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How Fiat Chrysler "got smart on pricing"


Fiat Chrysler is boosting profit margins by selling more Ram's, Jeep's and Hellcats and cutting dealer discounts, allowing the automaker to close a huge profit margin gap with General Motors and Ford.

During the second quarter, Fiat Chrysler earned a pretax profit of $1.4 billion (1.3 billion euros) in North America. That’s more than double the $650 million (595 million euros) it earned during the same period a year ago.

Marchionne delivered on profit margin, too, during the second quarter. The company's profit margin was 7.7% -- up from 4.9% last year.
In April, the automaker cut dealer discounts on wholesale pricing.

Dealers now pay 1 percent more for the Chrysler, Dodge, Jeep and Ram vehicles they sell, or about $200 more on a vehicle with a $20,000 invoice. That reduced the spread between the price dealers pay and the sticker price.
Fiat Chrysler transaction prices by brand in July compared with last July

Ram: $42,991, up 4.5%

Jeep: $32,718, up 0.4%

Dodge: $30,381, up 8.8%

Chrysler: $29,585, down 5.8%

Fiat: $23,089, up 2.9%

Industry average: $32,562, up 1.1%
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