By on September 1, 2009

Even in the midst of an overstimulated car market there’s always an excuse for underperforming. Chrysler is blaming overzealous production cutbacks and dealer shortages for its 15 percent month-on-month sales decline in August. Grand Cherokee had a surprising 62 percent increase in sales compared to last August, while 300 sales improved 17 percent. Otherwise, sales were down across the board. The TTAC-slated Aspen dropped 83 percent. The long-in-the-tooth Durango dropped 86 percent. And Challenger sales continued their freefall, falling by 45 percent.

Avenger sales improved by 16 percent to 4,118 units. Its Sebring sibling fell 39 percent to 2,514. Compass was down 11 percent, Patriot was down 34 percent, and Caliber held steady at zero percent (as did PT Cruiser). The Journey CUV’s sales rose three percent. Dodge Caravan sales ascended by 13 percent—a surprising showing considering the Chrysler T&C dropped 26 percent to 7,530. Charger was down 20 percent. Jeep’s resilience was tested as well. The usually-reliable Wrangler sales fell for the second month in a row.

The major lesson of August: Chrysler is an extremely damaged brand. Out of the house brand’s lineup, only the outdated 300 and PT didn’t die a death.

Chrysler now faces a challenging decision: increase production to fill in the gaps caused by Cash For Clunkers and risk returning to the bad old days of channel-stuffing and sales banks, or run the chance of not having the few models consumers will consider. Which cup of hemlock is it to be? After all, August sales were as redlined as they could be….

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19 Comments on “Chrysler Sales Drop 15 Percent...”


  • avatar
    OldandSlow

    A.) I wonder how the closing Jeep dealerships this year is affecting the Wrangler.
    B.) Were people really that desperate for a $4,500 government credit that they bought an Avenger?

  • avatar
    Logans_Run

    Talking head from Edmunds said on FoxBusiness today that sales volume has tanked since end of C4C. And what is Goldman smoking thinking that we are back to a 16 million SAAR?

  • avatar
    CyCarConsulting

    I would not want to be planning production after a C4C bonanza, back into the recession. Toyota who normally gets it right, were way over pessimistic about this years production. Even before C4C, dealers were begging for more cars.

  • avatar
    ajla

    I do think some of the Patriot dropoff is attributable to inventory woes, but Chrysler can’t be happy at all to see that 30% drop off in Ram sales.

    With the Challenger, I don’t know anymore. There does still seem to be some inventory problems, and dealers aren’t very willing to negotiate on them just yet, but it’s still just not a world-class product. Chrysler needs to improve it. I can’t see the current version really ever selling much over 2400 units in month.

  • avatar
    twotone

    “Low inventory” = we built the wrong vehicles. Quite a few Chrysler vehicles on dealers lots that one one wants.

    Twotone

  • avatar
    Hippo

    IMO people want the Wrangler, but the cost of a properly equipped one (Rubicon) is stratospheric for what it is. They priced themselves out of the market.
    At this point one can have an older jeep built from the frame up with all the toys for less then a new one saving the tax hit.

  • avatar
    jaje

    Chrysler – thank heaven for 7 or 11.

  • avatar
    panzerfaust

    Chrysler didn’t have the low end cars that would have fit into the CFC buy, and the high end cars just are too expensive or seem extravagant in these times (Charger/300). What do they have that compares to the Focus, or the Cobalt? I think its the Caliber thats the smallest car Chrysler makes; but they’re so oddly unmemorable. The Avenger I guess is the counter to the Fusion and Malibu but it too has this air of being a of rolling design anomally; clumsy attempts to carry through the Ram theme on the outside and as interesting as an empty tupperware bowl on the inside. And unlike GM it doesn’t even have morbid domestic loyalty going for it.

  • avatar
    Ryan

    I am shocked that Chrysler sales were “only” down 15%. Lack of inventory? Riiiight… Try lack of quality and substance.

  • avatar
    Buick61

    Ryan :

    I am shocked that Chrysler sales were “only” down 15%. Lack of inventory? Riiiight… Try lack of quality and substance.

    Ryan, they have 28 days of inventory left, and that’s the hot sellers with the slow sellers, so, yes, they did run out of inventory.

    Chrysler hasn’t had this few cars to sell since 1945-46.

    It’s also of note that Chrysler is still selling very, very few cars to fleet. The PT Cruiser might have been flat overall this month, but sales to retail customers were actually up 100%…

  • avatar
    rpiotr01

    Agree with the comment about the Wranglers. They could move them far better if they weren’t so overpriced right now or if they had enough supply where customers could negotiate better.

