Chrysler Extends Gas Price Protection ~ Hybrid Car Review
Hybrid Car Review: Chrysler Extends Gas Price Protection

Monday, May 19, 2008

Chrysler Extends Gas Price Protection

Chrysler has decided to extend the gas price protection beyond the month of May and on until July 7. If you elect to lock in, you will be buying gas at $2.99 a gallon for the next three years. The guarantee covers 12,000 miles a year. It covers most of the Chrysler line-up.

Customers receive a credit card about six weeks after they buy their car. The credit cars can be used at most gas stations. No matter what the sign says, the owner only pays $2.99 a gallon.

Concern over high gas prices has been driving a lot of vehicle purchases lately and Chrysler is worried their cars are being overlooked. Now Chrysler has taken that out of the question for potential car buyers (see chart on how much you might save if you do choose to buy a Chrysler).

The latest comprehensive EPA figures — from 2007, when Chrysler was part of DaimlerChrysler — show DaimlerChrysler vehicles with fleet fuel economy of 22.7 mpg, the worst of any of the eight major automakers operating in the United States. Source: Autonews.
Chrysler set a hedge on gas prices (it's unknown how much they paid for it) in case gas prices do soar.

Chrysler has seen mixed but positive results depending on the model of car ("the highest take rates have been on the new Dodge Journey crossover, Dodge Caliber, Dodge Avenger and Chrysler Sebring sedan."). Also, a national promotion has just begun and a lot of local dealers were holding off until the national promotion began before they started. But interest in Chrysler itself has risen, with the Chrysler site seeing a 25% increase, with a 34% increase in internet leads.

According to this story from autonews, the idea for the promotion came from car dealers, not from the executives.

Press Release

AUBURN HILLS, Mich., May 19 /PRNewswire/ -- Chrysler LLC today extended
to July 7 the Let's Refuel America $2.99 gas guarantee program, which
offers customers the opportunity to lock in their gasoline purchases at
$2.99 a gallon for three years, up to 36,000 miles. The program was
launched on May 7 for the month of May only, but extended for a second
month in response to dealer and customer demand for additional time.

Even before the full impact of the national and local advertising has
been realized, the Let's Refuel America program already has created a high
level of word-of-mouth consumer awareness, with increased traffic coming
into Chrysler's 3,511 dealerships and onto its Web sites. After one week,
Chrysler's Web site activity is up 25 percent versus the previous week,
with internet leads increasing by 34 percent.

"Customers and dealers across America have told us they like the gas
guarantee incentive option, so we are providing a second month for shoppers
to take advantage of it," said Jim Press, Chrysler LLC Vice-Chairman and
President. "Let's Refuel America, the Lifetime Powertrain Warranty and the
New Day Packages are all examples of our commitment to deliver more value
and peace-of-mind to our customers."

Let's Refuel America Program Details

Through July 7, Let's Refuel America is available on virtually all
Chrysler, Jeep and Dodge compact vehicles, SUVs, sedans, minivans, and
pickup trucks, including its five vehicles that get 28 mpg on the highway
for an MSRP under $20,000. Not included in the program are the company's
high-performance vehicles such as the Dodge Viper, Dodge Challenger,
Chrysler Crossfire, and the entire SRT(R) lineup as well as the Dodge
Sprinter, Dodge Ram Chassis Cab and Jeep Wrangler.

Customers who purchase or lease an eligible Chrysler, Jeep or Dodge
vehicle have a choice of one of three incentive packages of similar value:
Cash back; 0 percent financing (for eligible customers); or the gas
guarantee program, which on some vehicles also includes up to $3,000
additional cash back. Only the Let's Refuel America incentive grows in
value if gas prices rise. Upon purchase, customers can evaluate the three
options with their dealer representative to determine which incentive best
meets their personal financial preference and tolerance for risk related to
rising gas prices.

"What our customers and dealers like best about this program is the
flexibility of three incentive options, each with a unique benefit," Press
said. "Some customers need cash back immediately for a down payment; others
don't like paying high interest rates; and many are tired of worrying about
rising gas prices and want to be protected. We are pleased to offer every
customer a choice of what's best for their individual situation."

Customers who select the Let's Refuel America $2.99 gas guarantee
program will receive a gas card (linked back to their own Visa or
MasterCard) that is valid at 97 percent of gas stations in the United
States. Purchases at the gas stations will be for the full price being
charged that day, but only $2.99 per gallon will be billed back to the
customers' credit card. Chrysler picks up the rest, regardless of how high
gas prices rise.

Initial Results

After the May 7 launch of Let's Refuel America and before the full
impact of the advertising has been realized, the highest take rates have
been on the new Dodge Journey crossover, Dodge Caliber, Dodge Avenger and
Chrysler Sebring sedan.

