Report: GM slams Chrysler ads

GM urges Chrysler to change TV spots that tout resale value of Chrysler vehicles.

July 26, 2005; Posted: 11:25 a.m. EDT (1525 GMT)

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NEW YORK (CNN/Money) - General Motors is demanding that DaimlerChrysler's Chrysler Group pull a new round of advertisements which, GM says, make false claims about the resale value of GM cars, according to a news report by an industry trade publication.

The Chrysler advertisements, which feature former Chrysler chairman Lee Iacocca, contend Chrysler vehicles retain their value better than GM or Ford cars, Automotive News reported Monday.

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

After the ads aired during the second weekend in July, General Motors issued a letter to its crosstown rival asking that it change the television spots, which promote Chrysler's new discount program.

The statement was false when vehicles were compared on a vehicle-by-vehicle basis, GM said in a July 20 letter cited by Automotive News.

Chrysler stands by the claim which is based on a weighted corporate average, Chrysler spokesperson Mike Aberlich told Automotive News.

Chrysler has refused to pull or alter the spots, saying the claim is supported by data from Automotive Lease Guide (ALG), a California-based company that provides estimates of the resale value of vehicles.

ALG estimated that the average Chrysler vehicle would retain 41.8 percent of its value after three years while GM would maintain just 39.8 percent of its original price, according to the report.

All three Detroit automakers - GM, Chrysler and Ford, which posted a 40.9 residual value - all fell below the industry-wide average of 44.3 percent, according to ALG data cited by the report.

Ford spokesman Dave Reuter also challenged Chrysler's claim, noting that many of the company's newest models have high resale values.

General Motors may take further action if Chrysler does not change the advertisements, according to a source cited in the Automotive News report.