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FCA sales down on fleet drop

Discussion in 'Mopar News' started by Dave Z, Dec 1, 2017.

  1. Erik Latranyi

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    So, they do not need to wait for Grand Caravan to be out of the way, but are choosing to wait until 2021 for other reasons (like Net Debt Zero) and other things.
     
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  2. redriderbob

    redriderbob Mopar Guru!
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    Also remember Chrysler had two minivan plants when the first generation Pacifica was being built... St. Louis and Windsor. People tend to forget that.

     
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  3. redriderbob

    redriderbob Mopar Guru!
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    No. I feel like I have gone through this a hundred times on here. Grand Caravan is a lot seller. It was originally supposed to die in 2015 when the Chrysler Pacifica was going to debut for the 2016 model year. However, that got pushed back to launch in 2017 model year. Grand Caravan was then to be axed in 2016, but since sells were strong FCA US decided to keep production going. Reason being was the vehicle is a "cash cow". Because the vehicle is well paid off, it is almost pure profit.

    So why build a vehicle that is going to cost almost a billion dollars of investment when the current older vehicle is selling the best in its segment and you are making a ton of money on it? So FCA US planned to cancel the Grand Caravan in 2017 for the 2018 model year, however 2017 sales were even better. So FCA US had to invest to update the side air bags to meet new crash test standard for 2018, and since the vans already had a rear back up camera it became standard because of the U.S. regulations making backup cameras standard for the 2018 model year.

    After the 2019 model year, the Dodge Grand Caravan would require so much money to update to meet federal requirements, that a new vehicle will replace it at Windsor. As for the Portal vehicle, it has yet to be finalized for engineering, design and testing and probably won't be until the spring of 2020. So, Grand Caravan will live on making a ton of money and being a best seller in the segment for FCA US.

    So why not a third vehicle while Grand Caravan and Pacifica are running. FCA US simply wanted to wait to pay off their debit by 2018 and because Grand Caravan will continue throughout the 2019 model year, 2020 model year will mark the mid-life refresh point for the Pacifica. Perfect time to update the tooling needed for the line and to introduce new features that are being redeveloped for the full-size crossover to go along with it.
     
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  4. redriderbob

    redriderbob Mopar Guru!
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    It is also the same reason for all these confusing launches. Like Wrangler JK staying around for another half a model year. JK being a hot seller and is so cheap to build because the tooling is well paid off that it is tons of profit in the vehicle. JL hasn't even began to pay for its program development and tooling yet, so there is not as much profit in that vehicle. It's simple business.

    Patriot stayed after the launch of Renegade for the sames reasons, as did Compass for 2017 when the new Compass was launched mid-year. It's being done to Dodge Journey as well and is planned for Ram 1500 (DS) models next year after the launch of Ram 1500 (DT) models. It is bringing in tons of cash for FCA US to pay off debt.

    Consumers love it because they are getting a hell of a good value for brand new vehicles (look at the pricing between Grand Caravan and Pacifica for equal content). Of course sales will drop when FCA US stops producing these older vehicles because new vehicles are always more expensive then the ones they replace.

    But as I have said many times before... if you are upset you want to see new product now, then quit buying the old products like Grand Caravan and once sales drop instead of leading the segment they would be forced to bring a new more expensive new product to the market. So the consumer won't get as good of deal but their will be a new product for you all to see! (sarcasm)
     
  5. redriderbob

    redriderbob Mopar Guru!
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    Someone gets it.
     
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  6. JRS200x

    JRS200x CJDR + FIAT SALES PERSON
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    Not sure where you live, but I can tell you that around here in the MABC (Mid-Atlantic), there is no way to get a $40k+ Pacifica below $30k.. not even close. Netting out a Pacifica (invoice - holdback) and using the current incentive of $500 gets you like $3,100 off a $40k Pacifica.

    I am suspecting they are advertising a lease disguised as a sale price or something... or just full of it.
     
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  7. Adventurer55

    Adventurer55 Active Member

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    Since this is purely a numbers game then, would it cost a billion to update Caravan to new standards? Looks to me if profit is above new product then who cares if Chrysler gets a new CUV?
     
