The FCA-PSA Group merger will present challenges for the new company. Chief among them is Alfa Romeo and Fiat’s tenuous position in the American market. Jeep might be in trouble too.
One brand that definitely isn’t an issue is Ram, as 2019 saw the brand grow quite a bit. And the Ram pickups are now the second best selling full-size models in America, beating the Silverado.
Let’s start with the bad news first. Alfa Romeo dropped 23% and Fiat declined by 41%. Not good figures. That being said, FCA might not be terribly concerned about those brands, as the lost volume accounts for about 10,000 units. And a decent majority of those are from Fiat, meaning they’re probably not big profit makers. Keep the dealers who shelled out for standalone Alfa Romeo and Fiat stores in your thoughts and prayers.
Every nameplate sold by both brands experienced a minimum 22% decrease from 2018. The Spider (aka reskinned Miata) found 2,644 buyers last year. Don’t assume Mazda did terribly well with their two seater either: Sales topped out at about 7,700. Mazda will probably not drop the Miata, but I don’t see Fiat continuing to source their 124 from them. Anyway, Fiat sold about 6,400 examples of the 500 product line last year. That includes all three nameplates – the 500, 500L, and 500X. Yikes! Perhaps the most disappointing news is the Stelvio’s inability to find buyers. At 9,444 sales, it only beat out the Giulia by about 700 units. Once again, FCA probably isn’t upset over those numbers, because that platform is being modified for the next generation Jeep Grand Cherokee, a vehicle that will no doubt make money for the company.
While we’re on the subject of Jeep, let’s talk about the Grand Cherokee. Wanna know why the brand isn’t in a hurry to introduce the next generation? Because sales were up 8%. At nearly ten years old, the Grand Cherokee’s still got it. Those 262,969 examples sold have to be huge profit makers for Jeep. When was the tooling paid for, five years ago? Probably.
Other Jeep models didn’t fare so well. Aside from the additional 40,047 pulled in by the Gladiator, every other nameplate experienced a decrease in volume. They’re still big sellers though. Jeep sold about 405,000 examples of the Renegade, Compass, and Cherokee in 2019. The Renegade and Compass share a platform with the Fiat 500X, and the Cherokee uses the Compact Wide platform, which is also used for the Chrysler Pacifica/Voyager. More FCA profit machines!
And the Wrangler, despite a decrease to 228,032 in total sales, is still doing well. The Jeep’s 2018 numbers are likely skewed by the heavy sales of the previous generation during that year, which were heavily incentivized. And the Gladiator undoubtedly stole some Wrangler sales. Let’s keep in mind that the Wrangler now outsells mid-size sedans like the Ford Fusion and Nissan Altima, the latter example being the third most popular model in the segment. Strange days indeed.
Chrysler and Dodge also suffered big losses, although the percentages include a bunch of zombie models from both brands, which skewed the results a bit. The Pacifica’s sales dropped 17% to 97,705. Dodge sold about 6,000 less Challengers last year for a total of 60,997. Journey sales declined by 21%, but that crossover – which according to scientists originated in the Mesozoic Era – still managed to net Dodge an additional 74,686 in sales last year. Like its sibling, the Jeep Grand Cherokee, the Dodge Durango is in no need of an immediate replacement. Its 67,599 sales figure represented a 3% increase from 2018. The Charger also performed well. It gained 21% percent more volume than in 2018, for a total of 96,935 sold.
Finally, the Caravan, despite a 19% decrease from 2018, still managed to find 122,648 customers last year. A majority of those sales are probably to fleets, but it still enables FCA to accurately claim that it was the best-selling minivan in the segment in 2019. Pretty good numbers for a van that entered production when Pangaea was Earth’s only continent.
