Category Archives: Chrysler Group

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Venezuela: a rebadged Fiat could see the light

This is how the rebadged Fiat Siena could look in Venezuela under Dodge brand. Illustration by Autosblog.com.ar

According to Chrysler executives in Venezuela, the company is getting prepared for a ‘new’ B-Segment car. Human Resources director for Chrysler Venezuela, Mr. Wilfredo Trejo, said the company has already invested $47 million to adapt their factory to the production of the new model. The car, that may be called Dodge Forza, will be available from the beginning of 2013 but is not clear if it will be available outside Venezuela. Based on information from that country and Argentina, the Forza will be based completely in the first generation Fiat Siena, still available in South America. Both brands, Chrysler and Fiat, have always had an important market share in Venezuela. Last year Chrysler 9.245 passenger cars, from which 4.692 were Jeep Grand Cherokee, 2.926 Jeep Cherokee and 1.807 Dodge Caliber. Fiat, which used to be one of top 3 best-selling car makers, sold 1.281 Siena and 318 Palio*. The brand was severely affected by restrictions on imports, but the Argentinean Siena was selected as one of the models to be directly imported by the government. Chrysler has an assembly plant in Valencia and makes the Grand Cherokee, Cherokee, and Caliber, while Fiat closed its plant in late 1990’s as Brazilian product was more competitive. In 2011 more than 105.000 passenger cars were sold in Venezuela, from which 37% were ‘B-Segment’ cars, 21,5% ‘C-Segment’ and 19% were all types of pickups. The market reached its top in 2007 when more than 492.000 new cars were sold.

Source: Guia Motor Venezuela

* FGW Data basis

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Fiat-Chrysler to exploit the small platform

Photo by 500blog.blogspot.com

The platform Fiat uses for its Punto and MiTo will soon be available in much more models. The idea is to build future larger cars such as minivans and SUV, for many brands of the group. The first model to use it is the ‘B-MPV’ Fiat 500L which goes on sale in Europe this month and in the US market next year, all of them built in Serbia. But Fiat wants more and is expected that a small SUV under Fiat and Jeep brands will use it too. It is unclear if next generation Jeep Compass/Patriot, which belong to ‘C-SUV’ segment, will use this platform as it can be enlarged up to 4.4 meters in length and can be equipped with petrol engines up to 2.4 liters. Fiat calls this platform the ‘Small’ one, while the CUSW platform is the one for larger models such as the Alfa Romeo Giulietta that is the base for Dodge Dart/Fiat Viaggio, and may be the same base for future Chrysler 200 to be presented in Detroit 2013.

The idea with the use of the ‘Small’ platform is to offer several models from a unique base so Fiat can save money building the cars wherever they need to. It is also part of Fiat plans in Italy after the meeting Sergio Marchionne and John Elkann had with Italian government. The main conclusion after the meeting is that Fiat and the government will look for solutions to enhance local production more focused on exports to American market. Obviously it means that they will have to work hard on more competitive models so they can some success in that difficult market. Marchionne asked for government financial help as it happens in Brazil with their new factory in Pernambuco. The hard thing is whether Italian government can do it when it is facing so many problems with the debt. If it is just a matter of getting lower interest rates for loans it is certainly a good move, but if Fiat wants the government to be an active part of the solution, personally I think it will not solve anything at the end. If there is any company that always depends on public help when things don’t work, it means that something does not work, and public intervention means less independence and more problems with unions.

Source: Automotive News Europe

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Chrysler grows less than American market in August

Good news for Chrysler and American car market. August was again a good month for Chrysler Group sales figures which went up 14% thanks to great results of Chrysler brand. However Chrysler’s results are not as good as total markets’. American car market was up 20% and confirms the good trend it has had in the last months. According to some analysts the good result was led by Honda, VW Group and Toyota, followed by double-digit sales gains by GM, Ford and Chrysler. One year ago the seasonally adjusted sales was 12.5 million units (August 2010 – August 2011) and this year it was 14.53 million (August 2011 – August 2012). Year-to-date numbers indicate that the market has grown 14.7%, which could be considered the best growth among developed countries. There is no doubt that American car market is recovering from the dark years it had during the financial crisis, the opposite of what is happening in Europe nowadays.

