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NAFTA: Dodge shrinking, C/J/R growing

by David Zatz on

Sergio Marchionne talked about FCA’s operations in North America, where the company now has 71,100 employees — quite a few more than in 2009, when there were just 46,000. The largest gain is, not surprisingly, in manufacturing — from 33,100 to 51,800 — but each segment has seen increases.

The company has invested around $4 billion in North American assembly plants over the last five years, with shifts and capacity increasing in six of them. Another $4 billion was put into powertrain plants, with Mack Avenue rescued from a planned shutdown.  Utilization was at 109% in 2013, and is planned to be at or above that level through 2008. (This is based on Harbour standards.)

While many Chrysler and Fiat projections are aggressive, Mr. Marchionne pointed out that the 2009 plan was hit nearly dead-on. He predicted 1.2 million sales in 2009, which were delivered; and 2.1 million sales in 2013, which the company also reached. At the time, many reporters believed the numbers for 2013 to be unrealistically high.  Each Chrysler brand grew.

The company plans to deal with sales growth both by raising production and by importing from other regions — with domestic production see as going from (2013 to 2018) 2.1 to 2.6 million units, and imports going from 32,000 to 360,000. Exports are also projected to increase, from 253,000 in 2013 to 380,000 in 2018.

Chrysler gained the most retail share of any major automaker in the US, at 3.3 points, followed distantly by Subaru (0.5), Hyundai-Kia (0.4), and Audi (0.3); all others lost share, with Honda and Toyota losing the most (1.3 and 1.4 points, respectively).

In the US, going through the end of April, Chrysler gained even more, thanks to a surge in Ram sales — 4.4 points; in Canada, 5.1 points. In retail, the gains were even stronger, with Chrysler share rising by 6.5 points in the US. In Mexico, the story was different, with total share dropping from 11.4% to 7.2%, as an alliance with Hyundai was dropped and low-margin cars were taken out. (Other sources claim ill-advised sales of a variety of models, including Patriot, to the police reduced retail demand, as well.) Replacements for the Hyundais are in the plan.

Mr. Marchionne said the ideal was to have fleet sales at 20%; they were at 36% in 2010, and at 22% in 2013. Chrysler residual values have increased by nine points since 2009, versus an industry average increase of six points.

Goals are:

  • Strengthen offerings in compact and mid-size car segments
  • Renew aged products using modern architectures
  • Regain minivan leadership
  • Extend Ram market coverage
  • Continued renewal of powertrains
  • Consistent product cadence

The plan assumes that North American annual sales (across all brands) will stay stable, at a total of 19-20 million vehicles per year. Sales of Chrysler and Fiat brands are to go from 2.1 million in 2013 to 2.9 million in 2018, plus 150,000 Alfa Romeos.

The company is predicting that Jeep, Ram, Chrysler, and Fiat will all grow by 2018 — but that Dodge will, as a result of its new focus, actually sell fewer vehicles, dropping 10% from 736,000 to 660,000. Jeep is to rise by 44%, to 800,000; Ram by 34%, to 620,000; Chrysler by 132%, from 332,000 to 770,000; and Fiat by 67%, to 100,000.

Even after shrinking, Dodge is still predicted to out-sell Ram, and to sell twice as many vehicles in 2018 as Chrysler brand does today.

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