

Across North America right now are tens of thousands of Toledo-made vehicles that, like puppies in a shelter, are desperate for a new owner.

But a key difference is that shelters don't usually give you thousands of dollars to take a puppy home.

Chrysler LLC yesterday rolled out new incentive programs to try to dent the immense inventories of 2008 Jeep Libertys and Dodge Nitros parked on dealer lots or awaiting transport to their showrooms.

The incentives include rebates ranging from $3,250 to $4,500 in cash back, expanded employee pricing programs, and a coupon for an extra $1,000 to $2,500 cash toward the purchase of another Chrysler vehicle two to four years from now, local dealers said.

The new incentives come after the automaker revealed last week that it probably will phase out either the Liberty or, more likely, the Nitro by the 2012 model year.

The incentives were greeted warmly by local dealers as a sign that Chrysler understands what's happening in the sport utility vehicle market, especially after the company quit leasing cars and SUVs on Aug. 1.

"They're responding to all these bumps in the road, and they're coming out with all these programs to deal with [the current situation]," said Ralph Mahalak, Jr., owner of the Monroe Dodge Superstore. "Our supply of trucks and SUVs in general is just too much right now."

Last week, Steven Landry, Chrysler's vice president of North American sales, told industry analysts that Chrysler had a more than six-month supply of unsold Dodge Nitros and an almost five-month supply of unsold Libertys.

Meanwhile, workers at Toledo Jeep Assembly continue to build 2009-model Libertys and Nitros after recently returning to their jobs from a two-month layoff.

Dan Henneman, Jeep unit chairman for United Auto Workers Local 12, said the slow sales of Nitro, and to a lesser extent, the Liberty, have members worried further layoffs are coming.

"Of course we're worried about [losing the second shift]," Mr. Henneman said. "They're not selling cars. How long can they continue to do what they're doing?"

Mr. Henneman questioned the accuracy of the field inventory - the number of unsold vehicles on dealer lots or in staging areas awaiting transport - of Nitro and Liberty released last week by Mr. Landry.

Mr. Landry said Chrysler had 12,408 unsold 2008 Nitros on hand and 20,943 Libertys. Mr. Henneman said those numbers - which equal a 194-day supply of Nitros and a 145-day supply of Libertys - might be low. Automakers typically like a 60-to-80-day inventory.

"I don't buy the field inventory," Mr. Henneman said. "I didn't build a Jeep or Nitro for five weeks straight, and the numbers didn't change."

Mr. Landry indicated that Nitro fleet sales to rental car companies and others are "down 97 percent year over year," which he said accounted for much of the sales decline.

A Chrysler spokesman said yesterday that the new incentives and large backlogs of vehicles were understandable given current conditions and would work themselves out over time.

"You work the incentives until you find the magic number that appeals [to consumers]," Chrysler spokesman Stuart Schorr said. "Over time, all cars get sold. As model years come and change, it's common to increase incentives until those [models] are sold."

Contact Larry P. Vellequette at:

lvellequette@theblade.com

or 419-724-6091.



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