Source: Good Car Bad Car

In that great context Chrysler Group plus Fiat occupies fourth place in the ranking of cars sold. In August the whole group sold 148.472 units, up 14%, or 18.300 more cars than one year ago. That result is better than the whole year’s average of 138.579 and is the third best of the year in terms of units. However as it was said before the good result of Chrysler was exceeded by total market’s, so in terms of growth August was the second worst after July when Chrysler Group sales figure were up only 12.6%. That growth is practically the same Dodge/Ram brands had together and is more than Jeep’s which was up only 5.5%. In the other hand Chrysler brand was up 24.8% and Fiat sold a new record of 4.150 units, up 33.6%. Dodge/Ram represents half of total sales. Compared to other car makers, Chrysler did worse than Honda  division (+60%), Toyota (+46%) and VW Group (+48%), but better than Ford (+13%) and GM (+10%).

Though there is a good result in August 2012, sales figures are still far from pre-crisis numbers. Source: http://www.carsitaly.net

Unlike sales figures, market share shows that Chrysler is growing up faster than total market. Source: http://www.carsitaly.net

The Ram is up 19% while the Caravan had a great performance, up 35%. Among Dodge models the new Dart took off with more than 3 thousand units, which is far from the target but is a result that Marchionne liked. The Journey had the best performance, up a massive 58%. The Chrysler 200 slowed down but the 300 grew up 65%. The Jeep Grand Cherokee seems to reach its top with almost 13.000 units sold. Now Chrysler needs more fresh products and new midsize SUV if it wants to keep its good performance.

Source: http://www.carsitaly.net, Good Car Bad Car

 

Click here to see USA September 2012 Results

Click here to see USA July 2012 Results

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July/12, the lowest growth for Chrysler so far

July was a good month for Chrysler in USA. But not as good as before. For the first time of this year the sales of the group grew below 20% and its market share was below 11%. Jeep, Chrysler, Dodge, Ram and Fiat sold 126.089 cars, up 12.6%, which allowed them to have a market share of 10.9%. The growth was less than 20% of June and even worse than 44% of January. However the growth was better than total market performance, 8.9%. Only Jeep grew up less than that number, 7.4%, while Chrysler was again the best brand up a massive 34.8% thanks to the great performance of Chrysler 200 and 300, both with enormous success in some states of the country. July was also a regular month for the Fiat 500, which was up ‘only’ 22%. Year-to-date numbers indicate that the whole group is doing very well. All brands sales are up 2 times what the whole market has grown, 27.7% against 14%. It means they have been able to reach a market share above 11%, just like it was when the financial crisis began 3 years ago. Its growth is much more than all main competitors: GM 3%, Ford 5%, and the same of Toyota, still in third place with total sales growth of 28%. By models, all of them had a good performance, far away from total market’s growth. And it seems the Fiat 500 will reach the initial goal settled by Mr. Marchionne, who said they could sell 50.000 units per year just in North America, but then, after some bad months, he said he was wrong with that number, to optimistic. If that trend continues, the small Fiat will sell more than 42.000 units in USA and more than 10.000 in Canada. The Abarth version has made a great job.

During July only Jeep had a lower sales growth than total market. Source: http://www.carsitaly.net

Source: http://www.carsitaly.net

 

Click here to see USA August 2012 Results

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Fiat-Chrysler 2012 First half results analysis

After some days waiting for official data now is possible to have a close analysis to Fiat-Chrysler sales figures in the main markets and most important models. The overall result could be considered more or less good though the troubled European market may change that at the end of the year. The whole group has sold around 1.8 million cars* in the first six months of 2012, up 5.7%, which is not considered bad in current conditions, especially taking into account that Italy counts for 13% of total sales and is a market that dropped 20%. It all means that the small growth in units sold is due to the great success most of Chrysler Group models are having in the US and Canada. Brazil would not be included in the list of good results as Fiat brand slow down its growth following the total market (-0.3%). The analysis by models shows two different worlds: Europe with terrible results for old products, and USA for good results for most of all the models, no matter the fact they are mostly old models.