The Ram brand had an exceptional 2019. The Ram pickup lineup surged 18% to 633, 694 sold. That beats the Silverado, but GM can still claim they’re number two in the segment as combined Silverado/Sierra sales totaled about 802,000 last year. Paul’s favorite van, the Ram ProMaster, experienced a 21% increase in volume, which resulted in 56,409 examples finding a buyer in 2019. The ProMaster City, which is a competitor to vehicles like the Transit Connect, sold just under 13,000 examples last year, which was a 6% decrease.
| Make/Model | Units Sold 2019 |
|---|---|
| Jeep Patriot | 27 |
| Chrysler 200 | 48 |
| Chrysler Town and Country | 5 |
| Dodge Dart | 15 |
| Dodge Avenger | 1 |
| Dodge Viper | 5 |
| Fiat 500 | 3,267 |
To cap off FCA’s sales reports I thought it’d be fun to include all the zombie cars they sold in 2019. Overall, FCA probably made a lot of money last year, even if volume decreased a bit. Platform sharing, and the continued success of some older platforms played a big part in that.
The energy and resources that FCA put into Alfa and Fiat, with no return on the investment is amazing. Upfront, Fiat seemed to have a little energy with the cute 500, bit it made Fiat a one trick pony out of the gate. With the Fiat falling flat fast, it seemed like many were suspect that Alfa would go nowhere from the beginning – and they were right. I sat in a Stelvio at the auto show last year, it was just another luxury SUV, handicapped by being imported in low volume from Italy. With Alfa’s reliability reputation, and likely a parts sourcing headache to go with it, I could only marvel at anyone willing to pay the premium for it over a Grand Cherokee.
The Dodge name still moves metal, and likely would have done even better if some of the money blown on Alfa / Fiat had been invested in it (and the Chrysler brand also still sells better than Alfa / Fiat for that matter).
We have a 2015 Dart in our fleet, and while it has some shortcomings that could have been resolved with some of that money, it has been a decent car for us. And, with its 2013-2016 model years it sold 334,000 cars in the US, and with its badge engineered Alfa counterpart, over 500,000 globally. And, they cancelled that car instead of the Fiat line?
Italian hubris.
The fact that they are still selling Darts (and 200’s) in 2019 tells you all you need to know about why they dropped it.
It could also be said there is still demand…😀
I believe selling 15 Darts in 2019 tells us a few dorky dealers with inventory control issues didn’t take care of business years ago. FCA stopped building the Dart January 2016 in an aborted model year.
The modern Dart sold about 90K in 2015, its final full year (really not a bad showing for what is was in a declining sedan world), and showed sales increases every model year it was in full production. The 2015 Fiat 500 sold 25K, and yet lived to its final 2019 model year, and a few dorky dealers will be selling them in 2023.
Compare 2019 sales of the moribund Chrysler 300 to the new and well promoted Alfa Guilia. The ancient Chrysler sold over 29K last year, the Guilia under 9,000 cars.
Every year Alfa and Fiat have been around, the Dodge and Chrysler brands have shown more brand equity, yet have been ignored, while FCA has tried vainly to push Alfa and Fiat, likely in hope of replacing the Dodge and Chysler brands with them.
The Ram’s popularity has been amazing to me, one who comes from the age when people would snicker about Dodge trucks. I have a nephew who has Chevrolet in his blood, having grown up around them and who put a lot of effort into modding a 90 pickup. He is now a confirmed Ram guy. He got a Ram truck at his workplace and was really impressed with it. He is now on his second Charger – a 2017 or 18 Hellcat he just bought as more hobby than transportation.
There is a big gleaming new Fiat-Alfa-Maserati dealership near my office. It is part of a corporate-owned group, but it can’t be paying for itself based on these numbers.
It is my memory that the ramp-up on the new Wrangler was a little slow for getting units to dealerships. My sister bought one of the first ones and she reported that inventory was thin – she may have even had to order it to get the stick shift she wanted.
Of the Detroit 3, decoding the future of FCA is probably the toughest. The Italian brands have certainly been a challenge and are pretty toxic at this point. Fiat has flamed out, and uncertainty about parts/service/dealer coverage make owners nervous and buyers stay away. My niece in New Orleans has a 500 (she loves the car actually) but for a brief period the closest dealer was Baton Rouge! That has been addressed somewhat, but things are still dicey.