  8. redriderbob

    redriderbob Mopar Guru!
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    Many companies have done this in the past... look at the lives of some of our favorite vehicles that were cash cows..

    [​IMG]
    (SJ) lived from 1963 to 1991, thats 28 years.

    [​IMG]
    (XJ) lived from 1984 to 2001 here in North America then when on to live another life in China until 2014! That's 30 years of production.

    [​IMG]
    The Model T ran from 1908 to 1927 not much change. Thats 19 years of production.
     
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  9. redriderbob

    redriderbob Mopar Guru!
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    It's the architecture that doesn't meet regulations, so it's more than just skin deep. But Chrysler getting a CUV is based on the fact of getting a new vehicle to launch for the brand where Dodge Grand Caravan doesnt match the brand's performance lineup direction.
     
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  10. valiant67

    valiant67 Rich Corinthian Leather
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    No one buys "net debt zero" when car shopping. The average car buyer sees fresh, competitive products or older products that they either don't want or will buy with large incentives.

    "But they are reducing fleet sales". Exactly, because that was the easiest place to sell outdated products.
     
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  11. Tomguy

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    Here's one I found on Autotrader:
    New 2017 Chrysler Pacifica Limited For Sale | Horsham PA (at https://www.chapmanchryslerjeeppennsylvania.com/new/Chrysler/2017-Chrysler-Pacifica-8474fde00a0e0a6b13730521a4c1eff0.htm )
     
  12. redriderbob

    redriderbob Mopar Guru!
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    Also look at the recent marketing by Dodge. Notice you might see a Journey in a commercial here or there because of it's AWD capability. But you never see any commercials for the Grand Caravan and it's still the best selling minivan. All the marketing dollars for Grand Caravan have been pushed over to Chrysler Pacifica. Notice you have been seeing new Pacifica commercials non-stop since it's launch and it seems like every two weeks a new line of commercials come out for it. Well that is because FCA US is trying to lure people to the Pacifica to get ready for the elimination of the Grand Caravan in 2019. More awareness to the Pacifica as possible is the plan. But FCA US isn't just trying to foreshadow their new baby by running the old vehicle as well.

    There is a lot of things people don't pay attention to that pay into the "big picture" of everything.
     
  13. Erik Latranyi

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    That is what I said and you went through a whole diatribe that proved me right.

    FCA CHOSE not to do all 3 on the line. There was no obstacle to building the third vehicle on the line created by the Grand Caravan. FCA simply did not want to do it.

    Capacity and capability was there. The will was not there to do it (for whatever reasons).
     
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  14. codypet

    codypet Well-Known Member

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    What the heck? My wife's outback was $30k and much less car than this is.
     
  15. Dave Z

    Dave Z It's me, Dave
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    @redriderbob... excellent summary. Thank you.

    By the way, for those talking about making the Caravan, T&C, and Routan all at once, I just have to point out they were the same freakin’ thing. Different body panels, different suspension tuning, and in later years different interiors, but they were all the same size.

    THey were more flexible making two lengths of minivan plus the old Pacifica.

    Once FCA becomes net-debt-neutral, there will be a flood of new products, just be very scared that they may try to push them out too quickly.
     
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  16. Erik Latranyi

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    Cosidering that all the Pacificas at this dealership seem to have $10K to $15K off sticker price tells me that there is a big push going on from FCA.

    Browsing further, all 300s have about $10K-$11K off.

    Durangos have up to $10K off.

    Lots of incentives being ladled on.
     
  17. Erik Latranyi

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    Holy Crap!

    Cherokee Limited getting $12K off sticker! $38K sticker, $26K selling price.
     
  18. Erik Latranyi

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    Compass getting $8K off sticker

    Renegade Trailhawk at $30K sticker for $18.7K
     
  19. Erik Latranyi

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    @CDJSalesPro

    These guys are fairly close to you, do you guys have deals like this at your store?
     
  20. valiant67

    valiant67 Rich Corinthian Leather
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    I took the Durango in for service today and there were Cherokees all over the lot. Definitely no shortage of them and they were pushing them hard.
     

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