ITALY

Italy is Fiat’s main problem nowadays. The dependence of the group is evident and therefore total sales and practically all models are having very bad results. What used to be Fiat’s best selling car now occupies a second place and is severely affecting the whole company. The Punto, which counts for almost 23% of the group sales and drops 32%, much more than the market, and than its rivals. The ‘restyling’ gotten at the beginning of the year has not had any effect because consumers of B-Segment seem to prefer the new generation of Toyota Yaris (a fall of just 5.5%) or the new Peugeot 208 (4200 units). Then comes the Fiat 500 that falls even more due perhaps to the fact that is now facing its 5th year on the market without any significant change (see analysis of Fiat 500-Panda vs. VW Up! for June 2012). These two models count for 76% of main models fall. But in terms of percentage fall, the winner is the C-Compact Bravo with a spectacular fall of 47%, or 6.063 units less. This car is not old at all but the positioning given by the brand has not been the best allowing the VW Golf to keep its pole position among C-Segment cars. Nevertheless the german compact begins to suffer the consequences of its old age which can be seen by the good result gotten by the Giulietta (the best selling compact in April, May and June), which ‘only’ falls 18%, but is an alarm sign to Alfa as it is the only competitive product and is just 2 years old. Other really bad performers are Alfa MiTo, which just sold 16% more than Mini and 20% more than Audi A1, and Lancia Delta, down 36%. In a market that falled 20%, the Panda, Ypsilon and Freemont did quite well. The new generation Panda helped this popular model to maintain its sales figures and allowed it to become the country’s best selling car by far. Same situation for the Ypsilon, very popular in Turin. Fiat as a brand falled as much as the market, while Lancia did better only falling 11% and Alfa Romeo dropped 31%.

Total sales of B segment main models in Italy. The latest launches had the best performance, while those with more years in the market dropped their sales. Source: http://www.bestsellingcarsblog.net

Although Giulietta’s sales have fallen in Italy during the first half, it was Italy’s best selling compact car (C-Segment) in May and June. Very bad results for the Fiat Bravo. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

Thanks to new Panda, Ypsilon and somehow the Giulietta and Freemont, Fiat Group has been able to rise its market share in Italy. The evolution of each model is compared to the performance of each segment according to UNRAE. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

Fiat Group’s model composition in Italy during the first half of 2012. Source: http://www.bestsellingcarsblog.net and http://www.unrae.it

USA

As usual, American sales figures are just amazing. The total market has returned to pre crisis numbers but Chrysler Group is doing much better, eventhough the new entry model, Dodge Dart, is available from late June. The Ram grew 24%, much more than its rivals, thanks to the good results got by the luxury versions. If rumors are confirmed, a diesel version would have a positive impact for the rest of the year. But in terms of the largest impact on the total growth on sales, the Chrysler 200 is certainly the main character, because it represented 16% of total growth, or 37.000 more cars. The deep facelift that received the Chrysler Sebring has made consumers to come back to Chrysler in the C-Segment. Besides the good Ad campaign regarding its American origin has given it more awareness among consumers. With less sales figures but equal interesting results, the Chrysler 300 took off, up an amazing 200% (anyway it is still far away from its rivals, most of them already renewed). As most of models had great performances (thanks to better economic situation), only those having bad results deserved a close analysis: the old couple Compass/Patriot did not well during the period. The Compass falled 1%, while the Patriot grew 12%, below total market. It is clear that these models are old enough and competition gets really hard with all new models, but it is weird that the Compass and not the Patriot falled when the only the first one had an interesting restyling. Another fact to consider is that minivans don’t count in Chrysler’s sales as much as they did one year ago, and now Jeep Grand Cherokee and Wrangler occupied the second and third place of best selling Chrysler models. The group, included Fiat sales numbers, grew up two times more than total markets allowing it to increase its market share up to 11.5%. By brands only Dodge/Ram had stable growth, while Chrysler had an amazing growth of 75%, Jeep up 28% and the Fiat 500, up 319% to 20.706 cars, more than the whole year 2011.

