DETROIT – DaimlerChrysler AG's (DCX) Chrysler Group will cut deliveries to dealers by 90,000 vehicles, or nearly 24 percent, in the third quarter, as falling sales of trucks and SUVs have left it with bloated inventories, DaimlerChrysler Chairman Dieter Zetsche said Tuesday.
For the entire second half of the year, Chrysler plans to bring retail shipments down by 135,000 units from its previous target. It has also scaled back production for the rest of the year.
The 90,000 cut in shipments is down from the company's prior plan for shipping 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.
Zetsche said the company was forced to make the dramatic cuts after dismal sales this summer. Chrysler was counting on an employee-pricing promotion to drive sales after such promotions helped Chrysler and its competitors break records last year.
But Zetsche said this year's zero-percent financing offers from Ford Motor Co. (F) and General Motors Corp. (GM) ended up being more successful. 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 sport utility vehicles and pickups. Trucks account for 71 percent of Chrysler's sales, he said. Most of the inventory reduction will come in that segment, he said.
DaimlerChrysler's U.S. shares rose 5 cents to $49.23 in morning trading on the New York Stock Exchange.