Issues like this have kept prospective buyers like me staying away. I actually like the Alfa products, and started considering a Guilia Quadrafolio (it reminds me in many ways of the great cars BMW used to make). But the myriad of issues from company health to product quality concerns will keep me from ever pulling the trigger.
I am also a very happy Grand Cherokee owner. I’m on my second one of this current (long) generation, but just don’t want a third one of the same thing. I think a lot of GC owners feel as I do, and are nervously awaiting the replacement, hoping it will be better (or at least as good) as the current one. As for the GC today, I think FCA is driving business by offering screaming deals. The product is still seen as desirable, but it is bringing in different buyers more skewed toward value/lower price than this generation GC saw in its prime, when it sold for a nice premium.
Dodge likewise sells on either value (cheap) or nostalgia (muscle/pseudo muscle). Neither are recipes for long-term brand health. Poor Chrysler is dead-brand walking, and I’m surprised the Pacifica doesn’t sell better, as it actually seems to be a nice minivan. I guess that segment really is over.
So where do they go from here? The Ram is great, Jeep I think will be fine, but what sort of PSA-based vehicles will arrive, even as rebadges? The crystal ball (or Pentastar I suppose) is cloudy.
I should hope it will not be all doom and gloom at FCA once the merger with PSA bears fruit. Perhaps it is the catalyst needed to make some drastic changes, both to brands and dealerships, once the French come to the party as well. And really, we tend to view it from American eyes, and fixate on our perception of what we want out of the deal, not what the rest of the world wants.
Jeeps, although down in sales on some models, is still going gangbusters. To say otherwise is like saying Tesla is doing badly because S and X sales are down after the 3 came out. Money is being made, and that is what makes shareholders happy.
If PSA/FCA does what is expected, expect one of two options for us. One, Chrysler and Dodge go away, or Two, they are going to be badge engineered product based on older PSA or Fiat/Alfa platforms (more likely Fiat/Alfa, as that is what was cooking when Sergio was still alive). Fiat was made irrelevant by US buyers, but they would have done better if sold at CDJR dealers instead of studios, especially when Mopar stopped selling smaller cars. The 500 was and is a good city car, and the 124 was a more stylish Miata, and the 500X is a Renegade at a lower price with Italian clothing. None were really marketed, and word of mouth was drowned out by the Fix It Again Tony chorus, who are legion in the US. My guess is that Fiat/Alfa studio owners will get PSA product to sell, and with a bit of luck and a bit of marketing, they may have a chance.
Is the year-to-year Pacifica sales for the nameplate alone or does it include Pacifica and Voyager? The sales decline is really worrying if the newer number includes both but if it doesn’t that just reflects losing half the line to a new nameplate.
According to my source, which was FCA’s press release, there was no listing for the Voyager. My assumption is that it’s not on sale yet.
NVM, they’re on dealer lots right now. No idea why they weren’t listed.
The problems at Jeep seem to have started with the move of Tim Kuniskis to the head of the Jeep division in the US, in October of 2018. Manley must have realized the mistake, as, last June, Kuniskis was moved back to the moribund US passenger car operation, as well as being the global head of the globally failing Alfa brand. Kuniskis was replaced at Jeep NA by former Ram honcho Jim Morrison, while global Jeep operations are now headed by a former Nissan honcho.
I developed the Steve Plan for the re-invigoration of Jeep, but Mike Manley seems to have lost my phone number.
1: Replace the long-in-the-tooth non-grand Cherokee, which dates from 2014, with the Commander (2 row) and Grand Commander (3 row) that are offered in the Chinese market. Fresh exterior styling, upgraded interior, 3 row version to replace the Journey, and it frees up the non-grand Cherokee nameplate.
2: Mack Ave Assembly is being built out in Detroit, officially to build a new 3 row. I would badge the 3 row as the Grand Cherokee, replacing the Durango, with the replacement for the current 2 row GC being badged the non-grand Cherokee.