The Fiat 500 had the best performance compared to H1 2011. Anyway most models did better than the whole market. It is weird what happened to Dodge Durango which has been on sale for less than 2 years, shares platform and components with the successful Jeep Grand Cherokee. Source: http://www.goodcarbadcar.net

The figure shows the total units sold during the first half and then the change in terms of percentage and units. After that there is the contribution of each model to total growth in terms of units. Chrysler models are the ones which contributed the most for the total growth. Source: http://www.goodcarbadcar.net

EUROPE

Outside Italy the situation is really bad. Without taking into account UK and Austria figures (only Czech Rep., Denmark, France, Germany, Greece, Ireland, Netherlands, Poland, Slovakia, Slovenia, Spain, Sweden and Switzerland), the main models of the group sold 115.275 units, down 17.5%, a bit less than what happened in Italy. Of course not all the markets had the same performance as the largest ones had the deepest fall: France down 25%, and Germany down 13%, compared to a total fall in France of 14% while Germany grew 0.7% (part of that growth due to self-sales). But the top 9 models had the worst fall in Greece, a market that dropped 41% in the first half. Spain, other troubled market, surprisingly was good for these models, which grew up 4%, or 500 more units. Once again the Fiat Bravo got the worst figures falling in all markets as a response to Fiat’s decision of reducing the range and options. Germany has been the largest market for the Punto after Italy, but this year the model has fallen 48% over there, even more than the fall seen in Greece, but less than the horrible result in Spain and the Netherlands. Certainly the model is not anymore popular. The Panda had good and bad results but in general the car continues to be popular, though its total result was severely affected by the deep fall in France, where the market is going bad. As in Italy Lancia goes better thanks to the Ypsilon, which had excellent numbers in terms of growth but still low numbers in terms of units delivered. One year ago the old model barely sold one thousand units but with the arrival of the new 5 door generation the Lancia sold 4 times more, and is especially popular in Greece where it has become one of top 20. Alfa Romeo does not do good at all with its 2 models falling in the ranking, especially the MiTo, which never had good results. In terms of the dependence of the models on the Italian market the situation changes a lot according to the car. Without any doubt the Fiat 500 is the most international model of the group as only 34% of its sales are done in Italy. Surprisingly the Alfa MiTo is the next model to have less sales share in Italy, as 52% of them are done outside Italy. It is certainly interesting to see the result of the MiTo taking into account that the Giulietta is more popular. The Lancias continue to be popular only in Italy and it seems the new generation Ypsilon will depend on Italian market no matter the fact is built in Poland.

This figure shows the Export ratio of Fiat Group’s main models in Europe. The Fiat 500 is the one less dependant on Italian market thanks to great sales in the UK, France and Germany. On the other hand there is the Lancia Ypsilon, whose new generation has not been able to change its strong dependance on Italy. Europe includes: CZ, DK, F, D, GR, IR, NL, PL, SK, SL, E, S, Switzerland and the UK. Source: www.bestsellingcarsblog.net

Sales growth of each model in each market for the first half of 2012. Good results for the Ypsilon, Freemont and 500. To bad for the Punto, Bravo and MiTo. Source: http://www.bestsellingcarsblog.net

One year ago the Punto was Fiat’s best selling car outside Italy (28% of total sales). In 2012 H1 the fall of its sales allowed the Panda, 500 and Ypsilon to have better share among Fiat models. Source: http://www.bestsellingcarsblog.net

