Chrysler's financial arm no longer offering leases

Chrysler LLC's financial division will no longer be offering leases to U.S. consumers on Chrysler products as of August 1st.

The automaker will be holding a conference call with dealers later today to go over the changes and the reasons behind the decisions, but Chrysler spokesperson, Bill Porter, told Reuters "We are shifting our strategy to focus on retail products.

"The move comes amidst Chrysler's attempt to get 20 banks to renew a $30 billion credit facility for the automaker's financial arm. The rise in borrowing costs next month will make it more difficult for Chrysler to offer low-interest loans and could spell further disasters on the sales front.

Chrysler offering even more incentives to close out July

The automotive sales sector is in a major state of flux as consumers continue to run from SUVs and pickup trucks into smaller, more fuel efficient cars. One manufacturer hit especially hard by this transition is Chrysler, a company that recently posted the worst fleet average fuel economy numbers of all major automakers in the U.S. due to its truck-heavy lineup. Still, the automaker has built up a large supply of Chrysler, Dodge and Jeep utility vehicles that they have got to get off dealer lots somehow. To ease consumers into the fuel-thirsy utes, Chrysler has introduced new incentives of zero-percent financing for 72 months on the 2008 Dodge Durango, Chrysler Aspen and Jeep Grand Cherokee and Commander. While the lack of any financing charges will certainly impact the bottom line, it is nothing compared to the losses the automaker has been hit with over its past lease deals. In fact, truck and SUV residuals are so bad these days that Chrysler Financial has gone so far as to completely cut leasing out of its available portfolio starting August 1. The financing deals announced today are scheduled to continue through Thursday, July 31.

Normally the privately owned Chrysler LLC is under no obligation to reveal its financial performance to Wall Street, but yesterday the Cerberus-owned automaker was forced to show a few pages from its accounting books thanks to one of its largest stakeholders and former owner, Daimler AG. The German automaker revealed that in the last six months, its 19.9% stake in Chrysler has cost it $585 million. To clarify Daimler's numbers, Chrysler also revealed yesterday that the loss being attributed to it, all of which was incurred in Daimler's first fiscal quarter of the year, is around 65 million euro, or $103 million, using American accounting standards. Perhaps realizing that all analysts had to do was multiply Daimler's loss by five to arrive at Chrysler's total loss for the last quarter, the automaker just came right out and said it lost about $515 million. While a mere pittance to the $8.7 billion worth of red ink Ford spilled during Q2, it was enough to drag down Daimler's numbers halfway around the world.

Test Drive: Dodge Journey crossover is quite appealing
Updated

Dodge
The 2009 Dodge Journey has a spacious interior, nifty styling and an optional V-6 that really scoots.

Quite an accomplishment, Chrysler's Dodge Journey.
It's a crossover SUV based on the Dodge Avenger sedan. Even though the two share unseen hardware, they're not at all alike and won't steal sales from one another. And because Journey is a new vehicle, it represents additional sales for dealers and the brand.
AUDIO GALLERY: More photos with Healey's comments

Journey also manages to more or less replace the lame-duck Chrysler Pacifica in the corporate product mix, as well as be the company's reasonable stand-in, without the boring-parent stigma, for the discontinued Dodge and Chrysler short-wheelbase minivans.
Journey's swing-open rear doors rather than van sliders make all the difference in image and appearance, but they still can be opened very wide (if you have room) for exceptional access.

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The first Journeys hit showrooms in February; only now is the pipeline full.
Notable is that Journey continues the move toward higher-class interiors seen in many of the company's recent Chrysler, Dodge and Jeep products.

The test vehicles were a loaded, $35,000, all-wheel-drive preproduction R/T and a sparser, $23,000, front-drive, regular-production SXT. The SXT seemed like a roomy family hauler with a pleasant array of features at bargain price: No need to cram in like sardines for that eight-state road trip or settle for bottom-feeder execution to save the family budget.
The R/T seemed like a relatively value-priced alternative to the pricier Honda Pilot and Toyota Highlander. The Journey also offers an optional third-row seat that's not available at any price in the Ford Edge, probably its most direct rival.

On the minus side, Journey offers no fuel-sipping alternative power plant, such as Highlander's hybrid drive, in this era of fuel-induced hysteria.

There "could be" a fuel-economy powertrain for the U.S. eventually, says Larry Lyons, Chrysler vice president in charge of most vehicle development. He notes that foreign-market Journeys use a Volkswagen diesel approved for sale in the U.S. (VW's bringing it here soon.) But he won't say if he's hinting or teasing.

What stuck out:

•Styling. Nifty. Trim, taut. Not ruined by exterior uglification items such as spoilers, spats and running boards. Journey reminds you of a minivan (implying space and convenience), but doesn't quite look like one (ducking the strong anti-van prejudice of many buyers). How's that for walking the line?
Tasty icing on the cake: American-style dual exhausts. One big pipe under the left side of the rear bumper and another on the right, not euro-style two pipes together on one side, or — horrors — a single pipe. It's been a terrible irony to see the Japanese become the main users of all-American duals. Applause for Lyons, who held fast against the corner-cutters.
Why care about duals? Well, two pipes let the exhaust out a little faster than one. With proper tuning, that lets the engine produce more power and run cooler — even if the exhaust runs through a single muffler and catalytic converter before it hits the dual outlets.
Plus, they look so drop-dead good.

