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Sales, plants, and the future

by David Zatz on

The November sales drop, coming at the same time as incentive increases, can be troubling, but it was also predictable. Even though other automakers gained while FCA US lost, the month’s drop was largely caused by company strategies and plans.

All-new 2013 Dodge Dart

First, there was the Dodge Dart. It was rushed into production in typical Chrysler fashion — some say to give Fiat a bunch of Chrysler shares, but that wasn’t really an urgent need. Most likely, Sergio Marchionne pushed it forward as quickly as possible to demonstrate what Fiat was bringing to the table. His position all along was that Fiat and Chrysler needed each other, and had to join together and work as one. To do that, he had to show Fiat that they needed Chrysler — notice all those new Maseratis? — and show Chrysler that they needed Fiat.

Some sources claimed that a second generation Dart was nearing completion when the car was dropped entirely. The reasons for dropping it aren’t completely clear, but chances are it had higher than expected warranty costs, and was done in by the lack of factory capacity, FCA capital, and the failure of the small sedan market.

2016 Chrysler 200

In short, there were precious few Darts sold by dealers. The same goes for the 200, which, I suspect, was completely revamped for much the same reason as the Dart was produced. In the end, Chrysler gained a car that handled much better, was much more modern, and was a little more efficient, but gave up some comfort, cost advantage, and ease of rear-seat entry. It turned out to be a poor tradeoff for the company. Hence, the 200 barely moved, except when pushed by high incentives; and it too was marked to be cut, for much the same reasons as the Dart. The factory space is desired for greater SUV and crossover production, and the money is needed for crossovers, trucks, worldwide expansion, and the complete rebuilding of Alfa Romeo and Dodge.

us-sales

What about the rest? The minivans both dropped, quite a bit; then again, so did the Toyota Sienna (by 8%) and Honda Odyssey (by 12%). Of course Caravan dropped by 39% and Pacifica came in similarly short of Town & Country, to the point that Sienna is now the #1 minivan, followed by Pacifica, Odyssey, and finally Caravan.  The Pacifica doesn’t seem to be taking off, but the hybrid might attract enough favorable press to turn that around.

The 200, Dart, and minivans accounted for 19,916 vehicles, out of a 26,904 unit shortfall.

The future will likely see FCA US sales slipping again; Sergio Marchionne warned the world that was coming months ago. Plants are being moved, priorities changed. In theory, once new cars are in place, the company should start to regain ground — if not in sales volume, then in profits. There are dangers ahead, especially as every mainstream and luxury automaker plunges into Jeep’s SUV-and-crossover turf, and pickup competition intensifies.

David Zatz founded Allpar in 1998 (based on a site he had begun in 1993-94), after years of writing reviews for retail trades. He has been quoted by the New York Times, the Daily Telegraph, the Detroit News, and USA Today. Before making Allpar a full-time career, he was a consultant in organizational psychology. You can reach him by using our contact form (much preferred) or by calling (313) 766-2304


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