    It’s true the drop would have been smaller or non-existent if they had a better assortment of small cars to qualify for CFC, but you simply can’t discount the supply issue. They really didn’t have much to sell. And by that I mean of the vehicles that people actually wanted to buy, there really weren’t many available.

  • avatar
    highrpm

    I hate to say it, but I just can’t see these guys making it through another five years.

    No new products coming for years. Horribly uncompetitive current vehicles.

    I can’t see how Fiat can save them from Chapter 7.

  • avatar
    RedStapler

    Hippo is on to something with his post on the current Wrangler competing with its predecessors.

    My local Chrylser Jeep Dealer has gone from having the lot bursting at the seams and using a sister stores back 40 for storage 2 years ago to running quite lean for its sales today.

    I can purchase a used TJ (97-06) or YJ (87-96) Wrangler and spend $4-6k to make it just as good or better as the current JK is off road. The Wrangler rivals the Toyondaru when it comes to depreciation resistance.

    I wonder who will wind up with Jeep after the Fiatsco.

  • avatar
    FreedMike

    Ryan :
    September 1st, 2009 at 4:39 pm

    I am shocked that Chrysler sales were “only” down 15%. Lack of inventory? Riiiight… Try lack of quality and substance.

    No, it’s true. Remember, they had their plants shut down for something like two months during the BK, and C4C came out right after that.

  • avatar
    FreedMike

    A couple of thoughts…

    1) There’s no sport left in bashing Chrysler…it’s not even fair anymore.

    2) The dropoff in Challenger sales is probably due to the introduction of the Camaro more than anything else. This particular market segment is incredibly fashion-conscious, and the latest and greatest design tends to sell hot for a while, then cool off. The redesigned Mustang is also down sales-wise.

    3) Rams aren’t the only full size pickups not selling – if I’m not mistaken, the F150 is also down, and the Toyota Tundra is down something like 50%.

    4) Ditto for large/full size SUVs, which explains the Grand Cherokee.

    Nevertheless, I don’t see a lot of light at the end of the tunnel here, at least until they can start selling some Fiat product. I think Fiat anticipated this, and my feeling is that unlike Cerebus, they’re in a position take some losses until that time. In the meantime, expect them to rework interiors and improve quality so that they’re well positioned when the new product hits. That’s about all they can do.

  • avatar
    ajla

    @Freedmike:

    -The Mustang is still selling at around 6000+ per month. That doesn’t beat the Camaro, but it’s still quite respectable especially compared to the recent dismal sales of the Challenger. The Mustang has also received some decent accolades from the buff books and online publications while the Challenger is quickly becoming the perennial also-ran against all competitors.

    -F-series sales were actually up. Silverado/Sierra and Tundra sales took a nosedive even worse than the Ram. Even though I don’t work for ChryslerCo, I’ve still got to believe that with the recent redesign they were hoping to keep sales losses under 25%.

  • avatar
    cpmanx

    It’s really tough to make a meaningful read on sales from this weird, weird month. Both Chrysler and GM were affected by inventory problems from their shutdowns during bankruptcy proceedings. GM’s numbers were also hurt (and Ford’s helped) by comparison with a year-ago month when GM was doing a blowout sales extravaganza. All three “domestic” companies are scrambling to cut back on fleet sales.

    That said, Chrysler is going to be in a terrible position for the next 18-24 months until the first of the Fiat-derived cars show up. The only major new products in the pipeline are the new Grand Cherokee and the facelifted 300/Charger, both of which are hitting the wrong segments for major growth (although they are getting pretty good advance notices). Weak Ram sales are a particularly worrisome sign, given that Ford actually saw a 12% increase with the F-150.

    Right now the Fiat folks seem to be focused on improving interiors, shoring up quality, and cutting costs–all reasonable but stopgap measures intended to keep the company viable until we find out if there really is a market for Americanized Fiats.

  • avatar
    timd38

    The public has figured out the Chrysler products stand for poor quality and even poorer reliability.

    Fix it again tony (FIAT) as true meaning now that they run Chrysler.

  • avatar
    Roundel

    If Chrysler had more Calibers, PTs, Avengers and Sebrings on the ground, they would have sold more.
    All because of their double cash offer.
    There is not one of these vehicles to be found new on a lot within 100 miles of me.
    If they didn’t shut down those plants, the numbers would have been quite different I think.

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