Chrysler’s New-Car Sales Performance Continues to Impress

While one analyst took a cautious approach when dissecting April’s new-vehicle sales performance, other industry watchers continued to be impressed by what’s developing with Chrysler.
The domestic OEM announced Tuesday it posted its best April sales performance since 2008, turning 141,165 units for a 20-percent increase compared with sales in April of last year when the automaker moved 117,225 units.
And the upward movement isn’t coming from a single badge. Executives highlighted Chrysler, Jeep, Dodge, Ram Truck, and Fiat brands each posted sales increases in April compared with the same month a year ago.
Chrysler now has recorded 25 consecutive months of year-over-year sales gains and 11 straight months of sales increases of at least 20 percent.
“This business is all about product and the quality and fuel efficiency of our current vehicle line-up has never been better which is evident in our results,” stated Reid Bigland, president and chief executive officer of Dodge brand and head of U.S. Sales.
Edmunds.com senior analyst Michelle Krebs thinks Chrysler could continue its string of improving sales gains.
“Chrysler had yet-another glowing sales report in April with gains across the board by brand and — with only a few exceptions — by model. Even better, its sales increases were not accomplished with beefy customer incentives, which were essentially flat from March, and up only a bit from a year ago,” Krebs surmised.
“The full-blown launch in June of the Dodge Dart small car — Chrysler’s most significant new model in a long time — should give the company another nice boost,” she projected.
Meanwhile, Kelley Blue Book senior market analyst Alec Gutierrez had a different take on Chrysler’s incentive activity and also took a different approach when considering the upcoming Dart launch.
"Although Chrysler has posted a dramatic turnaround, some of its success in the last few months can be attributed to heavy incentive support for many of the brand’s high-selling models. Chrysler’s 200 and Avenger currently are available with more than $3,000 in cash rebates, and the larger 300 is eligible with an ample $2,000 cash rebate,” Gutierrez pointed out.
“Chrysler cannot rely on incentives to continue to drive sales indefinitely. The brand will need to keep its product line fresh to remain competitive,” he stressed.
“The Dodge Dart, set to hit showrooms in June, should help keep Chrysler’s momentum going forward, although with gas prices moving downward, Chrysler may have missed an opportunity for a strong launch out of the gate,” Gutierrez went on to say.
Where New-Car Sales Are Heading
While analysts from J.D. Power and Associates, Edmunds, TrueCar.com and KBB all thought April’s seasonally adjusted sales rate would stay at 14.0 million or higher, CNW Research president Art Spinella hinted at how it might be difficult for franchised dealers to maintain that pace as summer gets into full swing.
CNW first noticed back on April 20 that floor traffic and closing ratios during the middle of the month softened considerably.
“While such a contraction often is followed by a strong third-10-day period, it didn’t happen in April,” Spinella pointed out.
“In the end, floor traffic for the month grew at only a 1.5 percent rate versus the same month a year ago,” he added.
CNW also indicated April’s closing ratios slipped to 32.9 percent from March’s 39.8 percent, a decline of 17.5 percent.
The firm said floor traffic today is an indicator of future sales and the April figure might be indicative of a 13.9 million to 14.1 million SAAR in the middle months of the year.
“It’s too early to panic, but the response is likely to be higher incentive levels to boost showroom traffic,” Spinella declared.
Other OEM Sales Highlights
Beyond Chrysler’s performance, here is a sampling of how other major automakers fared when discussing their April sales figures on Tuesday.
—While Ford acknowledged that its April sales volume was 5 percent lower than the same month last year, Blue Oval officials indicated the Fusion and Edge set all-time April records with 21,610 and 10,520 sales, respectively. Also, the OEM said it turned the most Explorers in an April since 2005, moving 13,419 units.
—General Motors reported April sales of 213,387 vehicles in the United States as its retail sales were essentially equal to last April. Officials noted GM’s fleet sales declined 25 percent due to the timing of rental customer deliveries, as previously indicated. As a result, total sales were down 8 percent.
—American Honda reported April U.S. sales of 122,012 units, an increase of 10 percent based on the daily selling rate. The Honda division posted sales of 109,837 units, an increase of 9.2 percent compared to April of last year. Acura’s April sales of 12,175 units were up 18 percent compared to the same month last year.
—Toyota Motor Sales USA tabulated its April sales to be 178,044 units, an increase of 25.5 percent compared to last April on a daily selling rate basis. The Toyota Division posted April total sales of 160,493 units, an increase of 27.2 percent over last April. The Lexus Division reported total sales of 17,551 units, up 12.3 percent over last April.
—Nissan North America reported April U.S. sales of 71,329 units versus 71,526 units a year earlier, down 0.3 percent. Nissan Division sales decreased 0.9 percent for the month at 64,200 units, while sales of Infiniti vehicles were up 5.4 percent over the prior year to 7,129 units.