•Cleverness. It's as apparent as you'd expect from the company that popularized minivans. Stowage sites illustrate: two under-floor bins in front of the second-row seat. Another under the front passenger's seat cushion. Lift it, stash your goods, and close, or, if you don't need the seating, leave it up as a bin for purse or laptop bag.
The cargo floor has additional space below, too — lots of it if you pass on the optional third-row seat, still a useful amount if you don't.
The glove box has a cubby linked to the air conditioning to keep a couple of soft drinks cool.
Optional pop-up booster seats in the second row are a great idea, but didn't seem comfy to a 5-year-old who used them.

•Powertrain. The optional V-6 scooted as if chased by bees, and the six-speed automatic, driven hard, sliced off shifts like a deli saw through salami.
But the transmissions were bedeviled with jiggles and shuffles when driven moderately — and several times served up violent jolts in low-speed shifts. Peculiarly, the production model, which should have all the bugs worked out, shifted worse than the preproduction vehicle. Chrysler's lifetime powertrain warranty is some comfort.
The standard four-cylinder engine, equipped with a four-speed automatic, wasn't tested.
Optional all-wheel drive is normally in FWD mode and shifts up to 60% of power to the rear wheels when the fronts spin or the driver accelerates hard.
•Dynamics. Too-boosted power steering was unpleasant. But unexpectedly, the steering retained good on-center feel and avoided the sloppy action that usually accompanies over-boosted systems. Brakes were OK, neither touchy nor somnambulant.
R/T and AWD models have a sporting suspension that took corners in a more stable way than the FWD SXT's slightly soggy underpinnings.

•Interior. Quieter than many crossovers tested lately, which makes it restful on long trips and gives it a premium air. As noted earlier, nicer materials and trim than has been the case in recent Chryslers.

The second row slides, to tailor the mix of people and cargo. Also, it easily flip-folds forward for access to the optional third row.

Swiveling your body and climbing out of the driver's seat caused plastic seat trim to creak on the production model, not the preproduction.

The disc for the optional rear DVD system has to be loaded into the dashboard player from the front seat, which either is a way to police what the kids are watching, or a danged nuisance for stressed parents. When the screen's down in viewing position, it blocks much of the driver's rear view.

Funny how we get all het up about regulations involving tire pressure monitoring and electronic stability control, but ignore basics such as preserving the driver's view to the rear.
An easy remedy would be for automakers to offer video screens in the backs of the front-seat head restraints, eliminating visibility problems. They could do it for about the same money as the ceiling screen, and it's how Ford handles it if you want the glass roof in the Edge, which leaves no ceiling space to mount a DVD screen. Yes, screen-equipped head restraints (aka headrests) can be designed to safely absorb crash impact and not be a danger to the front or back occupant's skull.

The easy quickness of the V-6, the thoughtful interior and relatively modest prices make Journey a pleasing alternative to the flood of other crossovers. If you aren't troubled by the transmission's lack of cotillion manners and that bothersome seat-trim creak, you can consider Journey a solid contender. Or you can look again later, to see if Dodge exorcised the glitches.

2009 Dodge Journey
What? Crossover SUV based on a stretched Dodge Avenger chassis with two or three rows of seats, four-cylinder or V-6 engine, front-wheel drive (FWD) or all-wheel drive (AWD), in three models: SE, SXT, R/T.
When? On sale since February.
Where? Built at Toluca, Mexico. BEST DEALS AT HAROLD ZEIGLER CHRYSLER DODGE JEEP IN GrandRapids / Grandville

Why? Crossovers are the haven of choice for fuel-price-frantic owners of traditional, truck-based SUVs.

How? Stretch the Avenger wheelbase 4.9 inches, design a spacious body and interior but use Avenger's engines, transmissions and optional AWD system to cut costs.
How much? Base SE FWD with four-cylinder starts at $19,985, including $625 shipping. Loaded R/T AWD, about $35,000.

How powerful? SE has 2.4-liter, four-cylinder rated 173 horsepower at 6,000 rpm, 166 pounds-feet of torque at 4,000 rpm; four-speed automatic transmission.
All other models have a 3.5-liter V-6 rated 235 hp at 6,400 rpm, 232 lbs.-ft. at 4,000 rpm; six-speed automatic.

How lavish? Among standard features in all models: front, side, side-impact and head-curtain air bags; anti-lock brakes; stability control; AM/FM/6-CD stereo with input jack; air conditioning; folding, sliding, reclining second-row seats; tilt/telescope steering column; power steering, brakes.

How big? A few inches longer and narrower than Ford Edge. Journey is 192.4 inches long, 69.5 inches tall, 72.2 inches wide, 113.8-inch wheelbase. Weight ranges from 3,801 to 4,233 pounds. Passenger space is 125.6 cubic feet. Cargo space is 10.7 cubic feet behind third row, 37.1 behind second row in three-row vehicles, 39.6 cubic feet in two-row vehicles; 67.6 cubic feet with second, third rows folded.
Tows 1,000 pounds (four-cylinder) or 3,500 pounds (V-6 tow package). Carries 1,099 to 1,367 pounds depending on model. Turning circle: 39 feet (19-inch wheels), 38.5 feet (17-inch, 18-inch wheels).

How thirsty? Four-cylinder rated 19 miles per gallon city, 25 highway, 21 combined. V-6 FWD 16/23/18, AWD 15/22/17.
Window sticker on early vehicles may differ slightly because of since-corrected rounding error, Chrysler says. Trip computers in test cars showed 15.6 mpg (AWD) and 16 mpg (FWD) in suburban driving.
Tank holds 20.5 gallons (FWD), 21.1 (AWD). Regular specified for four-cylinder. Midgrade recommended for V-6.

Overall: Quite appealing.