Originally Posted by Autoweek

Chrysler's recent TV commercial claims causing a stir at GM
JAMIE LAREAU | Automotive News and MARY CONNELLY | Automotive News
Posted Date: 7/26/05

DETROIT -- In a terse exchange, General Motors is challenging the Chrysler group to "take it back." And Chrysler isn't budging.

In Chrysler's recent TV commercials featuring former Chrysler Corp. Chairman Lee Iacocca, the automaker says Chrysler vehicles retain their value better than GM or Ford vehicles.

GM says that's not true if measured on a nameplate-by-nameplate basis. GM wants the Chrysler group to change the spots and is threatening to take action if it doesn't.

"We strongly disagree with the claims made in the current Chrysler advertising regarding the projected retained value of its vehicles compared to GM," says GM spokesman Jeff Kuhlman. "We are exploring various courses of action and have expressed our concerns to Chrysler."

GM sent a letter to Chrysler protesting the claim in the Iacocca commercials that Chrysler group vehicles "are projected to retain their values better than GM or Ford."

Chrysler is refusing to change the commercials, says Mike Aberlich, a Chrysler group spokesman.

"We respectfully disagree and we have responded to them," Aberlich says.

'Lawyer to lawyer'

Chrysler received GM's letter on Wednesday, July 20. Chrysler responded Thursday, July 21, Aberlich says.

Asked who signed the letters, Aberlich said the missives were "lawyer to lawyer" communications.

In its letter, GM asked Chrysler to withdraw its claim, Aberlich says.

A source close to the situation says GM will see whether Chrysler will bow to the pressure and retract its claim before pursuing further action. The source, who would not elaborate on what that action might be, says Chrysler has manipulated the data.

Chrysler, however, is sticking to its guns.

"The claim that we made was a Chrysler group weighted corporate average, and we stick by it," Aberlich says.

GM cited a nameplate-by-nameplate comparison in its letter to Chrysler, a Chrysler source says. Neither GM nor the source would not identify the vehicles cited.

According to year-to-date data from Automotive Lease Guide, a Santa Barbara, Calif., company that estimates residuals that are widely accepted by the industry, the projected residual value average for the Chrysler group is 41.8 percent after three years of use.

Ford's corporate average is 40.9 percent, and GM's is 39.8 percent, according to Automotive Lease Guide. Those figures, a percentage of the original sticker price, are sales-weighted to represent the accurate model shares within the brand.

Below average

The industry average is 44.3 percent. All three domestic makers fall short of industry leaders. According to Automotive Lease Guide, Honda has the highest residuals among nonluxury brands after three years, at 53 percent, trailed closely by Toyota at 52.8 percent.

Chrysler says that the weighted corporate average is valid and that GM uses it in its own ads.

"GM uses a weighted approach in some of its own advertising," the Chrysler source says. "In their truck ads, they use corporate average. That kind of average is common. Toyota and Honda are constantly using residual value claims."

GM's Kuhlman would not comment on GM's use of residuals in its advertising.

Since they debuted the second weekend in July, the three Iacocca commercials have contained a statement that the residual value claim is based on data provided by Automotive Lease Guide, Aberlich says.

Ford also takes issue with Chrysler's assertion. Ford's new products have high residuals, says Ford spokesman Dave Reuter.

"It doesn't surprise me at all that Chrysler is claiming better residuals than GM," Reuter says. "Everyone does better than GM, which has some of the poorest residuals in history."