3: The Renegade and Compass sticker at virtually the same price. But the Renegade is built by relatively expensive Italian labor and takes a long ship ride to get to the US, while the Compass is built by cheap Mexican labor and takes a short train ride. The Compass must be substantially more profitable. Compass production has started in Italy, freeing about 70000 production spots in Toluca. 500 production in Toluca has ended, freeing 3000 production spots. The Journey will probably be dead at the end of 2020 as the 4 speed automatic, which is now it’s only transmission, goes out of production this year, freeing 70000 spots at Toluca. So, drop the Renegade and put Renegade shoppers in a Compass, now that Toluca has free capacity to fill the extra demand.
FCA’s plan wrt Fiat seems to be to drive customers away in hopes the dealers will give up and drop the brand. The 500 accounted for nearly a third of Fiat US sales. It’s now gone. The 500X and Renegade are the same car underneath, built in the same factory, but, while Jeep offers thousands in incentives on a Renegade, Fiat offers nothing on a 500X, leaving the 500X absurdly overpriced. The 500X accounts for about a third of Fiat sales. If dealers give up and drop the brand, FCA probably will not have to pay them restitution, like it would if Fiat was simply pulled from the US market.
I have been drooling over 500 Cabrios ever since they came out. There is a low mile 2017 at a very attractive price on offer locally, but the future prospects for parts and service availability keep me away. A shame because I have driven a couple Cabrios and found them to be delightful runabouts.
That pic at the head of the article, with the license plant that says #needaJeep, was a thing at auto shows a year ago. Each FCA brand had plates with a different thing on it. The one on the Fiats last year was unfortunate. I realize word can be used as “hello”, but I usually think of it as meaning “goodbye”.
Ram pickups are popular but eyewateringly expensive here Jeep is only auto correct for junk they may as well drop it, Chrysler 300s are everywhere Fiats and Alfas not so much, anywhere there is a dealer Peugeots and Citroens are common, rebadging Opels as Holdens is being turned off and Opel and Vauxhall dealers are extinct now, PSA has a bunch of dead and ready to die out here brands on its books, other than a stepping stone onto the US market its hard to see why FCA at ant price was attractive other than platform sharing for commercial vehicles which already happens.
Overall I’d guess FCA dealers are pretty happy with the status quo and excited about the future. As others have said, Jeep is super healthy and the 6th top selling name plate in the US. That’s something nobody would have predicted even a decade ago. Add a larger three-row and the money printing machine will continue. I’d say more than half the Gladiator sales came at the expense of Wrangler and a few but the minority came at the expense of other existing truck lines. It’s a logical brand extension and long overdue. Note that all Wranglers got a fairly significant cost increase with the new model, while sales volume may in fact be lower, I’d guess that the overall revenue generated is quite a bit higher.
Fiat, well, the 500 being done is probably no big loss, it couldn’t have been super profitable and the others are all built on combo assembly lines with other products, i.e. at this point not hugely costly to keep.
Alfa was originally envisioned by Sergio as somehow being able to go head to head with Audi. Now, the anticipated timeline on that was a bit suspect from the beginning, the reality is that there is no way that was going to happen in the first few years, if that’s something they still want, I’d guess it’d be a decade or two with consistently good product. A couple of stumbles out of the gate didn’t help there (maybe they shouldn’t have led with a race-bred engine and complex electronics on the very low volume upper trim RS/M/AMG competitor) but kudos for trying I suppose. Everybody had written Audi off thirty years ago and while there are still plenty of haters in regard to reliability etc, look at them now. So who knows, maybe (hopefully) it’s a long game. The world would be a poorer place without Alfa in it, just like Saab.
Dodge and Chrysler, let’s face it, sell on price, there is little brand equity and very little in common with the Dodge and Chryslers of two generation ago. Sure Dodge has some incredible machines in their portfolio (and I can’t say any of it is objectively “bad”, but I’d guess for every one Hellcat that sells for $70k or whatever it is, there are fifty V6 Challengers that go into a rental fleet somewhere, same with the Charger and 300. If they’re making money, good for them, seems like easy pickings, as long as money ours in, why not.
