DaimlerChrysler has reassigned Joe Eberhardt, sales and marketing chief of its north American Chrysler division, in response to dealers’ anger over an aggressive drive to bring down swollen inventories.
Detroit-based Chrysler said on Tuesday that Mr Eberhardt was leaving the company to take an unspecified retailing position in Mercedes-Benz’s US operations.
Mr Eberhardt, aged 43, was until recently a rising star at the world’s fifth biggest carmaker.
Raised in Germany with an MBA from New York University, he headed DaimlerChrysler’s UK operations from 1999 to 2003. Since arriving in Detroit, he has brought badly-needed discipline to Chrysler’s sales and marketing operations.
However, Mr Eberhardt’s reputation has taken a knock this year as Chrysler failed to adjust production to sagging demand, instead pushing its 3,400 dealers to take more vehicles into their showrooms. Mr Eberhardt’s forceful manner further antagonised the dealers.
The build-up of 2006 models has been especially damaging for Chrysler because it has been keen to focus attention on eight new models launched in the second half of this year amid ferocious competition.
Chrysler swung to a pre-tax loss of $1.5bn in the third quarter, and is in the throes of a sweeping review of its operations. “It’s been a pretty tough situation for Joe these past few months”, a Chrysler spokesman said. “We don’t have the best situation with our dealers right now, and they’ve been pretty vocal.”
Joe Straub, a Chrysler and Jeep dealer in Bethlehem, Pennsylvania, said: “They finally listened. It took a while to get there.”
In a further bid to appease dealers and boost sales, Chrysler last week offered rebates, known as dealer cash, totaling about $500m on 2006 Chrysler, Dodge and Jeep models. These vehicles make up close to a third of inventories, which is considered high given that the 2007 model year is already well underway.
Chrysler has also mailed 3m discount coupons to prospective customers offering $1,000 off the price of many models.
Chrysler said that its inventories dropped by 9,700 vehicles in November to 499,000 units, equal to 76 days’ supply. Inventories reached a peak of 647,000 in July.
However, the figure excludes an “unassigned inventory” that the carmaker has declined to quantify. Chrysler said that it was on track to eliminate the unassigned surplus by the end of the year.
The Chrysler spokesman said Mr Eberhardt’s move reflected both his own and the company’s wishes. “I guarantee you haven’t heard the last of Joe”, he added.