Chrysler US sales slide 55 per cent

WASHINGTON: Chrysler LLC reported on Tuesday a 55 per cent plunge in US sales in January from a year earlier, saying tight credit conditions worsened an already bleak industry situation.

The troubled number three US automaker said it sold 62,157 vehicles, less than half the number sold in January 2008 and a 31 percent month-over-month drop.

Some of the drop resulted from an 81 percent drop in fleet sales as Chrysler moved away from the segment.

Chrysler, which along with General Motors has received an emergency loan from the US government to avert collapse, said some improvement may be on the way.

"Chrysler LLC received the first four billion dollar installment of our seven billion dollar bridge loan from the US Treasury in early January," said Jim Press, president and vice chairman.

"However, it wasn't until later in the month that Chrysler Financial received its 1.5 billion dollar loan, greatly enhancing its ability to support our dealers and provide credit to our customers. We were very encouraged and working closely with Chrysler Financial, were immediately able to introduce our zero percent financing for customers."

Press said Chrysler and dealers are trying to stock more vehicles and to provide customers with the financing to purchase those vehicles. Chrysler has argued that many customers want to buy new cars but cannot get loans.

"While the government has made funds available to stimulate the market, these funds carry limitations, including stringent lending guidelines and conduit restrictions," he said.

"At the same time, many financial lenders are also operating with tighter standards and significantly increased reserves to hold their credit rating. All these factors have limited the amount of funds that the financial institutions can make available to consumers for the purchase of Chrysler vehicles, making it more difficult for us to close sales."