BRAZIL

In Brazil the analysis gets larger as more models are really popular over there. The market is stable with a tiny fall of 0.3% and is expected more sales in the second half thanks to some incentives given by the government. In this context Fiat continues to be the leader and keeps its market share above 22% thanks to one single model, the new Palio. Its registrations have risen 63% and is now the third bestselling car of that country, but it is still far behind from the king of the market, the VW Gol. Although year-to-date numbers are still low, the arrival of the new Siena, aka Grand Siena, has made of this model another great performer and the results will be seen at the end of the year. The Uno, in its second year, falls 11% partly because of the arrival of the new Palio, which could be catching some of its sales (Palio is B-Segment and Uno is A-Segment, but they are close in size and prices), and also because of the success the facelifted VW Fox is having (up 19%), also from A-Segment. But the worse comes from C-Segment: the Linea falls 36% and it seems it will continue like that until a deep facelift arrives. The Bravo stopped its fall in the last month thanks to new engines and features. Good for the Punto (-2%) which got its first deep facelift in July/12, and the Freemont, with 1 thousand units sold per month, not bad considering its high price. The small 500 is doing also good allowing the Toluca plant to keep working. For the second semester things will get hard for Fiat with the arrival of the facelift of VW Gol/Voyage and the all new Hyundai HB20, exclusively designed for Brazilian market.

The new Fiat Palio has had a great start. The new Siena will also change total year’s result. Source: http://www.bestsellingcarsblog.net

CANADA & ARGENTINA

The situation in Canada is not as spectacular as in USA. Chrysler group (included Fiat 500 figures), had the same growth of total market, but it is much more than its competitors from Ford and GM. Actually the group has the second place and sells more than GM, but is now facing the threat of a strong Toyota in fourth place and growing much more. Fiat sold 4.920 cars, up 92% and it seems the small 500 has reached its maximum. The Ram (up 16%) and Grand Caravan (down 6%) are among top 5 best selling cars of that country. In Argentina where total market continues its instability, Fiat is doing good with the new Siena, up 10%, the Uno, up 11%, and the Strada, up a massive 74%, or 2105 units more. Bad for the Palio (the new generation just began local production some weeks ago), the Punto (the restyling will arrive by the end of the year). The small 500 sold almost 2.000 units.

The Fiat 500 sells more than many other Chrysler models. Source: http://www.bestsellingcarsblog.net

*Fiat, Lancia, Alfa Romeo, Chrysler, Jeep and Dodge.

Source: www.carsitaly.net, www.bestsellingcarsblog.net, http://www.goodcarbadcar.net

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June 2012, a quick brief to Fiat-Chrysler results

While the analysis for the first semester gets ready, here it is a quick review of most important facts about Fiat-Chrysler sales figures for June/12. In Italy the bad situation continues with a total market that dropped 24% year on year to 129.000 cars. However Fiat Group managed to increase its market share up 0.4 points. This ‘good’ result is due to the good acceptance of new generation Panda that has become the country’s best selling car above the traditional Punto. The Panda, whose sales include the old and new generation, was again in the podium for 6th consecutive month and its sales were up 5% year on year but down 15% compared to May figures. This is because the summer has just started and normally car sales fall during this time. The old Punto, whose new generation was delayed again, suffers the consequences and falls 34%! Is a pity how Fiat is treating this car and it should tells Marchionne to change his mind, because no matter it is still one of best selling cars in Italy, Fiat could have a larger market share in B-segment with an all new Punto. The best prove: the all new Peugeot 208 managed to occupy place number 13 among best selling cars with more than 2 thousand units sold. It shows the impact that a new generation can have in consumers no matter the bad situation (new Toyota Yaris occupied place number 6!). The Fiat 500 is also doing good as it was the third bestselling car in Italy but its sales falled 26% compared to May figures. One more Fiat to had a good performance was the Freemont with more than 1400 units sold. The same quantity sold by Lancia Delta which had its best month so far. The small Ypsilon continues to impress, especially in Turin, with more than 4200 units and once again the Alfa Romeo Giulietta impresses ahead of VW Golf by more than 400 units. The Giulietta seems to get the leadership of C-Segment while the Golf, still popular, begins to suffer the same illness of Fiat Punto. Very bad numbers for Alfa Romeo MiTo, with less than 1000 units delivered below the Mini and Audi A1. By brands it is important to mention the great result of Lancia which occupied place number 3 mainly because of the good result of the Ypsilon and Delta, as the American models seem to not to take off.

