StaffAllpar HomeMore NewsCarsTrucksUpcomingRepairsTest drives

FCA profits as buyers drop sedans

by David Zatz on

Analysis. Two years ago, FCA US had a problem: they needed more factory space for their SUVs, and some of their most important plants were outdated and unfit for their current duties. Meanwhile, their front wheel drive sedans were struggling to find buyers.

Sergio Marchionne set into motion an ambitious “musical factories” plan. The Dart and 200 were dropped so their factories could be converted to Cherokee and Ram production. When the Cherokee moved out of Toledo, that plant would be refitted to make Wranglers; and the old truck plant would be renovated and make specialty trucks and overflow. The alternative was building new plants, or rebuilding abandoned sites.

It seems that the plan took hold just in time: sedan sales plummeted at competitors, causing consternation and hurting profits. Meanwhile, though FCA sales took a hit from the lack of compact and midsize sedans, more of the remaining sales were profitable SUVs and pickups.

In short, while FCA US raised its incentives and saw fewer sales in the first quarter of 2017 than in the first quarter of 2016, they sold a more profitable vehicle line.

Back in the mid-1990s, Chrysler was in a mildly similar situation. Replacing their cut-price Sundance/Shadow and Spirit/Acclaim with new Neons and “cloud cars” resulted in lost sales, but each sale was profitable — and the company made billions of dollars, when it had been in danger of failure. Then, too, the quality of sales proved to be more important than the quantity.

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


Tornado following the Hurricane?
rff 2019 ram 1500
See the clear, sharp 2019 Ram video; no crosshairs?
2018 jeep compass gauges
Oops: Compass “bright dash” recall

More Mopar Car
and Truck News

Some popular Allpar pages





Dodge Demon

2018 Wrangler JL



Staff details/contactsTerms of ServiceInformation is presented to the best of our knowledge. Plans change and sometimes mistakes are made. Decisions or purchases made based on this site's verbiage or images are done at the reader's own risk. Also see the Allpar News archives, 1997-2008 • Copyright © 2008-2017, Allpar LLC. All rights reserved. • Mopar, Dodge, Jeep, Chrysler, HEMI, and certain other names are trademarks of Fiat Chrysler Automobiles.