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Branding, Retail, Revenue Growth

Chrysler On A Roll With 23rd Monthly Gain


by Karl Greenberg,

Either Chrysler is on a roll, or the automaker is under some benevolent spell cast by the company’s philosophical, smoke-wreathed CEO, Sergio Marchionne. Well, whatever they’re smoking in Auburn Hills, Mich., it seems to be working. The automaker has posted its 23rd month of consecutive sales gains.

Of course, it helps that parent Fiat S.p.A. has been actually working on making Chrysler a competitive automaker by putting hard cash behind product development and vehicle-desirability investments. Those are basic tenets of product marketing, but they can go by the board when a venture capital firm (and other peoples’ money) is involved. And experiments like DaimlerChrysler notwithstanding, it really does help if an automaker is run by an automaker.

Chrysler, which has a couple of highly anticipated vehicles on tap this year, like the Dodge Dart and the SVT Viper, said that February was also the ninth consecutive month of sales gains that topped 20%. All of the automaker’s homegrown brands — Chrysler, Jeep, Dodge and Ram Truck — saw sales gains. And the U.S. arm of the sibling Fiat brand, which sells the Fiat 500 stateside, posted a 69% increase in February versus the previous month.

The Chrysler brand, which benefitted from a big marketing push in 2011, saw sales increase 114%, which the automaker said was the highest-percentage sales increase of all Chrysler Group brands and the best February in four years. The Chrysler 300 and 200 sedans each posted ridiculous triple-digit year-over-year sales gains of 480% and Jeep was up 30% — the best February in five years — with all Jeep brand models posting double-digit percentage gains. Ram truck, which launched a test-drive experience at the Chicago auto show, saw sales increase 21% last month. All six Dodge models in production posted double-digit sales gains.

Chrysler LLC also happened to have the highest overall incentive spend last month, per TrueCar, which also says that if SAAR hits 14.4 million in February, it would be the highest since March 2008.

Per the auto shopping and research site, Chrysler’s February incentive spend was around $3,251, up 6.5% versus last year and well above the industry average for February of $2,468.

Jesse Toprak, head of industry analysis at TrueCar, however, says that incentives don’t really explain Chrysler’s resurgence. “Their product portfolio is the best they have ever had,” he says. “And they have compelling smaller cars in the lineup, even though they lack a true subcompact versus the competition. But we have to give them credit for vehicles like the Chrysler 200 and 300, and the entire Jeep lineup, and Ram. They have enjoyed retail demand growth in the market. Yes, incentive spend is higher, but it’s not crazy.”

Toprak says the gap between Chrysler and GM, back when Chrysler routinely put $4,000 on the hood, used to be a lot bigger. “Also, the incentives aren’t all cash; it’s also subsidizing leases, and finance deals. There’s a lot of ‘assumed expenditures.’ When you lease vehicles, there are lots of assumptions you make around subsidizing, but it’s not cash out of pocket.”

In terms of fielding smaller vehicles, the company’s Fiat’s 500 accounted for around 3,200 units last month. “The Jeep Compass is also pretty decent now. And they are still selling [Dodge] Calibers.”

The game-changer will be Dodge Dart [due later this year], argues Toprak. “From the standpoint of commercial potential success, it was the most significant introduction at the Detroit Auto Show.”

via MediaPost Publications Chrysler On A Roll With 23rd Monthly Gain 03/02/2012.

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About Bob Innes

Who am I and what I do best! I am a skilled Sales and Marketing team player known for performing behind the scenes miracles that increase base distribution, improve customer relationship management, exceed annual sales volume,and profitability for Consumer Packaged Goods companies. And I've been doing it for over 15 years. My successful contributions include such clients as Kraft Foods, Mars, Bumble Bee Foods, Unilever, Johnson and Johnson and SC Johnson, and JM Smuckers.

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