Even the arrival of new sporty versions of the Punto, the car can’t stop its sales drop all over Europe, Italy included

Meanwhile in America the situation is really different. The total market had an awesome growth of 22% year on year. More or less, all Chrysler models had good results: the Ram pickup was the country’s number 10 best selling car, decreasing one position compared to May/12. It sold almost 24.000 units, up 17%, less than the whole market, but much more than Ford F Series and Chevrolet Silverado (11% and 3%). The Chrysler 200 and Jeep Grand Cherokee continue to impress with great sales figures up 51% and 39%. Nevertheless the Jeep sold 1.500 units less than Ford Explorer. In the case of the Chrysler part of the success is explained by the good welcome it has had in California, the largest market in the States. The Wrangler was Jeep’s best selling model with more than 14.000 units, up 28%. Other great performances were the Dodge Avenger (+68%), Jeep Liberty (+50%), Chrysler Town & Country (+32%) and of course the awesome result of Chrysler 300 with almost 7.000 units delivered, up a massive 179%. It seems that finally Americans begin to like it, as it had a very slow begining during 2011. Fiat managed to sell again more than 4.000 units of its 500, growing 122% year on year, and just 172 below the Mini. If the trend continues the successful mini car could meet Marchionne’s first forecast of selling 50.000 units per year, especially now that there is the new Ad campaign. Bad results for Dodge Caravan, up only 1%, Dodge Charger, up 18%, the old Jeep Patriot, down 4%, and Jeep Compass, -15%. Weird what is happening to Dodge Durango, the all new big SUV presented recently. The car is not popular at all as it should be coming from its successful cousin, the Jeep Grand Cherokee. The Durango sold only 3.300 units compared to 12.500 of the Jeep, and was down 43%.  By brands only Dodge/Ram combined grew less than the market, 5%, but Chrysler had an excellent month growing 62.5% (due to 200 and 300 models) and Jeep sold 23% more. At the end, due to Dodge/Ram results, the whole group grew less than total market but it keeps its market share around 11%.

The Chrysler 200 has become the symbol of reborn of Chrysler

Pretty much what happened in Brazil. Fiat registrations grew less than total market which had its second best month ever, up a massive 19% thanks to new incentives given by the government to stop the slow down of last months. Nevertheless Fiat kept its market share but did not get as much as consumers as it could had done. It sold 18% more than one year ago. The only good performance was the new Palio, up 103%, which occupies place number 4 among best selling cars of that country. Even like that it seems the B-Segment Fiat has arrived to its top of sales and will not be able to reach the sales figures of VW Gol. The new Siena is doing well but is taking time to beat its rivals, the VW Voyage and Chevrolet Corsa Sedan. In June it sold 9.500 units, up 8%, just 35 units below the Corsa and 354 above the Voyage. The Uno sold almost 26.000 units and was again Brazil’s second best selling car, but its performance was not brilliant: +1.6%. The Fiat Strada had the worst result. One year ago it was Brazil’s 5th best selling car with more than 10.500 units sold. In June 2012 it sold 8.400. The facelift presented in June must help to revitalize the pickup. Further down, the Punto, whose facelift was presented some days before, sold around 300 units more but lost market share with the rise of Nissan March, imported from Mexico with very competitive prices. Also from Mexico, the small 500 sold more than 1.300 units, but is far from 2.400 units sold in March of this year. The C-Segment is again a problem for Fiat. Though the facelifted Bravo just arrived in June to the dealers, it continues to fall in the list, and during June/12 it was down 8.1% and the Linea, without any facelift, dropped 57% (without taking into account that new generation of Hyundai i30 has not arrived yet).

