Chrysler Matches GM Rebates

DETROIT Reuters reported that a Chrysler executive said on Thursday that continued soft sales this month had forced the automaker to match increased rebates from General Motors Corp. , including offering the first cash rebate on Chrysler's popular Jeep Liberty sport utility vehicle.

The unit of DaimlerChrysler AG also raised rebates on several other models.

GM boosted rebates on many of its cars, pickups and sport utility vehicles earlier this month after industry sales fell 6 percent in May to their slowest pace in 3-1/2 years. While many industry executives and analysts called the results a temporary blip, some said another weak month could raise doubts about the strength of the industry and the U.S. economy.

When GM announced its increased incentives, Ford Motor Co. said it would maintain its current offers through July without changes.

Jim Schroer, Chrysler's executive vice president of global sales and marketing, said the company added $500 to existing rebates of up to $2,500 on many of its pickups and SUVs.

The rebates include $500 off the Jeep Liberty, the first national rebate the company has offered for the popular SUV since it went on sale last year. They also apply to several car models, said Chrysler spokesman Marc Henretta.

The new cash offers are good for the final two weeks of June and are in response to GM's moves, Schroer said.

The market "has continued to run soft in the beginning of June, except for the fact that GM dropped its big incentive bombs," Schroer told Reuters. "We are going to stay competitive and hold our own. We're propping up a fairly soft market with extremely strong incentives."

Schroer said May's results were due to a variety of factors, including weakening consumer confidence and a falling stock market. Analyst Stephen Girsky of Morgan Stanley cited signs that demand was weakening as one reason for lowering his rating on the auto industry, which accounts for roughly one-fifth of U.S. retail sales.

Much of the incentive wars has been fought over trucks, which are key to profits for Detroit's Big Three. But GM's full-size pickup sales slumped 23 percent in May, while sales of Ford's F-Series pickups fell 1.3 percent and sales of Chrysler's Dodge Ram pickups increased 19 percent.

GM's truck rebates range from $1,000 to $2,500 after the June increases, similar to Ford's, while Chrysler had offered smaller rebates combined with an extended warranty on its engines and transmissions.

The price cutting has even reached all-new vehicles, such as GM's new 7-passenger SUVs, which were once expected to sell for at least a few months without rebates, cheap loans and other customer lures.