Fiat Chrysler Automobiles N.V. (NYSE:FCAU) said that its U.S. sales fell 5% in March from a year ago, as good sales of Ram pickups weren't enough to offset a cutback in sales to fleet customers -- and a worrying decline in Jeep SUV sales.

FCA's year-over-year sales decline was steeper than the overall U.S. light-vehicle market's 1.7% drop. 

FCA sales: The raw numbers

March Total SalesChange (YOY)
Jeep 67,983 (11%)
Chrysler 16,929 (33%) 
Dodge 50,076  10% 
Ram 51,749 6% 
Alfa Romeo 555  1,191% 
Fiat 2,922 (5%) 
Total 190,254  (5%) 

Data source: Fiat Chrysler Automobiles N.V. 

FCA said that fleet sales accounted for 23% of its U.S. sales in March, and were down 15% from a year ago. Its retail sales were down 1% from a year ago. 

FCA's Maserati luxury brand counts its sales separately from FCA's U.S. organization. Maserati sold 1,312 vehicles in the U.S. in March, up 32% from a year ago, on good demand for its Levante SUV.

A silver Jeep Grand Cherokee SUV in a rocky off-road setting.

A jump in Jeep Grand Cherokee sales might have set FCA up for a good first-quarter profit. Image source: Fiat Chrysler Automobiles N.V.

The high points from FCA's sales report

For FCA shareholders, the good news is that some of the company's most profitable products had good results last month.

  • Ram pickup sales were up 6%. With sales of General Motors' (NYSE:GM) full-size pickups down year over year, the Ram was able to gain market share on its bigger-selling rival.
  • That sales gain for Ram came despite a drop in incentive payments. According to J.D. Power data made available to The Motley Fool, FCA spent an average of $5,644 per truck on Ram incentives in March. That's on the low side for Ram, and down over $500 from a year ago. Takeaway: FCA made more money on each Ram sale. 
  • Sales of the Jeep Grand Cherokee were up 22% from a year ago, with 20,374 sold. The Grand Cherokee is probably the most profitable Jeep, and likely one of FCA's most profitable products period. Year to date, Grand Cherokee sales are up 19%.
  • Sales of the elderly Dodge Journey crossover doubled in March, to 11,858. 
  • The Dodge Challenger coupe is a niche product, but in the more upscale "muscle car" trims it's a very profitable one. Challenger sales were up 17% in March. Year-to-date, the Challenger has slightly outsold GM's new (and well-regarded) Chevrolet Camaro -- a surprising win.

The not-so-high points

On balance, FCA's March results suggest a profitable month. There were some big things to be concerned about, however. 

  • Aside from the Grand Cherokee, sales of every Jeep model fell year over year in March, including the small Renegade (down 9%) and midsize Cherokee (down 11%). 
  • Sales of the well-regarded Dodge Durango crossover SUV were down 10%. As with the Jeep decline, it's puzzling to see this in a market that is so strong for other brands' SUVs. 
  • FCA's small-car strategy is going nowhere: Fiat-brand sales were down 5% from already-dismal year-ago levels.

The big question: What's up with Jeep?

The big question for FCA has to be this: Why are Jeep's sales down in a market that's white-hot for SUVs?

Jeep is arguably the world's greatest SUV brand, and SUV sales are soaring in the U.S. More than anything else, it was Jeep that powered FCA out of the depths of the economic crisis into steady profitability over the last several years. 

But something has changed. Jeep hasn't had a year-over-year sales gain in the U.S. since last August. Part of the explanation might be that an all-new compact Compass is on the way to replace both the current Compass and Patriot models. But as of the beginning of March, there were 12,000 Compasses and 30,800 Patriots in inventory in the U.S. -- plenty to support a much higher sales rate than we saw last month. 

More worrisome are the declines in Jeep's much newer small and midsize Renegade and Cherokee models. Is this the result of FCA's efforts to cut back incentives -- or is something else going on?

We may have to wait until FCA's first-quarter earnings call on April 26 to find out. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.