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Good news for Chrysler as light truck sales take off in June

Consumers flock to crossovers in quest for fuel efficiency, analyst says

July 26, 2011

Fuelled by a growing construction sector and customers seeking fuel-efficient vehicle alternatives, Chrysler LLC has overtaken Ford Motor Co. as the top year-to-date seller of light trucks in Canada.

According to a report released by Scotia Capital Inc., Chrysler sold more pickups, minivans and sport utility vehicles in June than any of its rivals, and that allowed the automaker to wrest top spot away from Ford in the first half of this year.

"It's also a combination of consumer-driven sales and a desire for smaller, fuel-efficient vehicles," said Carlos Gomes, an economist with Scotia Capital. "The Jeep brand is doing extremely well for Chrysler, with year-to-date sales up about 25 per cent and pickup sales up about 18 per cent. Chrysler has out-performed Ford in that segment and it has resulted in stronger sales in a very important segment for Chrysler."

Gomes also said consumers are opting for crossovers for practical, fuel-efficiency reasons and the construction sector is boosting pickup sales. Sales of the Dodge Journey, which is smaller than a traditional SUV and uses less gasoline, increased more than Ford's Escape and General Motors' Chevy Equinox, according to Scotia Capital.

Scotia Capital. Gomes also said high fuel prices have led consumers to move toward compact cars and car-based SUVs because of their fuel efficiency.

"The market, as a whole, seems to be moving in that direction in Canada, so it appears to me as if this development has legs," said Gomes.

According to Scotia Capital, light truck sales through the first six months of the year increased more than twice as quickly as Canada's industry average over the same period a year ago.

In the past 18 months, about 85 per cent of Chrysler's sales have been generated by this segment.

According to Chrysler, the Journey, Dodge Grand Caravan, Ram pickups and Jeep Wrangler SUVs all had their best-ever June sales in Canada last month. It's the latest in a string of good news for Chrysler that includes positive vehicle reviews from Consumer Reports and improving initial quality rankings from J.D. Power & Associates.

"These types of positive reviews are a major factor when it comes to consumer perception and confidence," said Gomes.

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