Chrysler Plans to Cut Spending

Financially ailing DaimlerChrysler will cut ad spending by at least $100 million in 2002 for its Chrysler Group brands, a top marketing executive said.

Jim Schroer, evp of global sales and marketing for the Chrysler Group, said last week that he wants to limit spending on marketing to what the automaker thinks will help it maintain its market share from fourth-quarter 2001. “We owe it to our shareholders to get back into the black,” he said.

The marketing cut would follow a decrease in spending last year, when Chrysler spent $860 million during the first three quarters, a 15 percent drop from the same period a year earlier, according to CMR.

Chrysler’s lead agency is Omnicom’s PentaMark. Along with Schroer, executives who set the budget are Jeff Bell, Chrysler Group vp, marketing communications, and George Murphy, Chrysler Group svp, global brand marketing.

The automaker is attempting to concentrate spending cutbacks on production, which would continue a trend. The Chrysler Group produced 38 Dodge ads in 2000, but only 16 last year, with plans for 16-20 in 2002, Bell said.

Chrysler also plans to cut back on its upfront media buying in an effort to get better rates by buying what’s available later. Additionally, the company intends to fine-tune its Internet approach, Bell said.

Chrysler plans no corporatewide advertising in 2002. “All of the individual brands need to add value,” Schroer said. Corporatewide campaigns muddle the messages and end up with what he called “brand salad.”

Other automakers anticipate a tough year ahead with more spending cuts. GM spending in 2002 will be down, with cuts expected to remain in the single-digit percentage range, said John Middlebrook, GM’s vp and general manager. GM spending declined to $1.2 billion from January through September of 2001, compared with $1.9 billion for the same period in 2000, according to CMR.

Ford declined comment on 2002 spending, but last week unveiled cost-cutting measures that included plant closures, layoffs and the dissolution of several nameplates.