Chrysler Group said on Wednesday it would offer leases on its newest vehicles just over a year after sharply tighter credit markets and plunging vehicle values forced it to retreat from the market.
GMAC, which became Chrysler's affiliated financial company as part of the automaker's restructuring in bankruptcy, said new leases would be more narrowly targeted than the cut-rate deals offered earlier this decade as a way to boost sales.
Chrysler said it would offer lower-rate leases on six vehicles, including its minivans and Ram pickup trucks, through the end of September as a special promotion.
In addition, the automaker now under the management control of Italy's Fiat SpA
I'm excited about it, said Chuck Eddy, owner of a Chrysler and Dodge dealership in Youngstown, Ohio.
Until last year, major auto manufacturers had subsidized lease deals to lure American customers into showrooms with offers of monthly payments as low as $99.
But tighter credit markets and plunging resale values for SUVs and large trucks exposed the risk of that strategy and forced U.S. automakers to take billions of dollars in losses.
At its peak last spring Chrysler had leased almost one-fourth of its overall sales, according to data compiled by Edmunds.com.
On some models, such as the Jeep Liberty, leases had accounted for almost half of all sales, according to the data.
In recent months, resale values for used cars have been creeping higher, encouraging automakers and their affiliated finance companies to return to leasing.
GM announced a return to limited leasing in August.
Eddy said Chrysler's return to leasing would be a much saner and more organized financing option than the automaker and its domestic rivals had offered earlier this decade.
The days of a $99 monthly lease for Dodge Dakota and Jeep Liberty are gone, said Eddy, who has been active in lobbying U.S. lawmakers to support dealerships in recent months. It was a sure-fail mission for GM and Chrysler.
Another Chrysler dealer said the return to leasing would help regain ground lost last year when the automaker pulled out of the market.
I'm jubilant, said Alan Helfman of River Oaks Chrysler Jeep near Houston. We used to do 25 to 30 leases a month.
Both GM and Chrysler have come through a restructuring under the oversight of the Obama administration's autos task force and with the aid of some $60 billion in federal funding.
Chrysler's U.S. auto sales have dropped 39 percent this year through August.
(Reporting by Kevin Krolicki and Bernie Woodall, editing by Matthew Lewis)