Leasing: Chrysler Corporation - 1995
Posted: 8 May 1997
Date Written: March 1997
SUBJECT AREAS: Finance, time value of money, leasing, financing as a marketing tool.
CASE SETTING: 1995, USA, Automotive Industry.
Toyota has just introduced a low-priced leasing deal that has hurt sales of the Chrysler Cirrus. Steve Bartoli, a young MBA at Chrysler, needs to craft a response. This applied time value of money case introduces students to leasing in the context of a pricing case. Students explore the use of financing as a marketing tool as they calculate the present value of various promotional financing tactics, including low-interest-rate loans and discounted-lease deals. The case includes an introductory note on leasing, and is rich in institutional detail concerning the car buying process and how automotive lease payments are calculated.
JEL Classification: L10, L62
Suggested Citation: Suggested Citation