Meh, Let's Try It GM's Way, Says Fiat Chrysler
Debt-heavy Fiat Chrysler Automobiles could do with some more spending money, so why not try something new?
Figuring it can squeeze more money out of its products — and boost its stock — if it focuses less on volume, FCA has embarked on a new sales strategy that isn’t new in the industry. Call it the General Motors Approach.
Imitation, as they say, is the sincerest form of flattery.
October was a tug-at-your-shirt-collar month for the auto industry, with overall sales down 6 percent in the U.S., though FCA had it worse. The automaker’s sales slid 10 percent due to heavy losses at Chrysler and Dodge.
There’s more to FCA’s dismal sales month than meets the eye, Bloomberg reports, as the automaker slashed its fleet sales in the hopes of generating more profit through retail transactions. With the industry entering what looks to be a sales slump of undetermined length and severity, large numbers of low-profit fleet sales aren’t good for any automaker.
GM made a big deal about handing over fewer vehicles to fleets and rental agencies, and FCA clearly took note. That strategy seemed to have worked as the General posted record earnings in the last quarter and boasted a much more stable share price. FCA’s earnings rose 29 percent during the third quarter of 2016.
According to Bloomberg, FCA’s fleet deliveries dropped 23 percent in October. Meanwhile, GM trimmed its deliveries to rental companies by a further 19 percent while boosting the number of fleet vehicles sold to higher-profit commercial and government operators.
Despite the growing trend, fleet sales are still up 8 percent this year, according to Mark Wakefield of industry consultant AlixPartners.
[Image: Fiat Chrysler Automobiles]
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We have some OEM customers that we make little money on. They keep the doors open and absorb some overhead, so we can make good money the small custom orders. Of course we don't have stock owners breathing down our necks about monthly numbers.
Poor Hertz drivers. All we have left are Nissans and Hyundais now.
FCA doesn't really make anything I want to buy. I can't afford a 50k pickup, I've seen rust on 3 or 4 year old Rams-no thank you. Not in the market for a minivan A 300? Too big for me. Most of their SUV's are overpriced for what you get....the most basic Wrangler costs 25K. Fiat? You have to be kidding me.
I've gotten two calls in the last week from my local FCA dealership practically begging me to come in for 30% off their 2015 model leftovers. Unprecedented savings apparently. Too bad they have nothing of interest for me.