Why Chrysler's Sales Were Up While Ford's Were Down

Sales of Ram pickups surged in February, while Ford's pickups saw just tiny growth and GM's pickup sales declined. Photo credit: Fiat Chrysler.

February was a tough month for U.S. auto sales -- unless you were Fiat Chrysler  (NASDAQOTH: FIATY  ) , in which case times are good. Chrysler said that its U.S. sales were up 11% in February, making for its best February since 2007, even while Ford (NYSE: F  ) , General Motors  (NYSE: GM  ) , and Toyota all posted declines, as harsh winter weather kept car shoppers home in many parts of the country.

What's Chrysler's secret? Better snow shovels? As Fool contributor John Rosevear explains in this short video, Chrysler's incentives have been among the highest in the business -- but that's only part of the story.

A transcript of the video is below.

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John Rosevear: Hey, Fools, it's John Rosevear. The automaker now known as Fiat Chrysler Automobiles reported this past week that its U.S. sales were up 11% in February, its best February since 2007. That came as most of the other guys -- Ford and GM and Toyota and Honda -- all reported that their sales were down because of the harsh winter weather.

This was the second month in a row where we've seen Chrysler sales up while most of the other guys were down. People have been joking that Chrysler's dealers must have better snow shovels or something, but I think there's a little more to the story here. Chrysler's incentives have been on the high side for quite some time now, and according to the analysts at Edmunds.com, Chrysler's incentives were up 7.4% in February versus January, while Ford and GM were both down. In fact, GM's are down a lot from where they were a year ago, even though they're offering discounts to sell off their outgoing heavy-duty pickups and big SUVs. Edmunds says that only Ford was paying out more in incentives on an average per-vehicle basis last month, but it's likely that Ford's average transaction prices were higher than Chrysler's, too.

So are incentives the secret to Chrysler's recent sales gains? I'm sure they're part of it, and I'm sure that Chrysler's traditional willingness to be a little looser with lending standards is part of it, but also part of it is that many of Chrysler's vehicles are actually pretty solid entries right now.

GM's pickup sales were down and Ford's were up just a tiny bit, but sales of Chrysler's Ram pickup line were up 26% in February. They said it was their best February for pickup sales in eight years. The Ram has gotten some good accolades recently, Consumer Reports likes it, and it's really nice to drive and priced a bit aggressively.

Jeep is also doing big business right now. I don't know if SUVs are easier to sell when there's snow on the ground, but Jeep had its best February sales ever last month, up 47% thanks to the new Cherokee, which they didn't yet have at this time last year. The Grand Cherokee is also doing really well: Sales were up 34% last month. That is an extremely profitable vehicle for Fiat Chrysler, and that bodes well for their first-quarter profits.

But as we saw at Ford, they had a tougher time with their car line. Big rear-wheel drive cars are a tough sell in winter, especially a rough winter, so it's no surprise that sales of the Dodge Charger and Challenger and Chrysler 300 were all down. But sales of the compact Dodge Dart were down 37%. The Dart got off to a promising start when it was first introduced, but it really seems to have fallen off of buyers' radar screens. They sold fewer than 5,000 last month. Ford's Focus also had a lousy month but Ford sold more than three times as many.

Fiat Chrysler has to be getting really concerned about that model. It seems like a fairly nice car but it's just not selling. The midsize Chrysler 200 outsells it more than 2 to 1. Sales of the 200 were up 5% last month, but they're starting to sell that one down. The all-new 2015 model will arrive in the second quarter. So a decent month overall for Fiat Chrysler. Sales were up in a tough market. Thanks for watching, and Fool on.


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  • Report this Comment On March 07, 2014, at 3:41 PM, Cody700 wrote:

    Ford's sales were not down at all. They were 3% higher than they were 1 year ago, same month. Painful that distortions is all our media is capable of reporting. Dodge trucks will never outsell GM or Ford, so why are they trying to make it sound like they are even in the same league? Very painful.

  • Report this Comment On March 07, 2014, at 9:34 PM, DomVendetta wrote:

    Cody700

    Yes they were and Dodge trucks just did. You can click your heals together three times Cody and say "I wanna go home" Its still not going to change the fact that Chrysler has been on the way up for a while.

  • Report this Comment On March 07, 2014, at 9:42 PM, moparmodelfan wrote:

    The main reason that Dart sales are down is because people shopping for Dart are being drawn to Avenger/200 because of the high incentives on the hoods of those two. Once the new 200 and the Avenger replacement start rolling out then it should equal out for Dart.

  • Report this Comment On March 08, 2014, at 2:18 AM, LouisTewl wrote:

    Where to start? Despite being called regularly on his pro-Ford bias, our JR can't keep himself from spin-pumping Ford -

    "They sold fewer than 5,000 (Darts) last month. Ford's Focus also had a lousy month but Ford sold more than three times as many."

    As noted by @ mopar above, the over-sized incentives offered on the current-model Chrysler 200 to get them completely out of the buying public's mind before the new 200 product launch (and FCA's first home run) for 2015 is the real reason behind the drop-off in sales of the Dart, FCA's first Chrysler - on Alpha Romeo platform entry model.

    While appearing to compliment Chrysler Ram with a short nod to Consumer Reports, JR doesn't mention the 2015 Eco-Boost Ram with fuel mileage that solidly surpasses Ford's or the 2015 small Jeep crossover, both of which are getting very strong reviews.

    Further, despite Jr's previous dismissal of both Chrysler and Fiat as only "regional" car makers, and how Fiat is in such trouble in Italy because it can't compete against Volkswagon and his beloved Ford, etc., etc., etc., bashing FCA and pumping Ford and GM ad nauseum, there is, perhaps not surprisingly, no mention that the new sure-to-be best seller crossover Jeep will be manufactured IN ITALY FOR SHIPMENT TO MARKETS IN OVER 100 COUNTRIES.

    So misreporting the role of incentives and otherwise writing thinly-veiled advertorials to support TMF's long position in Ford and GM will only work for a little while longer this year, JR, because 2015 will be FCA's year, and today's newly-established-on-light-volume $11.00 support level is a good start.

    Next stop - NYSE listing. FOOL ON!

  • Report this Comment On March 08, 2014, at 3:17 AM, LouisTewl wrote:

    While I must now edit my above comment in that JR has written a separate later article on the new 2015 (upon which I have commented separately), I must also add this:

    This Jeep is going to put Fiat's idled employees, around 50% of the total Fiat workforce in Italy back to work. Further, with this Jeep, FCA will take a big chunk of market share back from Volkswagon and Ford all over Europe and establish the Jeep brand around the world. Brilliant.

  • Report this Comment On March 08, 2014, at 10:51 AM, LouisTewl wrote:

    My above-comment re JR's separate article should read "the new 2015 Jeep."

    An "edit" button like they have on the Seeking Alpha comments feature would be nice, and modern!

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