RAM is just going to get more popular, the interiors are first rate, and while there are plenty who for whatever reason still have issues with RAM’s engines (it’s not 1980 anymore), the V6 Pentastar is a gem and the 5.7 and 6.4 Hemis seem to go the distance. And if not for some reason, there are tons of spares available. There has to be a reason that RAM’s HD line has better resale value than the others, I doubt it’s due to being bad products, it doesn’t work that way generally. Note that with the very muld hybrid start assist system on some of the RAM’s, RAM is actually in the lead as far as electrification goes on trucks. Sure, GM had hybrids a decade ago but cancelled them for whatever reason. And yes Ford will have an electric 150 soon(er or later). Ram’ll be right there, plenty of people even on here seem to be worried of full electrics and even still hybrids.
I hope they DON’T rebadge the PSA stuff as Dodges, a lot of it is good stuff and should/could succeed on its own merits. And if it’s really no good for whatever reason, putting a Dodge sticker on it isn’t going to magically make that change.
Dodge and Chrysler, let’s face it, sell on price, there is little brand equity and very little in common with the Dodge and Chryslers of two generation ago.
After the flurry of articles about “huge discounts available on FCA products”, due to a supposed overstock condition, I started watching for FCA ads to see if their entire advertising program for Christmas was this “huge discount” meme of advertising dressed up as news.
Over the holidays, I saw one Ram ad, several times and one Jeep ad, several times. I even saw an Alfa ad a couple times. I saw *no* ads for Dodge, Chrysler or Fiat, like the company isn’t even trying to sell those brands anymore.
The real problem for FCA is the merger isn’t expected to close for a year, so the company is pretty well paralyzed, waiting for Tavares to take the reins.
Speaking of Audi, I spotted this French article about Audi as well as BMW and Mercedes 2019 sales and it seems they hit a bumpy road. https://www.leblogauto.com/2020/01/production-automobile-allemande-grave-chute-deux-ans.html
I’d be curious as to how heavily the zombie cars were discounted to finally move them. I am a Mopar man but if someone offered me a Chrysler 200 in 2020 there’d better be some serious discounting involved for me to even think about it.
Indeed. Like, who would buy a brand new 5+ year old Dodge Avenger (they went out of production in 2014)? Why would a dealership even stock a car for that long?
A sample of three is not research but if the Compasses owned by a friend and neighbor and a Grand Cherokee owned by another friend are representative of FCA quality it is amazing they sell anything. Neighbor just traded a less than one year old Compass for a new Ford Escape Titanium (beautiful car, hope it does well for him). Friend traded her Compass for a CRV and is delighted to be able to drive places at night without fear of being stranded on a regular basis. The GC owner is holding on but has a spreadsheet full of repairs done under a warranty now expiring…
I’d say FIAT and Alpha have negative brand equity.
and the whole merger w/ PSA was about paying the Agnelli family a special dividend – making them the winners
Chrysler got nothing out of the FIAT takeover – FIAT milked Jeep and RAM to support their crap brands and I suspect it will be the same w/ PSA
Chrysler got to live another day via the Fiat takeover. From all indications in Rattner’s book the other option was liquidation.
Yeah, I too look at that as a huge win for Chrysler and anyone receiving a paycheck from them compared to being unemployed. Looking at the current sales numbers and apparent profit level it was an excellent decision all around.
While we’ve been discussing the decline of Alfa sales over the past few months, I’m finally starting to see them on the streets with some regularity, though still infrequently. Though when you consider their sales over the last few years vs Maserati over the past decade or so, it’s no surprise that there seem to be more Maseratis on the roads. And while I’m ever so lightly thinking about an upgrade to a full-size from my Tacoma, I am actually including RAM in that thinking. Something that would have been inconceivable a few years ago.
Here’s your Huckleberry 🙂 : https://www.curbsideclassic.com/blog/new-cars/cc-review-2019-ram-3500-limited-crew-cab-4×4-some-rams-are-bigger-than-others/
Chrysler and Dodge need new product, soon, but they still have brand equity in the USA. Fiat and Alfa Romeo don’t have hardly any. Citroën and Peugeot have none. Chrysler and Dodge are worth investing in. From a corporate view it is easier to revive them than put them down.