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December from a Chrysler perspective

by Bill Cawthon on

Chrysler Group closed out the year in style, with its 45th consecutive month of year-over-year sales and the news that Fiat SpA would acquire the remaining share of Chrysler from the United Auto Workers retiree healthcare trust.

This news was generally welcomed, but some analysts had to raise their caution flags, mostly due to Fiat’s current problems and a concern about Chrysler’s ability to keep its momentum.

What’s strange is that the same analysts are recommending that investors stock up on GM shares.

Remembering that those who fail history are condemned to repeat it, a comparison of the results posted by Chrysler, Ford and GM over the past four years is warranted. The best way to compare results is to compare sales growth and market share. June 2009 was the first month in which sales results for the new Chrysler Group were reported, which makes it a fair baseline.

Since Chrysler has added Fiat while Ford and GM have shed brands like cats shed fur, it’s only reasonable to compare the brands that have remained constant, i.e., Chrysler, Dodge, Jeep, and Ram for Chrysler Group; Ford and Lincoln for Ford Motor Company; and Buick, Cadillac, Chevrolet, and GMC for General Motors. As can be seen from the figures below, not only has Chrysler’s growth far exceeded growth at either Ford or GM, Chrysler has added market share while the others have lost it. In fact, Chrysler’s market share growth over the past four years has been larger than any other automaker.

Sales Volume Market Share
Company June 2009 Dec. 2013 Change June 2009 Dec. 2013 Change
Chrysler 68,297 157,262 230.3% 8.3% 11.6% +3.3 points
Ford 140,499 216,592 154.2% 17.0% 15.9% -1.1 points
GM 141,668 230,157 162.5% 18.0% 16.9% -1.1 points
Market share figures adjusted for continuing brands

Much of Chrysler’s achievement has been accomplished by simply making inherited products better — by avoiding the bad habits of Chrysler’s previous owners and paying attention to customer perceptions of quality and engineering. There doesn’t seem to be any sign of that trend going away.

As the fine print says on the prospectus, past performance is no guarantee of future results, but Chrysler looks good from this perspective.

There are some actual headwinds out there, however. Growth in the U.S. light vehicle market slowed significantly in 2013, down to 7.5% from double digits in each of the preceding three years. The forces that have driven strong growth since 2009, including pent-up demand, are dissipating. It won’t take much to hit the 16-million-sale mark in 2014 but it will likely take a significant improvement in the economy and consumer outlook to restore the kind of figures seen in the early years of the 21st Century.

Perhaps most important is improving the economic prospects of the millennials. After trying to pass their lack of participation in the new vehicle market off as a preference for electronic socialization, it is finally being admitted that they just don’t have the money. The jobs they should be getting aren’t opening up or no longer exist, and if this remains uncorrected, it could pose serious problems for an auto industry that has its sights set on 20 million annual sales.

December’s comparatively weak performance is being blamed on the weather and an unusually strong November. Perhaps Chrysler customers are made of sterner stuff: Chrysler Group reported the most monthly growth of the Detroit automakers and was second to Ford in annual sales growth.

The Ram pickup had a strong month and year, with the largest gains of any full-size pickup as it cut the gap between it and the Chevy Silverado from 20,488 units in December 2012 to 9,188 units last month. The Ram also had the fourth-highest percentage of sales increase among the 310 light vehicles models reported last Friday.

The Ram ProMaster is ramping up nicely and outsold the Nissan NV and NV200 in December.

We don’t know how much effect it had on Ram sales, but the “Farmer” spot that ran during last year’s Super Bowl went viral and was the fourth-most-watched spot on YouTube.

The new Jeep Cherokee had another banner month, hitting the No. 11 spot among light trucks and the No. 23 spot in the combined rankings. Among Chrysler Group products, only the Grand Cherokee and Ram pickup had more sales in December. Despite a 3.5% shortfall in December, the Grand Cherokee remains a sales powerhouse and the Wrangler is still the leading true SUV on the market. Compass and Patriot sales were up: the Patriot came though with the largest gain of any Jeep model for the month and all of Jeep’s current lines beat their full-year figures from 2012. Jeep brought home the largest sales gain of any major brand in December and was among the top five brands, regardless of size. Jeep also set a second consecutive worldwide sales record for the year.

The excellent new EcoDiesel engine available in the Ram 1500 and Jeep Grand Cherokee was named to Ward’s Top Ten Best Engines for 2014. The new Fiat 500e’s electric drive also made the list.

