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Why March 30-31 might be the greatest two days of deals at FCA dealerships

03/20/2015

Monday and Tuesday, March 30-31, probably will be the most advantageous days of the foreseeable future for U.S. consumers to buy a new Fiat Chrysler vehicle.

You see, those two days are likely to determine whether FCA US’s self-described “Iron Man” streak of year-over-year sales gains will reach five consecutive years -- or will stop at an impressive but awkward 4 years and 11 months.

Need some sports metaphors to put this into context? Imagine a marathon runner pulling up lame within sight of the finish line, or a racecar driver running out of gas on the last lap of 24 hours at Le Mans.

It doesn’t take a marketing genius to know which of those two choices FCA would prefer to tout as evidence of its phoenix-like rise from the wake of Chrysler’s 2009 bankruptcy.

Yet extending the streak keeps getting harder and harder the longer it goes, like a Tour de France bicycle race run entirely on an increasingly steep uphill climb.

In order to reach five full years of sales growth on April 1, FCA will have to top the 193,915 vehicles it sold in March 2014, a figure that was 13 percent higher than sales in March 2013.

But this year, March has one fewer selling day and -- more importantly -- one fewer weekend than March 2014. Those things might not matter in monthly sales reports, but they matter on the sales floor at FCA’s 2,500 U.S. dealerships.

FCA also started out its sales climb this month in a hole: last March, it sold 8,756 Dodge Avengers after the inexpensive sedan had gone out of production that January. On March 1, it reported just 806 remaining Avengers in stock. Minivan sales have also slowed after the Windsor Assembly plant was idled in mid-February for retooling.

The new Jeep Renegade could help, but with two-thirds of March in the books, it is only now just arriving at dealerships nationwide. The other newly arrived vehicles -- the Ram ProMaster City and Alfa Romeo 4C -- won’t sell in anything close to significant numbers to provide a decent lift.

To be sure, FCA’s Iron Man streak is an important source of pride within the company and its executive ranks. A year ago, when the streak hit four years, Gualberto Ranieri, FCA’s head of global communications, explained its importance.

“The streak has become far more than just percentage increases that we cite at the conclusion of each month. We are proud of this streak and how it has transformed from a curiosity into a symbol of our continuing success in the marketplace,” Ranieri wrote in a blog. He also wrote that, “we realize that all streaks eventually come to an end, and we don’t want to see that happen any time soon.”

For dealers chasing FCA’s monthly stair-step incentives, powering the sales streak can sometimes lead them to make deals they normally wouldn’t -- such as selling a $34,000 Chrysler 200 for $25,000 and change to make a set monthly quota of 200s. FCA’s costs could balloon exponentially as well if it sacrifices profits at some point to keep the streak alive unnaturally.

So what’s all this mean? It’s pretty simple, really.

Five years of straight sales gains is a hell of an accomplishment.

Getting to that point at the end of this month might make for some stupidly good deals for consumers.

And if the streak does reach 60 consecutive months in March, it might be best for all involved to just let it die a natural death.
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Discussion Starter #2
US: FCA sales streak puts pressure on dealers

US: FCA sales streak puts pressure on dealers



03/30/2015




Fiat Chrysler Automobiles US, formerly the Chrysler Group, is set to report its sales for March on April 1 and the tally is going to be no April Fool’s a five-year streak of increasing sales could be achieved or fall just one month short.

The period – one of the longest in which any automaker managed to post monthly sales increases – has been deeply transformative for both the automaker and its US dealers. For the former the results have helped shun away the disgraceful image that surrounded it back in 2009 when it was saved by the government and later on acquired by Italy’s Fiat SpA. The company has now morphed into Fiat Chrysler Automobiles NV, the world’s seventh-largest automaker, with its FCA US subsidiary axing the old corporate name of Chrysler Group LLC. “It is by no means for the faint of heart, but I’m looking to continue to grow,” comments Reid Bigland, FCA’s US chief of sales. “Growth is nonnegotiable from my perspective.” The comments underlie the huge pressure set on the dealership network.

There are around 2,600 dealers for FCA US, and some have turned into Las-Vegas style high rollers. Those having medium-sized businesses say it’s not unusual to have $100,000 or more in monthly net profit – but all hangs in balance on the decision to reach the carmaker’s utterly aggressive monthly delivery thresholds. Called the Volume Growth Program, dealers usually manage to fulfill the quota by resolving to higher incentives and worse overall deals, and often spend more than usual on advertisement. If they fail to make the tally, they usually post huge monthly losses.
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Fiat Chrysler U.S. Sales Streak Reaches 5 Years

Fiat Chrysler U.S. Sales Streak Reaches 5 Years as Ford, GM Slip

04/01/2015

(Bloomberg) -- Fiat Chrysler Automobiles NV said March U.S. vehicle sales rose 1.7 percent, extending its streak of monthly gains to five years amid an expanding U.S. auto industry as General Motors Co. and Ford Motor Co. posted declines.

Fiat Chrysler’s U.S. unit delivered 197,261 vehicles last month, matching the average analyst prediction for FCA US LLC, the former Chrysler Group. GM’s slipped 2.4 percent and Honda Motor Co.’s dropped 5.3 percent, while Ford and Nissan Motor Co. reported smaller sales declines than analysts had projected. Toyota Motor Corp. posted a bigger-than-estimated increase.


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