Chrysler Seeks to Move Gas Guzzlers with Free Fuel Promo

Discussion
May 08, 2008

By George Anderson

Chrysler has a lot of cars to move off dealer lots and unfortunately many are not the fuel-efficient models that are currently so much in demand. To help make it easier for consumers to choose power and speed over longer periods between fill-ups, the automaker is rolling out a new promotion that guarantees owners of select models will pay no more than $2.99 a gallon over the next three years.

The average price for a gallon of regular unleaded self-serve gasoline jumped more than 15 cents to $3.62 over the past two weeks, according to the most recent Lundberg Survey of roughly 7,000 gas stations across the country.

The Chrysler promotion, “Let’s refuel America,” gives qualified buyers of new Chrysler models (Sebring, 300 and Town and Country), Dodge cars (Avenger, Caliber and Charger), and Jeep vehicles (Commander, Compass and Liberty) a PIN-activated card that will enable them to buy fuel at participating gas stations for the $2.99 price. The offer is valid on 87 octane unleaded, E85 and diesel fuel.

According to Chrysler, 76 percent of consumers it surveyed cited rising gas prices as a “top concern.”

Jim Press, vice-chairman and president, Chrysler LLC, said in a statement on Monday that “Let’s refuel America” was intended “to help put customers’ minds at ease and do something to help working people who are worried about the volatility of fuel prices and vehicle cost of ownership.”

Deborah Meyer, Chrysler’s vice president and chief marketing officer, told Brandweek that the auto manufacturer made a “wide media buy” to get the word out on the promotion, which runs through June 2.

Erich Merkle of the consulting firm IRN Inc. said other automotive brands would be watching to see how well Chrysler’s new promotion fares.

“Everyone has to start thinking of pretty creative ways to market vehicles when gas prices get this high,” Mr. Merkle said. “This is a fairly radical plan and helps eliminate one of the reservations people are having when they think about buying a new car.”

Discussion Questions: Will Chrysler succeed in its goal to refuel America? Do you expect to see more brands and retailers, both inside and out of the auto industry, engaged in fuel promotions in the coming months and years?

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16 Comments on "Chrysler Seeks to Move Gas Guzzlers with Free Fuel Promo"


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Mark Lilien
Guest
14 years 17 days ago

What’s really funny about the Chrysler $2.99 gas scam? It’s not for the some of the worst Chrysler guzzlers. Like all auto scams, there’s lots of small print. How about a national contest, open to all auto dealers and manufacturers: best promotion with no small print or asterisks or exceptions or footnotes? Not much competition for that challenge. Here’s a promotion guaranteed to sell more Chryslers than the $2.99 gas hokum: just adopt the Saturn price policy. No haggling. The best price stated first. Saturn customers like their dealers. Chrysler customers can’t stand them.

Jeff Weitzman
Guest
Jeff Weitzman
14 years 17 days ago

I’m with the others that believe there will be a “hey, wait a minute….” moment for consumers on this one. I also agree that Chrysler is risking a backlash. More than that, it is giving its competitors with better gas mileage an opening. Without actually running the math, I’m guessing that the hybrid Chevy Tahoe could easily show how its better gas mileage will save you far more money and reduce our dependence on oil vs. a comparable Chrysler model.

Still, it may create a short-term bump in sales, and they may just need to move some inventory.

Mike Romano
Guest
Mike Romano
14 years 17 days ago

The disconcerting fact for me coming out of this promotion is that obviously, all the internal intelligence at Chrysler feels gas will never again drop below $3 gallon. This reality shock is deflating as I believe we all thought in the back of our minds that this gas crisis mirrored similar historical gas crises, was just a cyclical event, and that eventually gas would come back to it normal level of $2 to $3 gallon. I guess normal isn’t so normal anymore.

Ed Dennis
Guest
Ed Dennis
14 years 17 days ago

This is pretty standard procedure for Chrysler. They have always been the weakest manufacturer and have jumped at promotions quicker than anyone else. They have to move inventory. If any of the auto manufacturers had any sense they would simply emulate Europe and move to diesel. A turbocharged 4 cylinder engine would provide the pep and mileage that America needs. It would also help if Congress would roll back the tax up charges placed on diesel by the Clinton Administration.

There are relatively quick ways out of our problem if someone would just think. Want to increase gas mileage by 20%? Then move to a 60% diesel fleet. To my knowledge, the only diesel powered cars available in the USA are Mercedes and Volkswagens. Does that tell you anything?

M. Jericho Banks PhD
Guest
M. Jericho Banks PhD
14 years 17 days ago

Let’s take a deep marketing breath. Contrary to what some have opined, Chrysler’s promotion is a tactic, not a strategy. In fact, it’s a tactic that does not even seem to be connected to a strategy unless it’s the first shot to be fired in an all-new strategic marketing direction. If that’s so, that it’s the introductory, attention-getting blast for a new communication strategy, it may work just fine. Let’s see what’s next from Chrysler, and whether it’s connected to this tactic.

