[frances]

Price of PT Cruiser slashed

By JEFF GREEN
Bloomberg News
08/19/2004

DaimlerChrysler AG's Chrysler unit will cut the price of its PT Cruiser model by about $4,000 to compete more directly with small cars from Toyota Motor Corp. and Honda Motor Co.

The 2005 PT Cruiser line will include a version that starts at $13,995, about the same price as a Honda Civic or Toyota Corolla, said John H.O. Sloan, director of Chrysler car marketing. Sales of the 1940s-style PT Cruiser, introduced in 2000, reached 144,717 in 2001 and fell the following two years, according to Autodata Corp.

"We were rocking and rolling at first, but now there's a lot more competition," Sloan said.

Chrysler chief executive Dieter Zetsche is banking on nine new vehicles this year to regain some of the market share lost to Toyota, Honda and other overseas rivals in the past five years. Cutting prices by 23 percent to rebuild sales on an existing vehicle marks a different approach.

PT Cruiser sales have risen 0.8 percent this year with the addition of a convertible, one of the nine new Chrysler products. The automaker previously added 72-month loans and features such as a turbocharger, simulated wood paneling and chrome parts to boost sales. Last year, Chrysler sold 107,759 PT Cruisers in the United States, down 22 percent from 2002.

The lowest-priced PT Cruiser, which will go on sale in October, won't have air conditioning or automatic transmission as standard equipment. In addition to the $13,995 version, Chrysler will cut prices about 10 percent on the turbo edition and 19 percent on other 2005 PT Cruiser models.

"It doesn't hurt to try, but I don't know if it's going to work," said Alan Baum, president of Planning Edge, a market research company in Birmingham, Mich. "Small car buyers are looking for low cost, so design probably isn't important."