Fiat Chrysler Automobiles (NYSE:FCAU) said that its U.S. sales fell 2.3% in the fourth quarter from a year ago, as good demand for its Ram pickups wasn't enough to offset slumps across much of the remainder of its product portfolio.

Following the results, FCA announced plans to idle four of its North American factories temporarily, to give its dealers time to reduce inventories of key models that have swelled as sales have slowed.  

For the full year, FCA's U.S. sales were down 1.4% from a year ago.

A blue 2019 Jeep Cherokee Trailhawk, parked on a beach at dusk

Jeep Cherokee sales fell 20% in 2019. Image source: Fiat Chrysler Automobiles.

High and low points of FCA's fourth-quarter sales report

The high points:

  • Sales of FCA's Ram pickups, including new heavy-duty models, rose 7% in the fourth quarter and were up 18% for the full year. That's a big victory: With Ford Motor's (NYSE:F) F-Series down 1.4% in 2019 ahead of all-new models, and General Motors (NYSE:GM) hit with supply shortages of its brand-new full-size trucks after launch snags and a 40-day U.S. strike, FCA had good supplies of its well-regarded trucks -- and the marketing muscle -- ready to take advantage. 
  • Demand for sedans has been terrible, but don't tell FCA: Sales of its brawny Dodge Charger four-door rose 23% in the fourth quarter and were up 21% for the full year. 
  • The iconic Jeep Wrangler is selling well after a sluggish start to 2019. Sales rose 6% in the fourth quarter but were down 5% for the year to 228,000. The closely related Jeep Gladiator pickup sold just over 40,000 units in its first year of production. 
  • Sales of the Ram ProMaster commercial van, a rival to Ford's Transit, have also been good: FCA sold about 56,500 of them in 2019, a gain of 21% from the year prior.

The low points:

  • The Jeep brand is struggling a bit, despite a white-hot market for SUVs. Sales fell 2% in the fourth quarter and were down 5% for year. The primary culprit: The midsize Cherokee, which saw sales decline 30% in the fourth quarter and 20% for the year.
  • The compact Jeep Compass isn't faring much better. Sales fell 14% in the fourth quarter and were down 16% for the full year.
  • Sales of FCA's once-dominant minivans, the upscale Chrysler Pacifica and value-priced Dodge Caravan, were down 17% and 19%, respectively, in 2019. 
  • The two-door Challenger muscle car still sells well, but it didn't share the success of its Charger sibling in 2019. Sales fell 1% in the fourth quarter and 9% for the year. 

How FCA's results compare with rivals'

Automaker Q4 2019 U.S. Sales Change vs. Q4 2018 Full-Year 2019 Sales Change vs. 2018
General Motors 735,909 (6.3%) 2,887,046 (2.3%)
Ford Motor 601,862 (2.2%) 2,422,698 (3.5%)
Toyota Motor 604,017 0.3% 2,383,349 (1.8%)
FCA 542,519 (2%) 2,203,663 (1%)
Honda Motor 401,961 1% 1,608,170 0.2%
Nissan Motor 301,291 (18.4%) 1,345,681 (9.9%)

Data sources: The automakers. 

About those factory shutdowns

FCA is idling four of its North American factories in an effort to match inventory to demand:

  • Belvidere Assembly in Illinois builds the Jeep Cherokee; it will be idled for two weeks. FCA had 97 days of inventory of the Cherokee as of Jan. 1; 60 to 70 days of inventory is considered normal. 
  • Windsor Assembly in Ontario builds FCA's minivans and will also be shut down for two weeks.
  • FCA's two assembly plants in Mexico, which build the Dodge Journey and Jeep Compass as well as some versions of the Ram pickup, will also have downtime in January, FCA said. Inventories of the Journey and Compass were at 94 and 83 days' worth, respectively, as of Jan. 1. 

What it means for investors

For auto investors, here’s the big takeaway: The U.S. market is slowing down. FCA isn't doing badly relative to its peers -- it had a record pre-tax profit in North America last quarter -- but it won't escape the effects of slowing sales and rivals' rising incentives. I still expect the company to deliver on its full-year profit guidance, but 2020 could be a rougher ride.