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July from a Chrysler Perspective

by Bill Cawthon on

Chrysler-Perspectives-3-Web

The bad news is in: Chrysler dropped to fifth in the July volume rankings. Thanks to drooping passenger car sales on the Chrysler side and soaring light truck and Civic sales on the Honda side, the second-largest Japanese automaker came in with 1,337 more sales for the month.

The minivan situation is getting worse, as well. The Dodge Grand Caravan is third in the segment in both July and year-to-date sales; the Town & Country is fourth. And the margin isn’t small: the segment-leading Odyssey outsold the Grand Caravan by 4,678 units in July and has an 11,678-unit lead for the first seven months of 2013.

Of course, the world isn’t ending: Chrysler is still 161,417 calendar-year sales ahead of Honda through the end of July.

What happened was Honda had a banner month in light truck sales, up 26.6% from last year, and saw a 16.4% increase in car sales, including a 29.6% increase in Civic deliveries, adding 24,495 sales to its July 2012 numbers while Chrysler truck sales grew by 10.2% and passenger car sales grew by 13.7% for an increase of 14,013 units. The Civic alone accounted for an extra 7,412 sales last month.

While it would have been difficult to predict Honda’s surge, it should have been easy to predict Chrysler’s relative slump. Sales of Chrysler’s bread-and-butter sedans, the Chrysler 200 and Dodge Avenger, have tanked every July since at least 2010. Perhaps the fleet buyers are on vacation or there’s some other factor at work, but the pattern is there and this year the shortfall in 200 sales wiped out the gain in Avenger sales to produce a 1.5% deficit for the class compared to July 2012.

Compounding the fall was the Charger, which posted a 19.3% drop from July 2012 and 47.0% decline in sales from June 2013, the model’s steepest month-over-month plunge in more than two years. It’s still 9.5% ahead of the January-July period of 2012, but it’s worth watching: the Charger seems to get tripped up in October, too.

While there was an increase in year-over-year sales, deliveries of the Chrysler 300 continue to slow, as they have since last year. Chrysler has sold just three-quarters as many of its flagship through July as it did in the first seven months of 2012.

In the chart below, sales of the five Chrysler Group sedans are tracked from June 2011 to the end of last month. The bold green line represents the total sales of Chrysler sedans and is not to scale; it’s there to show the overall monthly changes in volume in order to compare it to the individual models.

Chrysler-Sedans-0713-Web

For all of the improvements that have been made, the Charger and Chrysler 300 are going on their ninth year with what carbuyers see as essentially the same exterior design. Most of the competing models have been visually updated in that time, including the striking new Chevrolet Impala. There are superb new powertrains under the hoods of the 300 and Charger; it’s time to update the hoods, too.

In fact, all of Chrysler’s mature sedan lines are in need of a major refresh in order to remain competitive. Perhaps Sergio Marchionne might want to consider using some of the money he is raising to buy out the UAW VEBA’s stake on product development. Chrysler is currently the cash cow but cash cows stop giving milk if they aren’t fed properly.

On the bright side, if the trend holds true, next month should be better; the August rebound for Chrysler sedans is typically in the 30% range.

The Jeep Cherokee can’t hit dealer lots fast enough. The discontinued Liberty was a major drag on Chrysler’s July results. Factoring out the Liberty, Chrysler’s July growth would have been a Detroit-leading 19.0% instead of the actual 11.1% that left it behind Ford and GM.

On the other hand, the Jeep Grand Cherokee continues to deliver outstanding results; it outsold the Ford Explorer for a second consecutive month and this month it was joined by the Wrangler. Out of all the SUVs and crossovers on the market, only the Honda CR-V, Ford Escape, Toyota RAV4 and Nissan Rogue outsold the Jeeps in July and they’re all compacts.

The Dodge Durango is another bright spot; from near-oblivion not too long ago, sales soared 87.7% in July, one of the largest improvements in the industry. Dodge’s larger SUV is now 38.3% ahead on the year.

The Ram’s superior towing capacity seems to work on numbers, too; it’s definitely pulling some good ones. This year, Ram sales have grown faster than any full-size pickup except the Chevy Silverado. While the Ram’s performance is great, what makes it even better is the fact that both Ford and GM are more dependent on pickup sales than Chrysler. The Ram accounts for 19.2% of Chrysler sales while the Silverado and Sierra make up 23.5% of total General Motors sales. The F-Series pickup is almost Ford’s lifeline, bringing in 28.9% of combined Ford and Lincoln sales.

The new Fiat 500L seems to be off to a good start. Unfortunately, it seems to be at the expense of the Cinquecento. Total Fiat sales grew just 2.0% in July and the 500L took 25.4% of them. Let’s hope the future brings more conquest and less cannibalism. Fiat still matches up well with BMW’s MINI brand, which is becoming so fragmented, many of the models don’t sell a thousand copies a month.

While Chrysler’s overall sales gain in August likely won’t be as dramatic as the rebound in sedan sales, it should be enough for a 41st month of improved sales. It might be tight for Chrysler getting back to fourth place in the pecking order next month, but the folks in Auburn Hills should be there by the end of September.

CHRYSLER GROUP LIGHT VEHICLE SALES RANKINGS*
MONTH OF   YEAR-TO-DATE THROUGH
Jul-13 Jun-13 Jul-12 Brand & Model   Jul-13 Jun-13 Jun-12 Brand & Model
6 7 7 Ram Pickup 5 5 9 Ram Pickup
21 21 25 Jeep Grand Cherokee 25 26 23 Jeep Grand Cherokee
22 23 23 Jeep Wrangler 28 28 27 Jeep Wrangler
45 42 39 Dodge Grand Caravan 29 29 29 Chrysler 200
48 31 37 Chrysler 200 39 40 30 Dodge Grand Caravan
49 40 44 Chrysler Town & Country 40 41 39 Chrysler Town & Country
56 65 61 Jeep Patriot 41 39 45 Dodge Avenger
62 69 53 Dodge Journey 51 47 52 Dodge Charger
65 59 69 Dodge Avenger 56 56 252 Dodge Dart
67 68 183 Dodge Dart 59 59 61 Dodge Journey
76 78 83 Jeep Compass 67 66 68 Jeep Patriot
77 45 56 Dodge Charger 75 73 85 Dodge Challenger
78 80 105 Dodge Durango 77 77 93 Dodge Durango
84 76 93 Dodge Challenger 78 75 60 Chrysler 300
90 84 95 Chrysler 300 79 79 90 Jeep Compass
111 87 91 Fiat 500 97 95 91 Fiat 500
174 N/A N/A Fiat 500L 184 170 55 Jeep Liberty
190 161 205 Ram Cargo Van 189 187 208 Ram Cargo Van
255 251 N/A SRT Viper 240 N/A N/A Fiat 500L
259 252 45 Jeep Liberty 267 266 283 SRT Viper
*In July, manufacturers reported sales for 288 light vehicle models. Models with no 2013 sales have been omitted.

Bill Cawthon grew up in the auto industry in the 1950s. His Dad worked for Chrysler and Bill spent a number of Saturdays down on the plant floor at Dodge Main in Hamtramck. Bill is also the U.S. market correspondent for just-auto.com, a British auto industry publication, and a member of the Texas Auto Writers Association, which has named the Jeep Grand Cherokee the “SUV of Texas” several times and named the Ram 1500 as the “Truck of Texas” two years running.

Bill has owned five Plymouths (including the only 1962 “Texan”), one Dodge and one Chrysler and is still trying to figure out how to justify a Wrangler. He also has owned at least one of every 1:87 scale model of a Chrysler product. You can reach him directly at (206) 888-7324 or by using the form.


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