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September 12, 2007
BY TIM HIGGINS
FREE PRESS BUSINESS WRITER
At a time when crosstown rivals are seeing their U.S. market share decrease, Chrysler LLC has been able to hold steady in large part because of its new Jeep vehicles.
For Chrysler, it's been a mix of incentives on Chrysler and Dodge vehicles and the introduction of new Jeep products -- Compass, Patriot and the four-door Wrangler -- that are helping prop up the Auburn Hills automaker in a year when General Motors Corp. and Ford Motor Co. have seen significant declines, experts agree.
"Those products, particularly the Compass and the Patriot, play right into where the market is going in terms of smaller vehicles and in terms of crossovers," said Tom Libby, senior director of industry analysis with J.D. Power and Associates' Power Information Network. "The timing of those two products is pretty good.
"If they didn't have these three incremental models in Jeep, Jeep would not have shown the increases it was showing, and so they wouldn't be able to offset the declines at the other brands," Libby added.
While U.S. auto sales are down 2.8% so far this year, Chrysler LLC's U.S. sales are down 2.7%, according to Autodata Corp.
Chrysler sees North America in general as a market where the automaker is trying to defend its share and get marginal growth.
"We battle it out segment by segment," Steve Landry, Chrysler executive vice president of North American sales, said in an interview earlier this summer.
"Our new products, such as the Wrangler two-door and four-door, are really helping," Landry said. "The four-door has really created a halo effect for the Jeep brand, bringing people into the Jeep showrooms and it has improved our two-door sales."
Sales of Jeep Wranglers are up nearly 71% so far this year compared to the same months last year, according to Autodata. The new design, including the four-door version, was launched last fall. The Jeep Compass, which was introduced in August 2006, and the Jeep Patriot, which was introduced in December 2006, are providing a lift, Chrysler officials note.
"In a down market, we are trending up on some of these new vehicles," Darryl Jackson, Chrysler vice president for U.S. sales, said in a recent interview.
GM and Ford have seen falling sales and market share so far this year. Both companies have made the strategic decision to pull back significantly on sales to daily rental fleets.
Chrysler's U.S. market share has increased slightly, according to Autodata, to 12.86% so far this year up from 12.85% in the same period last year.
Chrysler has relied on incentives, putting it out in front among the Detroit automakers in using incentives to help sell vehicles.
Chrysler used an estimated average of $4,140 in incentives per vehicle sold last month, according to Autodata. That's an average total that is $338 higher than Ford Motor Co. and $1,241 more than General Motors. A year ago, Chrysler was spending an average of $3,474 per vehicle in incentives during August.
But according to Power Information Network research, Chrysler has had to rely little on incentives to move its new Jeeps. Chrysler has not used any cash incentives to help sell the four-door Wrangler.
PIN research said the highest average monthly cash rebate on the Compass in 2007 was $1,054 last month and on the Patriot was $984 in April.
Erich Merkle, director of forecasting at IRN Inc., said he wonders whether the Patriot and Compass are competing against each other for customers and whether the automaker would be better off with just one of the models.
"I don't think Jeep is that big to have two vehicles at that lower price point, smaller in scale," Merkle said. "I think they are starting to parse things up too much down there."
LINK: http://www.freep.com/apps/pbcs.dll/article?AID=/20070912/BUSINESS01/709120323/1002/BUSINESS
BY TIM HIGGINS
FREE PRESS BUSINESS WRITER
At a time when crosstown rivals are seeing their U.S. market share decrease, Chrysler LLC has been able to hold steady in large part because of its new Jeep vehicles.
For Chrysler, it's been a mix of incentives on Chrysler and Dodge vehicles and the introduction of new Jeep products -- Compass, Patriot and the four-door Wrangler -- that are helping prop up the Auburn Hills automaker in a year when General Motors Corp. and Ford Motor Co. have seen significant declines, experts agree.
"Those products, particularly the Compass and the Patriot, play right into where the market is going in terms of smaller vehicles and in terms of crossovers," said Tom Libby, senior director of industry analysis with J.D. Power and Associates' Power Information Network. "The timing of those two products is pretty good.
"If they didn't have these three incremental models in Jeep, Jeep would not have shown the increases it was showing, and so they wouldn't be able to offset the declines at the other brands," Libby added.
While U.S. auto sales are down 2.8% so far this year, Chrysler LLC's U.S. sales are down 2.7%, according to Autodata Corp.
Chrysler sees North America in general as a market where the automaker is trying to defend its share and get marginal growth.
"We battle it out segment by segment," Steve Landry, Chrysler executive vice president of North American sales, said in an interview earlier this summer.
"Our new products, such as the Wrangler two-door and four-door, are really helping," Landry said. "The four-door has really created a halo effect for the Jeep brand, bringing people into the Jeep showrooms and it has improved our two-door sales."
Sales of Jeep Wranglers are up nearly 71% so far this year compared to the same months last year, according to Autodata. The new design, including the four-door version, was launched last fall. The Jeep Compass, which was introduced in August 2006, and the Jeep Patriot, which was introduced in December 2006, are providing a lift, Chrysler officials note.
"In a down market, we are trending up on some of these new vehicles," Darryl Jackson, Chrysler vice president for U.S. sales, said in a recent interview.
GM and Ford have seen falling sales and market share so far this year. Both companies have made the strategic decision to pull back significantly on sales to daily rental fleets.
Chrysler's U.S. market share has increased slightly, according to Autodata, to 12.86% so far this year up from 12.85% in the same period last year.
Chrysler has relied on incentives, putting it out in front among the Detroit automakers in using incentives to help sell vehicles.
Chrysler used an estimated average of $4,140 in incentives per vehicle sold last month, according to Autodata. That's an average total that is $338 higher than Ford Motor Co. and $1,241 more than General Motors. A year ago, Chrysler was spending an average of $3,474 per vehicle in incentives during August.
But according to Power Information Network research, Chrysler has had to rely little on incentives to move its new Jeeps. Chrysler has not used any cash incentives to help sell the four-door Wrangler.
PIN research said the highest average monthly cash rebate on the Compass in 2007 was $1,054 last month and on the Patriot was $984 in April.
Erich Merkle, director of forecasting at IRN Inc., said he wonders whether the Patriot and Compass are competing against each other for customers and whether the automaker would be better off with just one of the models.
"I don't think Jeep is that big to have two vehicles at that lower price point, smaller in scale," Merkle said. "I think they are starting to parse things up too much down there."
LINK: http://www.freep.com/apps/pbcs.dll/article?AID=/20070912/BUSINESS01/709120323/1002/BUSINESS