"The most incremental incentives in this gas program are on the
company's most fuel-efficient vehicles, which typically do not have this
level of incentive available," Press said. "Our customers who buy smaller
vehicles put great value on being protected against rising gas prices."

From a geographical perspective, the highest take rates have been in
the states of California, Connecticut, Indiana, Ohio, and Washington. These
five states are among the 12 highest fuel price states in the country.

"We are pleased that Let's Refuel America seems to resonate with many
Americans during this time of gas price volatility," Press said.

From a marketing perspective, Let's Refuel America is supported by
national television spots, Dodge Journey ads tagged with the program
information and national print, radio and Internet presence.

Fuel Economy Solutions

Chrysler currently offers six models that get better than 28
miles-per-gallon on the highway: Chrysler Sebring, Chrysler Sebring
Convertible, Dodge Avenger, Jeep Compass, Jeep Patriot and Dodge Caliber.
Through April, these six models combined have higher sales than in the
first four months of 2007.

The recently launched 2009 Dodge Journey comes with an available
173-horsepower, four-cylinder engine, helping it achieve best-in-class fuel

The Jeep Grand Cherokee diesel 3.0-liter engine provides a
class-leading driving range of approximately 450 miles and gets an
estimated fuel economy of 18 mpg/city and 23 mpg/highway for 4x2 models and
17 mpg/city and 22 mpg/highway for 4x4 models. Outside of North America,
where fuel-saving diesel engines are in higher demand, Chrysler offers 17
models with diesel powertrains.

This fall, Chrysler will launch in the United States, two new hybrid
SUVs -- the Dodge Durango Hybrid and Chrysler Aspen Hybrid -- boasting a
fuel economy improvement of more than 25 percent overall and 40 percent in
the city. In 2010, the Dodge Ram Hybrid will reach the market.

Chrysler currently is in the midst of a $3 billion powertrain
investment offensive to develop new fuel-efficient powertrains and axles
for its next-generation models.

Chrysler is committed to doing its share in meeting the nation's energy
and environmental needs. Recently, Chrysler joined the U.S. Climate Action
Partnership, to help find solutions to global greenhouse gas emissions.

Customer Advisory Board

In February, Chrysler created the industry's first Customer Advisory
Board to encourage a direct dialogue with customers and gather insight and
feedback. A recent Advisory Board survey generated the following results:

-- 76 percent of the community is "very concerned" or "extremely
concerned" about fuel prices.
-- 83 percent of the community responded that fuel prices will affect
their summer vacation plans.
(Note: the poll shows that 19 percent responded "extremely," 22 percent
responded "very much," 30 percent responded "somewhat," and 12 percent
responded slightly, 17 percent responded that it won't affect their

Program Development (As told by Mike Keegan, Chrysler LLC Vice
President Volume Planning and Dealer Operations)

As part of our constant pursuit of innovative ways to deliver value to
customers, Chrysler's incentive group put together a brainstorm session to
create the next important incentive program that would tap into consumers'
needs. In early March we hosted 25 Sales and F & I managers from our
dealerships across the country in Detroit for meetings at the Royal Park
Hotel in Rochester, Michigan. The first night the group got together at the
Walter P. Chrysler Museum to soak up Chrysler culture and history. It was
the first time we ever invited this group in and they were very
enthusiastic. We told them we really want to hear from you since you are
the closest to our customers. Tell us what their concerns are. They were
separated into two groups with each group responsible for presenting three
ideas each at the end of the day.

Both groups identified customer concern about the volatility of rising
gas prices as a top issue in the marketplace today and suggested we find a
way to alleviate customers concerns. These managers were really ahead of
the curve, as the rise of gas prices had not yet become the national news
story it is today. They really had the pulse of the market.

So we at Chrysler left with our assignment and immediately created a
30-40 person working group of Marketing, Sales, Incentives, IT, Legal, and
Finance people that met every day for the next two months. The meetings
were 5 pm every day conference calls, where each group reported out their

Because we were doing something that had never been done before, there
were hundreds of speed bumps along the way, but the team spirit drove a
"how do we solve it" attitude with a commitment to working through
challenges and not giving up. That is in the DNA of Chrysler, whether we
are inventing the minivan, Viper, PT Cruiser or the Lifetime Powertrain
Warranty. We were especially focused on making sure it would be a seamless
process for the customer, which took a great deal of IT work. It is very
exciting to have launched the program and to have gotten such a rousing
reception from dealers and customers.

Going forward, we will continue to look for innovative ways to deliver
value and satisfy the needs of our customers.

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1 comment:

Anonymous said...'s so easy to dupe people in this's no wonder it's called the land of's filled with idiots.

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