(if you were in the car biz in the 00’s and want to chime in/check my work, feel free...just maybe turn your location off just in case any of your former customers are out there still pissed about what you did to them)pic.twitter.com/wSpDnqgbv9
-
-
Show this thread
-
So rewind to the late 90s: economy was strong for a good chunk of consumers (definitely not everyone), and while lending wasn’t the free-for-all it was to become, it wasn’t terribly hard to get financing (again, a good chunk of people, but definitely not all)...
Show this thread -
the auto industry was doing ok generally, but US companies were in a slump; GM and Ford were doing trucks, suvs, and a lot of fleet stuff (municipal vehicles, rentals, etc.) but were getting the brakes beat off them by Japanese companies when it came to passenger cars...pic.twitter.com/fBCLA0K7LC
Show this thread -
Which brings us to the third of the Big 3: Chrysler. They had Jeep, (which has always been pretty solid), the Ram trucks, (which weren’t quite putting up F-150 and Silverado numbers), and were doing really well with minivans. The problem is Chrysler wasn’t just making shitty...
Show this thread -
passanger cars, they were making A LOT of shitty passanger cars. If you remember, they were making Chryslers, Dodges, and Plymouth, each with a full line of slightly differently badged heaps of junk (think Cirrus/Stratus/Breeze)...
Show this thread -
Anyhoo, Chrysler was hemorrhaging money, but Daimler-Benz came in, saw some potential, bought a huge stake, and got to work on a major rebrand/restructure, which basically looked something like this: Jeep: You’re cool. Dodge: Let’s hit the gym and bulk up. Plymouth: lolbye
Show this thread -
-
The answer ended up being something pretty genius from a marketing standpoint: going full on Americana nostalgia with some really out-of-the-box design that harkened back to a time when Chrysler was a fairly upsacle brand. The result being...well, this...pic.twitter.com/oERT1hpZcL
Show this thread -
And when this thing dropped??? HOLY SHIT!!! People went absofuckinglutely bananas.
Show this thread -
I know some of you youngs might not believe it, but there were 50-11 different articles claiming the *The PT Cruiser* was the sign the US auto manufacturers were going to reclaim ALL their former glory heading into the 21st century.pic.twitter.com/69Z2fSziYg
Show this thread -
More importantly to this story, people around the country LITERALLY lined up just go get a look at this thing. In some parts of the country, there were so many pre-orders dealers were telling people there was a 6 month wait just to test drive one of them. It was madness...
Show this thread -
But here is where it starts to get really interesting: the car caused such a mania that Chrysler couldn’t keep up with demand. This lead to two very important developments: 1. Chrysler, deciding they had a winner on their hands, started crushing out inventory over the few years..
Show this thread -
2. The dealers saw they had a cash cow with the first wave of buyers and started charging all kinds of markup. You went in to the dealership for a PT Cruiser with an MSRP of let’s say $28,995, but between Regional Dealer Markup, Special Order fees, clear coat, extended...
Show this thread -
warranties, and whatever else they could throw on top of it (on top of state taxes/fees), and you left with a contract for $35,000-$40,000 EASY...
Show this thread -
So for the first couple of years at least, Chrysler was like:pic.twitter.com/jecAebasoE
Show this thread -
-
BUT as happy as they were when they got the keys, that first wave of buyers now owed $35k-$40k on a $30k *PT Cruiser* that immediately started to depreciated the moment they drove off the lot...pic.twitter.com/BWmGGwd2bj
Show this thread -
so over the next couple of years, the buzz kind of wore off; all of the first wave buyers finally got their cars, and as it turned out, there were a lot of people who just weren’t that enamored with bright purple, wooden panel cladded hatchbacks. PLUS it turns out that...
Show this thread -
for all the innovative design, the PT Cruisers were basically the same shitty Chrysler K cars, just with more expensive options that needed fixing.pic.twitter.com/WI386y3nNm
Show this thread -
Now, remember that part about Chrysler deciding they needed to mass produce this vehicular messiah of the 21st century US auto industry?pic.twitter.com/S9wmSvOVrf
Show this thread -
So now Chrysler has WAAAAAAAAAAAAAY too many of these cars than they know what to do with. Just lots and lots full of misfit PT Cruisers that no one wants. Dealers are refusing to take delivery—like sending the delivery drivers away.
Show this thread -
Chrysler: Look, y’all are going to start taking these motherfucking PT Cruisers or we’re not going to send you ANY new inventory. No trucks, no minivans, not a single new vehicle.pic.twitter.com/7JlbgnhH7z
Show this thread -
Dealerships: Used cars are more profitable anyway, so....where do we go from here?pic.twitter.com/2reIERccwC
Show this thread -
So here’s where the financing part starts to get a little goofy: Chrysler’s financial arm says listen, we’ll loosen up our lending guidelines if Chrysler starts offering some rebates/bonuses and dealers agree to start taking inventory again.pic.twitter.com/XwjXw3ZPHw
Show this thread -
All parties agreed, and at that point, chances were if you came within 500ft of a Chrysler dealership a whole squad of people were trying to get you out the door with a new PT Cruiser...
Show this thread -
No down payment? No problem! No credit? No problem! Bad credit? No problem! No verifiable income? No problem! No pulse? Hey, these things already kind of look like a Hearse right? Just please get these horrible hunks of ass of the lot!!!pic.twitter.com/bOstSE2TIy
Show this thread -
But check out how the math works: Dealers lower the MSRP from $27,995 to $25,995 Factory Rebate: $4,000-$5,000 The dealership, who will get a kickback for selling distressed product at a high volume adds another $4,000-$5,000 discount so people who would have been laughed+
Show this thread -
out of the dealership a few years ago are walking out now paying $15,995 for a brand new car. Chrysler is happy because they are moving metal and still making a bit of profit, the dealerships aren’t making much on the front end, but again, high volume and manufacturer kickbacks
Show this thread -
and the finance company is the big winner because they are making money (first time/bad credit buyers pay a higher interest rate), but with the discounts, the contracts are all like 60% of the total value of the vehicle so not that big of a risk if a chunk of them go into repo...
Show this thread -
So it looks like the crisis has been acerted for Chrysler, BUT... Remember all of the first wave buyers? The folks who left the dealerships a few years ago paying $40k for the same PT Cruiser your cousin Curtis just picked up for $15k and change?pic.twitter.com/RVLMMW5BWh
Show this thread - Show replies
New conversation -
Loading seems to be taking a while.
Twitter may be over capacity or experiencing a momentary hiccup. Try again or visit Twitter Status for more information.