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Gains for Jeep Help Keep Fiat Chrysler Automobiles' Sales Growth Going

By John Rosevear – Sep 1, 2016 at 4:20PM

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The iconic SUV brand, a critical source of profits for cash-strapped FCA, posted a 12% sales gain in the U.S. last month. That helped FCA to an overall gain despite a choppy market.

The Jeep Cherokee continues to find lots of happy new owners. Sales rose another 41% in August, helping FCA buck an overall industry decline. Image source: Fiat Chrysler Automobiles.

Both of its old Detroit rivals posted year-over-year declines in U.S. sales in August, but Fiat Chrysler Automobiles (FCAU) rolled on with a 3% year-over-year sales gain powered mainly by its hot SUV brand, Jeep.

A look at the numbers

Here's a look at what worked for FCA (and what didn't) in August.

  • Jeep sales continue to be the biggest driver of FCA's sales growth and profits. The old SUV brand's sales rose 12% in August, powered by gains for nearly all of its models. The shining star was the still-hot midsize Cherokee, with nearly 24,000 sold in August -- up 41% from a year ago. Only the soon-to-be-replaced Wrangler posted a year-over-year decline.
  • In contrast to Jeep's success, Chrysler brand sales fell a sobering 22%. While the all-new Pacifica minivan posted a good result, and the big 300 sedan bucked the big-sedan trend to gain 22%, the Chrysler brand's totals were hurt by the ongoing phase-out of the midsize 200 sedan. Sales of the 200 were down 66% from a year ago.
  • Reversing recent trends, the Dodge brand posted a 5% year-over-year gain, on good demand for the midsize Journey crossover (up 40%) and gains for both of its brawny muscle cars. Sales of the Challenger were up 5%, while the big Charger joined its Chrysler 300 sibling in bucking big-sedan sales trends with a 24% year-over-year gain.
  • The Ram truck brand gained 2% year over year. While both Ford (F -5.83%) and General Motors (GM -5.64%) saw sales of full-size pickups drop from a year ago, sales of the Ram pickup line were roughly flat, while sales of the Ram ProMaster commercial vans were up solidly from a year ago. 
  • New sedans are coming, but right now Alfa Romeo'sU.S. lineup is limited to just the 4C sports car -- 37 were sold in August, down from 97 a year ago.
  • Fiat sales fell 21%, as a decent debut for the new Spider convertible failed to offset double-digit percentage declines across the 500 line.

For FCA, those gains for Jeep are a lifeline

FCA CEO Sergio Marchionne is pushing several big initiatives that he hopes will boost the company's margins (and reduce its big debt load) over the next few years. But until those bear fruit, the company is relying heavily on the ongoing success of its most profitable products: Ram pickups, the muscle cars, and -- especially -- the profitable and very popular Jeep brand.

The global boom in SUV sales has made Jeep's results shine for a few years now. That, more than any other single factor, is funding Marchionne's aggressive transformation strategy. While the stalling U.S. new-car market has to be a source of worry for Marchionne and his team, the good news, at least last month, is that Jeep is continuing to find plenty of buyers for its popular SUVs. 

John Rosevear owns shares of Ford and General Motors. The Motley Fool owns shares of and recommends Ford. The Motley Fool recommends General Motors. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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