The new Palio and Fiat 500 in Brazil. Both cars have had an enormous success over there. Photo by 500blog

In Canada Chrysler Group along with Fiat had moderate results. The whole group just grew 0.5% in a market that is slowing down for the first time in 2012. The best performance was the Dodge Caravan, up 10% and reaching more than 6.000 units, very close to the 6.342 Rams delivered. Both cars are number 2 and 3 best selling cars. Fiat sold 48% more but as in Brazil is far away from 1.200 units sold in March and April of this year. For the first time in this year, Argetinian results were negative. The whole market falled 12% and Fiat dropped 23% as it had some problems with production in its Cordoba factory. All models falled except the small 500 that counted 389 units, not far from the record achieved in May. The uncertain situation of Argentinean economy must continue to affect car sales. In Europe things are going really bad. Due to lack of new models Fiat and Alfa Romeo brands drop their sales more than the average of the market, especially in France and Germany. In the UK the good performance of Fiat 500, again in Top 10 during June, allowed Fiat brand to fall  only 1.3%. Lancia improves but its numbers are really marginal. In France only the mini cars, the 500 and Panda, had a ‘good’ result, up 3% and 8%, but the Punto falled a extreme 44%, and the beautiful Giulietta dropped 29% in its third year of commercial life. In Germany the situation with the Punto gets really worrying: the car dropped a spectacular 67% and could not even sold more than 1.000 units, in a market that grew 3% during that month. The 500 falled 3% due to the great success of the VW Up!, while the new Panda grew 6.2%. The Giulietta falled 21%. In the troubled Spain, Fiat brand grew an interesting 22% against the general fall of 12% thanks to great performance of Fiat 500, up 73%, and Panda, up 145%.

 

Source: http://www.bestsellingcarsblog.net and http://www.carsitaly.net

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More production of successful Jeep Wrangler

Jeep Wrangler Unlimited Altitude version. Photo by netcarshow.com

Chrysler Group has announced they will add more work force to their Toledo Assembly plant to increase production of Jeep Wrangler. Chrysler wants to maintain the enormous success of this Jeep but is struggling to rise production as Toledo plant is the only one that produces it in the entire world. Currently there are 500 people working there, but they are now expanding the capacity and 1100 more workers will be hired by 2013. The Wrangler and Grand Cherokee are Jeep’s chosen products to make Jeep a global brand, according to Marchionne. Last year the old style Jeep sold more than 150.000 world wide from which 122.460 were delivered in the US market, up 30%. This year the success continues as it has sold 56.410 units in the first 5 months of the year, up 35%, making of it the 5th best selling car of the group in America, after the Ram, Jeep Grand Cherokee, Chrysler 200 and Dodge Caravan. Since the 5 door version (called Unlimited) was introduced in 2007 sales have been always rising and now that American car market seems to be recovering, it’s time to gain more market share and go abroad.

Source: Good Car Bad Car

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Why so good in America and so bad in Italy? Opinion

Illustration by Automobile Magazine

On friday Fiat SpA released the Group’s results for May 2012 in Italy and USA. Unsurprisingly sales figures confirmed the recent trend: America’s rise up and Italian deep crisis. Those are frequent results since last year when the new Fiat-Chrysler Group began to see a shift in car registration growth from its native Italy to its new native America. 3 years ago, when Marchionne signed the deal with Obama’s government, was Fiat saving Chrysler from bankruptcy. Now is not that Chrysler is saving Fiat from disaster, but because of several facts to be explained in this article, Chrysler Group is now leading the match to make of the Group one of ‘big six’ of the world, while Fiat Group deals with big problems in Europe and tries to maintain its success in Brazil. To try to explain the reasons of this situation with only one fact would be unsuitable. Behind the uprising of Chrysler and the crisis of Fiat, there is a connected net of things that can explain why Chrysler, without any all-new model is having continuos sales growth while Fiat, with some new models, is looking deseperate for solutions to not to sink.

