Chrysler Joins Industry’s Discount War

Chrysler Corp. joined the auto industry’s owner-loyalty coupon war Friday, offering new-vehicle discounts of $500 or $1,000 to current owners and pledging to honor similar coupons from General Motors Corp. and Ford Motor Co.

The move escalates a fierce battle for market share that has increased incentives significantly over the last couple of months to levels not seen since the last recession.

“In light of what has happened this past week with competitive programs, we felt we had no choice but to offer our own customers a similar reward--and perhaps gain a few new customers in the process,” said James Holden, Chrysler’s executive vice president for sales and marketing.

GM started the loyalty coupon war about two weeks ago, when it mailed coupons worth $500 or $1,000 off the purchase of a new vehicle to tens of millions of owners. This week Ford said it would match the program and accept coupons from GM owners.

The offers come on top of incentives that are rapidly nearing $1,500 a vehicle. In the first quarter, GM spent $1,300 per vehicle on incentives and Chrysler spent $1,200.

Chrysler spokesman Jeff Leestma said the auto maker’s April sales “look pretty good,” and it would not have offered the discounts had it not been for GM’s and Ford’s actions.

The program offers $500 rebates on the all-new 1998 Chrysler Concorde and Dodge Intrepid sedans, marking the first cash incentives on those cars. The loyalty offer does not extend to the Chrysler 300M or LHS luxury sedans, which have just entered production, nor to the hot-selling Dodge Durango sport-utility vehicle.

Chrysler said eligible retail consumers--current owners of a Chrysler vehicle who purchased the vehicle new and continue to own the vehicle--who purchase or lease a new Dodge, Chrysler, Plymouth, Jeep or Eagle vehicle and take delivery between April 24 and July 2 will receive the coupon.

The owner’s bonus allowance is in addition to current national and regional consumer cash incentives and national and regional lease programs, Chrysler said.

Ford’s and GM’s offers extend to owners who have bought or leased cars or trucks since 1986.

Ford is also taking direct aim at GM by saying it will honor the Loyalty First certificates GM has sent to its customers if they want to purchase or lease a new Ford vehicle.

GM spokeswoman Donna Fontana said the auto maker has not decided whether to honor coupons from Chrysler and Ford, saying the company is still using restraint in its incentive spending.