Are the days of car leasing coming to an end? They are if your auto brand of choice is Chrysler. Today, the New York Times reports that Chrysler is exiting the auto leasing business at Chrysler Financial as of August 1, 2008. It seems the price of gas is to blame. Apparently, the resale value on gas guzzling SUVs has dropped so low that Chrysler is losing money on what was once a cash cow financial product.
Coming from a financial marketing background, I can't say I'm surprised by this shift in strategy. Just as we saw in subprime lending, the bottom had to fall out eventually. Looks like the time has come. Only time will tell if others follow Chrysler's lead and abandon leasing as well. The question is - is this strategy change coming too late to save U.S. auto companies that are losing money quarter after quarter?
What do you think?
I think they may be too late. They should've shifted to more fuel-efficient models with a lower entry point quite some time ago. You think we would have learned when the Japanese and other asian automakers started competing heavily in the late 70's and early 80's, but back then it was that the quality and construction of american vehicles was so abysmal and the U.S. automakers were indifferent.
"Those who cannot remember the past are condemned to repeat it." and I guess that's applicable here.
Posted by: Scott | July 28, 2008 8:53 AM | Permalink to Comment