First of all there is the Economic crisis reason. The financial problems that took place in USA in late 2008 affected first American economy and then European one. But while America is more or less getting over it Europe add the debt crisis of some of its EU members like Greece, Ireland, Portugal, Spain and Italy. Althouhg developed countries are all facing the new scenario in which emerging markets are catching investment flows, the situation of America is much better than Europe’s. The worst has already passed in the US, but not in Europe where is expected a full year 2012 and 2013 with lot of difficulties in terms of unemployment, demand and social destabilization. Italy is part of both, the problem and the solution. Its debt problems are making Italian authorities to rise taxes, and therefore restrict consumption. And with no good perspectives in the short term, here comes the second reason of the gap between F-C sales in USA and Italy. Italians are pesimistic about their future, about getting a job and go ahead. Americans are still having problems but their mood is different as they see the light at the end of the tunnel. And mood is a factor that explains perfectly the situation. When people don’t believe in better things to come they don’t care about the future and rather think of their present as a survival exercise. In the other hand, when some of main economic indicators show that the worst of the crisis has just passed, then people start to change their habits and be more positive about coming days. The mood certainly affects car industry, as a car is a product that costs, and is part of people’s main assets.

Auburn Hills now shines. Photo by http://news.ottawadodgechryslerjeep.com

Actually the mood among citizens (or buyers) can be seen in other fields. If one watches any interview or statement of Sergio Marchionne, it will be evident the change of mood when he talks about Chrysler and America and when he mentions Fiat and Italy. His face changes. Yes, Fiat Italy is just giving him problems, but the good mood he projects when he is in Auburn Hills should be the same or better when he is in Mirafiori. People notice it and coming from him, has an impact on the organization, composed by powerful labor unions that every day communicate Italians their dissatisfaction with corporate decisions. It is not the intention to evaluate who is right in their demands, but this tense situation between board of directors and labor unions is generating a bad image of Fiat among Italian buyers. And that’s the other reason that can explain the gap between Chrysler’s sales in USA and Fiat’s in Italy. All car makers are having sales drops in Italy, but Fiat also worries because of the economic impact of its latest corporate decisions. Italians don’t like the idea of shifting production abroad (Poland, Serbia, USA, Mexico and now China), and they blame Fiat of being part of the unemployment problem there is now in Italy. If it is true or not, the reality is that ‘Fabbrica Italia’ plan has not been enough to project the idea that Fiat works for Italy. And that is probably the main problem now: Italians are tired of the status quo that has not brought the solution for their problems, and Fiat is part of the status quo.

Of course it is also a matter of offer. Although the new Panda was introduced in late 2011, and new Ypsilon or the rebadged Fiat Freemont are doing a good work since their launch in Geneva 2011, it has not been enough to change the trend. Fiat has decided to postpone the launch of new models waiting for better economic scenario arguing that most of European car makers are loosing money with their latest products. Fiat may not be loosing money but they are certainly loosing market share. The Punto, which was among Europe’s best selling cars, is now passing through its 7th year of lifecycle with remarkable sales drop Italy included, and there is no replacement model until 2014. Fiat Group’s model range in Italy is dramatically reducing: Fiat just offers 3 different small cars, Alfa has just 2 models at all, and Lancia survives thanks to its Ypsilon, that by the way is only successful in Italy. In this context, selling cars become a hard job. Fiat can not depend on economic cycles to develop its models. The models must be able to generate cash and support the production eventhough there is a big economic crisis, so a decision like the postponement of next Punto is going to increase the sales drop in a market that loves A and B-segment cars.

FIOM Labor Union protests. Photo by selvicenza.blogspot.it/

Finally, another fact that is playing against Italian Fiat’s sales is the role of government. Italian authorities continue to atack car industry through new taxes (super bollo, etc.) and making more expensive the price of gas. It has a direct impact on the demand in a moment in which people are struggling to keep their jobs and go on. The coming incentives for low emission and electric cars may be a good solution, but at the end an industry that depends on economic help is a none feasible industry. The role of government should be of generating good conditions for the whole industry and not creating new obstacles or distorting it with artificial and unsustainable incentives. Fiat made a good move with the gas promotion announced recently. All of these factor explain the increasing gap between the results in both sides of the Atlantic. What is next is to learn from what’s happening in America and anticipate it in Italy, but quickly, really quickly.

Italy’s figures include Fiat, Alfa and Lancia numbers only. Source: carsitaly.net, Chrysler Communications and Quattroruote.it