Chrysler Slashing Vehicle Deliveries By 90,000

Declining truck and SUV sales leaves car manufacturer with too much inventory.

DETROIT (AP) — For the third quarter, DaimlerChrysler AG's Chrysler Group will slash deliveries to dealers by 90,000 vehicles, or almost 24 percent, as declining sales of trucks and SUVs have left it with excess inventories, said Dieter Zetsche, DaimlerChrysler's chairman, on Tuesday.

Retail shipments, for the second half of 2006, will be decreased by 135,000 units from Chrysler's previous target. Production will also be scaled back for the rest of 2006.

The 90,000 cut in shipments is down from the Chrysler's previous plan to ship 380,000 vehicles in the third quarter.

Zetsche's remarks, in a Webcast from DaimlerChrysler's headquarters in Stuttgart, Germany, came four days after the company said Chrysler's third-quarter loss would be $1.52 billion — more than twice what it had previously anticipated.

According to Zetsche, poor sales during this past summer forced the company to make the dramatic cuts. Chrysler had been hoping that an employee-pricing promotion would drive sales this year, since such promotions had helped Chrysler and its competitors break records last year.

But this year's zero-percent financing offers from Ford and General Motors ended up being more successful, said Zetsche.

Chrysler was the only company to repeat the employee-pricing offer, which offered outsiders the same prices that the company charges it own workers.

''After the disappointing sales performance in July and August, we had to finally bite the bullet,'' Zetsche said.

Zetsche said Chrysler was hit hard by the consumer shift away from gas-guzzling SUVs and pickups.

Most of the inventory reduction will be from the truck segment, which accounts for 71 percent of Chrysler's sales, he said.

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