Why Chrysler's Sales Were Up While Ford's Were Down
February was a tough month for U.S. auto sales -- unless you were Fiat Chrysler , 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 , General Motors , 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.
The article Why Chrysler's Sales Were Up While Ford's Were Down originally appeared on Fool.com.John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends and owns shares of Ford. It also 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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