May 22, 2009 - (EX)Chrysler Dealerships, 789 Dealers Nationwide

Dealerships on Chrysler’s Chopping Block Slash Prices

Archer Dodge of Houston, owned by Todd Archer, right, and managed by Bart Ferdinand, is one of the dealerships Chrysler has told to close. Many Chrysler dealers scrambled to save the company recently, some taking on extra inventory. Then one in four Chrysler dealers was told to close.

Most of the 789 car dealerships that Chrysler is cutting by June 9 have slashed prices by thousands of dollars as they desperately try to clear the vehicles clogging their lots before then.

Their misfortune in being rejected as part of the carmaker’s reorganization in bankruptcy is creating unprecedented bargains for car shoppers.

“No offer anywhere near reasonable will be refused,” says the Web site of Preston Chrysler Jeep in Warren, Ohio.

“If you ever wanted to absolutely steal a Chrysler or Jeep, get to Buzz Leonard today. Save over $9,000,” shouts the voiceover in an ad for Buzz Leonard Chrysler Jeep in Panama City, Fla.

In Dubuque, Iowa, Mike Finnin Chrysler Jeep has a clock on its Web site counting down the days, hours, minutes and seconds until its franchise is terminated June 9. It is advertising discounts of as much as 30 percent, a savings of up to $10,634.

“Some of these prices are so embarrassing,” the owner, Mike Finnin, said. “We’re just doing whatever it takes to sell these vehicles. We’re losing money on most of them.”

Because Chrysler is operating in bankruptcy protection, it is refusing to buy back any of its dealers’ vehicles. When it announced the dealer cuts May 14, it said there were 44,000 vehicles at those stores.

The Jeep dealers that Chrysler is cutting are selling their vehicles for about $1,205 less than other dealers, according to Edmunds.com, a Web site that gives car-buying advice to consumers. At the beginning of this year, those same dealers were selling vehicles for about $710 less than the others.

The difference has more than quadrupled at dealers selling Chrysler models, which generally sell for $20,000 to $30,000. Shoppers are saving an average of $2,672 by buying a Chrysler model from a dealer being terminated rather than another Chrysler brand dealer, Edmunds said. The savings offered by Dodge dealers that are being cut over other Dodge dealers is $823.

Dealers say business has been brisk, though not very profitable, since starting their big sales, as consumers hearing about the dealer cutbacks rushed out to find deals. They expect sales to slow as lots begin to get picked over and more popular models become harder to find.

Pohanka Chrysler Dodge in Leesburg, Va., sold 20 new vehicles in the first few days of its liquidation sale and still has about 100 left. Normally the store would need three months to make that many sales.

This week, Pohanka sold a Dodge Nitro sport utility vehicle for $17,510, 40 percent less than its sticker price of $29,170.

“That’s thousands of dollars less than what we would have gotten before,” the dealer, Ray O’Bryhim, said. “We’ve got a very short period of time.”

Although General Motors also is cutting a large number of dealerships, they are not scheduled to lose their franchises until late next year, so most have not started liquidation sales.

Many of the Chrysler stores plan to stay open and sell used cars or other brands. They are in the awkward position of trying to unload their inventory without giving the impression they are closing. That is why Fury Dodge, in Lake Elmo, Minn., is having a “not going out of business sale.”

Original Story - New York Times