Honda took the minivan crown in 2013, outselling the second-place Grand Caravan by nearly 5,000 units and the third-place Town & Country by 6,700 units. The Caravan not only had a 20.7% drop in December sales, it was the only one of the four leading minivans to miss its full-year numbers from 2012. Minivan sales were down 4.0% in 2013 but 77.7% of the 22,470-unit decline was due to the Grand Caravan’s 12.3% deficit and the rest was due to the discontinued Volkswagen Routan. Sales of the Nissan Quest, Mazda5 and discontinued Kia Sedona contributed to the shortfall but their volumes were so low the combined total didn’t equal the Grand Caravan deficit.

Chrysler Group cars slumped again in December; the Dodge Charger was the only model to beat its numbers from December 2012. Chrysler 200 and 300 combined to make Chrysler the worst-performing domestic brand for the month and the worst-performing Chrysler Group Brand for the year. The Town & Country minivan was the only Chrysler-badged model to finish both December and 2013 in the black.

While Dodge missed its December 2012 numbers it came through with a healthy gain for the year with only the Avenger and Grand Caravan in the red. Durango sales jumped 42.6% in 2013 thanks to the addition of features like third-row seating.

The Dart has to be a disappointment. Only the Chrysler 300 and Dodge Challenger sold in smaller quantities and it one of the slowest-selling models in a hotly contested segment that accounts for nearly one in four of every passenger car sold. While compacts stumbled in December, full-year growth was still ahead of the total market.

The Dart’s issues have been well-documented and Chrysler has been working to address them. However, the Dart’s pricing remains uncompetitive for online shoppers, especially those looking to lease. Whatever traction Chrysler may have thought the just-under-$16,000-price would gain them doesn’t seem to have translated into an actual advantage, especially now that all trim levels of the Dart’s competition have air-conditioning as standard and Chrysler has raised the price of the package that includes it for the Dart SE.

Compact Segment Sales: December and Calendar Year 2013
Car Dec. 2013 Dec. 2012 Change 2013 2012 Change
Honda Civic 29,000 33,118 -12.4% 336,180 317,909 5.7%
Toyota Corolla 22,562 24,679 -8.6% 302,180 290,947 3.9%
Chevy Cruze 18,162 21,230 -14.5% 248,224 237,758 4.4%
Hyundai Elantra 21,692 19,024 14.0% 247,912 202,034 22.7%
Ford Focus 15,569 22,604 -31.1% 234,570 245,922 -4.6%
VW Jetta 13,719 13,102 4.7% 141,259 146,478 -3.6%
Nissan Sentra 10,799 7,755 39.3% 129,143 106,395 21.4%
Dodge Dart 5,449 6,105 -10.7% 83,388 25,304 229.5%
Kia Forte 4,302 4,276 0.6% 66,146 75,681 -12.6%
Total Sales 141,254 151,893 -7.0% 1,789,002 1,648,428 8.5%

One very positive note for Chrysler’s bottom line is that Ford and General Motors spent more on incentives in December, both as a dollar amount and as a percentage of purchase price. According to estimates provided by TrueCar.com, Chrysler’s average incentive was $2,954 in December, down 9.4% from December 2012 and more than $700 less than the average GM payout.

Comparing rankings from 2012 to last year, more than half of all Chrysler vehicles moved up. The Jeep Cherokee advanced 12 spots from November 2013 to December, moving into the top ten percent, while the Dodge Charger moved up 15 spots from November and 12 spots from December 2012. While its monthly performance was up-and-down, the Dodge Durango advanced 19 spots in the annual rankings.

CHRYSLER VEHICLE RANKING BY SALES VOLUME
Vehicle Dec 2013 Nov 2013 Dec 2012   All 2013 All 2012
Ram Pickup 3 4 5 5 7
Jeep Grand Cherokee 18 19 19 22 23
Jeep Cherokee 23 35 N/A 128 N/A
Jeep Wrangler 33 29 32 27 27
Dodge Grand Caravan 34 38 23 34 28
Dodge Charger 40 55 52 50 53
Chrysler Town & Country 41 32 44 37 42
Dodge Journey 56 74 55 58 57
Jeep Patriot 68 75 83 66 68
Chrysler 200 72 68 46 36 32
Dodge Dart 74 59 66 60 124
Dodge Durango 77 69 77 74 93
Dodge Avenger 80 78 59 52 48
Chrysler 300 81 92 62 77 64
Jeep Compass 102 99 108 84 96
Dodge Challenger 115 114 94 86 90
Fiat 500 132 127 98 107 88
Ram ProMaster 143 185 N/A 239 N/A
Fiat 500L 162 182 N/A 204 N/A
Ram Cargo van 202 187 203 194 215
SRT Viper 260 259 N/A 270 289
Manufacturers reported sales for 310 light vehicle models in December

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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