Early Results Prompt Chrysler To Extend $2.99 Gas Program

Credit Cards used only at gas stationsChrysler's "Let's Refuel America" incentive program, launched on May 7, was supposed to end in early June. Now, only two weeks into the program, the company has opted to extend the program through June.

The company says it has had such a strong response at dealerships and online that it wants to keep going, especially with gas prices continuing to rise. Jim Press--vice chairman/president, of the Auburn Hills, Mich., company, formerly a division of Daimler AG--says the effort has boosted sales of cars and trucks.

Chrysler launched the effort to get consumers to buy cars despite gas prices by dangling cards locking in $2.99-per-gallon gasoline for three years or 36,000 miles. The program enables buyers of Chrysler, Dodge or Jeep vehicles to apply for a "Let's Refuel America" card that they can use at participating gas stations. Instead of paying the pump price, the consumer is billed $2.99 a gallon for either regular gas, E85 or diesel fuel. Chrysler pays the difference.

"The reason [for the extension]," says Press, "is, boy, have we gotten a great response. It has resonated perfectly with the needs and concerns of customers. They are very pleased to have the peace of mind, to take the worry of gas volatility out of the market." After one week, Chrysler's Web site activity was up 25% versus the previous week, with Internet leads increasing by 34%. Gasoline prices, he noted, have peaked at around $4 in some areas, and are averaging around $3.80 a gallon, "It's up 20 cents since we introduced the program."

Press said the program has increased lead traffic 25% and purchase consideration by 17%. He said take rates have been highest on Chrysler vehicles with better mileage: the Dodge Journey crossover, Dodge Caliber, Dodge Avenger and Chrysler Sebring sedan. "That is consistent with what we wanted to do," he said. Per the company, the highest take rates have been in California, Connecticut, Indiana, Ohio and Washington, among the 12 states with the highest fuel prices in the U.S.

Steve Landry, EVP/North American sales, said the company decided to extend the program at last week's annual dealer council meeting in Detroit. "We decided to announce it now so we could get the program in place so that by early June dealers can do targeted direct mail," he says. Landry said traffic at the company's 3,511 dealerships is up. "This past weekend, traffic was 15-20% higher than the previous weekend," he says. "The dealers are very happy that we as a company have taken a step out of the normal incentives. We have two solid weeks left in the month, so we expect that the momentum will carry through Memorial Day weekend."

Landry says the overall take rate is between 4% and 5%, "which is in the ballpark of what we thought it would be." The fuel card is one of three incentives the company is offering. Chrysler is also dangling cash back, or 0% financing for eligible customers. With some vehicles, the fuel-card deal includes $3,000 cash back. Deborah Meyer, VP/CMO, says the program is part of the broader "Chrysler Listens" platform, "and we are working with dealer networks to do that on a unified basis. It is leveraged in all media. All of our dealers' associations and national ads are focused on 'Let's Refuel,' so we think it will continue to build momentum."

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 lineup as well as the Dodge Sprinter, Dodge Ram Chassis Cab and Jeep Wrangler.

Tags: automotive
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