Al McClain
Guest
Al McClain
14 years 17 days ago

This seems to me to be a short-term tactic that flies in the face of a long-term strategy, assuming that there is one. It feels more like a close-out sale than a promotion. Too bad that they couldn’t see the tidal wave of environmentalism, sustainability, and greener products coming. This wave is only accelerating as it gets closer to shore.

Len Lewis
Guest
Len Lewis
14 years 17 days ago

Brilliant move for Chrysler. It’s a million bucks of publicity that will only cost them about $700 for every car they sell.

Mel Kleiman
Guest
14 years 17 days ago

Looks like a great idea on the surface but this is one that I think is going to backfire for a couple of reasons.
1. People are going to be concerned with the resale market.
2. It is looking to become unpatriotic to drive a gas guzzler.
3. It looks like the exposure is only $700 per car but what is it really?
4. If it is only $700 per car, why would someone else say I will give you a rebate of $1000? You get it up front and use it any way you want to.

Ben Ball
Guest
14 years 17 days ago

This hits at the heart of consumer concern, and lots of consumers value perceived certainty in their lives. The real dollar impact of fuel costs as a percent of total ownership over the life of a vehicle is much lower than the psychological impact of the $75 fill up. But hey, every good marketer knows that for some segment of the population, perception is reality.

And then there is the “smug factor.” Can you imagine standing at the pump next to the person paying $3.91 (that would be me just last evening) and saying “what ya payin’ bud?” Priceless.

John Hyman
Guest
14 years 17 days ago

I agree with the other panelists. Sounds good on the surface but when you dive a little deeper you realize the actual benefit is less than other existing promotions. And those you don’t have to wait for.

And if gasoline magically drops in price, what would that do to the effectiveness of this approach? How would you feel as a consumer realizing you are now getting less of a financial gain than you expected? And for a Chrysler?

David Livingston
Guest
14 years 17 days ago

It’s discussions like this that make the RetailWire.com such a valuable tool. Our contributors are able to point out how this is just a gimmick with minimal value to the consumer. I have to agree with many of the above that cash in hand today is better than getting it pennies at a time at the pump. Then when it’s time to sell that SUV you might have to pay someone to take it off your hands.

I think I would rather pay $4 a gallon for a 35 mpg car than pay $2.99 a gallon for a 15 mpg tank.

Jill Turner
Guest
Jill Turner
14 years 17 days ago

This is a brilliant strategy from Chrysler. I’m afraid most of us were asleep at the wheel during math class, so when we see “buy 2 get 1 free” we think “WOW, what a great deal!” rather than “hmmm, that’s 33% off.”

The average consumer isn’t doing the math on a long-term basis–they just want to get what they want now. If the “monthly terms” come in right for the big car and they get to have discounted gas too, so much the better.

I think this campaign is just the tipping point folks will need to go ahead and give themselves the green light to buy the bigger car. While we may someday get to the point where the “bigger car” is politically incorrect, I don’t expect it to come any time soon.

Carlos Arámbula
Guest
14 years 17 days ago

It’s a different idea but not a good idea.

Consumers are heading into a green-conscious environment. The issue is not just the price of gas but rather the high consumption of gas. Will Chrysler also offer the car owners a “conscience-appeasing” device?

What happens after three years? What will be the resale value of a gas guzzler be? What will be the overall impact to the brand when the used-car market is flooded with Chryslers in three years?

It’s a bad solution to poor strategic planning.

Max Goldberg
Guest
14 years 17 days ago

I’m surprised that we have not seen more gas promotions lately. With the price of gasoline being top of mind with consumers, why haven’t more retailers targeted this area?

I salute Chrysler for undertaking this promotion. It does negate a top consumer concern and provides a significant point of differentiation with its competitors.

According to Chrysler, approximately 97% of the gas stations in America will participate in the promotion. There also is some fine print that limits the amount of gas each consumer can buy (depending on the vehicle model purchased). If these items do not inconvenience consumers, Chrysler should see a nice increase in sales. And with a short promotion period, Chrysler will always have the option of extending the promotion, should it catch on with consumers.

Susan Cole
Guest
Susan Cole
14 years 14 days ago

This promotion assumes that consumers are unintelligent and able to be lulled into a false sense of economic security by subsidizing their fuel bills. What they should be doing is promoting smaller more fuel efficient vehicles and encouraging the market to be part of the universe and taking global warming and rising sea levels seriously.

Chrysler management should go watch Al Gore’s movie “An Inconvenient Truth” and get in touch with modern and environmentally responsible consumer demand; this is very low brow marketing.

John Lansdale
Guest
John Lansdale
14 years 11 days ago

A little math is needed. 15,000 x 3 / 20 = 2250 gallons x ($3.99 – 2.99) is about a $2000 subsidy each. Could be nothing, could be more. These cars should last at least another 300,000 miles. Hmmm, that’s another 12,750 gallons the owners will have to buy at the higher ($3.99) price for $50,800. A fuel efficient car or a hybrid could cut this in half or third. Hopefully, this talk of fuel economy won’t draw the attention of customers of these big vehicles to the real price they will be paying.

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