Opinion ID: 352548
Heading Depth: 1
Heading Rank: 2

Heading: the sales programs on which this case is based

Text: 7 During the entire period relevant to this suit the fleet market for automobiles, like the automobile market as a whole, has been dominated by General Motors and Ford. 7 Around 1962 Chrysler took steps to increase its sales by improving its image and its product and by introducing special programs designed to attract more business from fleet purchasers. These special fleet programs are the primary target of appellants' complaint. There is no dispute as to the general outline of the practices appellants attack; they may be briefly summarized as follows: 8
8 After the fleet purchasers buy their cars from Chrysler dealers, Chrysler grants subsidies (also called allowances or rebates) directly to the fleet purchasers. These subsidies have taken various forms, from a set rebate that is sent when the car is purchased (front end allowance) to a guarantee that the difference between the cost of a new Chrysler and its resale value will not be more than the comparable difference for Ford or General Motors cars (rear end allowance). Chrysler submitted uncontradicted evidence to the effect that these subsidy programs were established because the wholesale prices of new Chryslers were higher than the wholesale prices of comparable Ford and GM cars and the trade-in values of used Chryslers were lower than the trade-in values of Ford and GM cars. 9
9 Chrysler has established a subsidiary corporation, Chrysler Leasing Corporation, which buys cars from Chrysler at the same prices charged to the dealers and then leases these cars to major fleets most notably Avis and Hertz for terms of four to eight months. When the leases end, the cars are reconditioned and auctioned (first to Chrysler dealers) in a way that disperses them around the country for resale. 10 10
11 Chrysler has assigned special account executives to the largest fleet purchasers and has installed special equipment and procedures to facilitate their ordering of Chrysler cars. Chrysler has also entered into special promotional and advertising agreements with Avis in connection with Avis' leasing of Chrysler cars. 12
13 Appellants allege that several aspects of Chrysler's dealings with its dealers put illegal pressures on the dealers to sell at lower prices to fleets. These aspects include: 14 1. Minimum Sales Responsibility (MSR). Chrysler dealers have an obligation in their franchise to make a certain minimum number of sales per year. A dealer may count sales to fleet purchasers toward meeting his MSR. 15 2. Regional Representatives. Chrysler maintains representatives in the field who, among their other duties, encourage the dealers to make sales to fleet purchasers. 16 3. Factory Dealerships. Chrysler itself owns or controls some dealerships and thus has influence over the prices charged to fleets by these dealerships. 17 At least in part as a result of these programs, 11 Chrysler was able to increase its share of the total fleet market from 10.8% In 1962 compared to 41.1% For Chevrolet, 27.2% For Ford, and 20.9% For others (including other General Motors and Ford products but no other Chrysler products) to 21.2% In 1974 compared to 25.1% For Chevrolet, 23.9% For Ford, and 29.8% For others. 12 Chrysler's share of the domestic retail (non-fleet) automobile market also increased during these years, from 9.8% In 1962 to between 16 and 18% In the years 1965-1972. 13