TTAC News Round-up: The Chrysler 200 Was More Unpopular Than Anyone Imagined

Matt Posky
by Matt Posky

There is something sincerely wrong with Fiat Chrysler Automobiles’ math, although things are starting to add up for why some of its sales numbers were so inflated.

That, Ford decides to get a little less global at the expense of the small car, Hyundai pays the price for lying, and parts suppliers see doom and gloom on the horizon for the automotive industry… after the break!

FCA sales numbers are a calculated mess

Automotive News reports that FCA’s sales recount came back with a massive discrepancy for the soon-to-be-dead Chrysler 200. Already under investigation by the SEC for the way it reports sales, this variance is suspect, as FCA had so much riding on the 200’s success.

According to Automotive News:

With three months of restated monthly sales totals on the books and a fourth due this week, the totals show FCA’s midsize sedan was far less popular than originally reported. During the three-month period encompassing July, August and September 2015, FCA US originally reported that it sold 21 percent more Chrysler 200s (8,577 vehicles) than the restated numbers it now claims are accurate for the period show.

Of the 25 nameplates for which it reported sales in July, August and September of both 2015 and 2016, the automaker now says that it over-reported sales of 14 nameplates and underreported sales of 11. The total deviation for the period: 7,547 vehicles. That means FCA originally reported 7,547 more vehicles in its monthly sales reports in July, August and September 2015 but later disavowed those figures under its revised 2016 sales methodology.

Dave Sullivan, an analyst with AutoPacific, explained to AN what made the 200’s numbers stand out. “There was a lot of pressure on the 200 to offset the loss of sales from discontinuing the Dodge Avenger,” Sullivan said, recalling the $1 billion FCA invested in the Sterling Heights Assembly Plant to build the sedan. “FCA was under pressure to deliver a midsize car that could compete with the Accord and Camry after they emerged from bankruptcy. They were vilified for not offering competitive cars after we saw gas spike to $4. The 200 was meant to show how FCA was committed to offering passenger cars that could compete.”

That pressure could be the key behind the large discrepancy between the original and restated Chrysler 200 sales numbers.

In August, company CEO Sergio Marchionne explained the ongoing sales assessment issue by claiming the automaker had inherited its reporting system (and subsequently failed to alter it) when Fiat took control of Chrysler in 2009. As for FCA’s promise to replace the 200 and Dodge Dart in dealer fleets after FCA stops building both, Marchionne said he had “nothing to announce.”

Ford goes less global

Despite expressing continued faith in the One Ford policy last year, Ford’s global design chief Moray Callum told Autocar that the concept has “peaked.” Callum specified that the global method isn’t being abandoned, though future models will be tailored more to individual regions.

The company’s One Ford plan — consolidating dozens of platforms into a globally-friendly handful — always included the option for models to be tailored somewhat to individual markets. The future changes that Callum referred to will be more than just a few tweaks, especially for vehicles that receive less love in specific regions.

Callum says the next Focus will likely be different depending on the market. “It’s an entry-level model in the US, but not in Europe,” he said. “They will be visually similar but there will be less content for the US model.”

Autocar says that in addition to a reduced level of standard equipment, the upcoming U.S. Focus could also feature a “less sophisticated” suspension, given that the need for strong driving dynamics isn’t hugely important in that vehicle class. Ouch. While it may not make sense to pour money into a stalled segment, this is throwing the baby out with the bathwater.

Whether this means we’ll eventually have more unique models by region is debatable. Most likely, we’ll see certain platforms receiving market-based favoritism. Ford knows that entirely abandoning its global stratagem would be a mistake. One Ford allowed the Mustang to become the world’s best selling sport coupe last year and many have attributed the program to keeping Ford competitive during the recession. It sounds as if Ford is simply unwilling to pump any additional money into small cars for the U.S. market.

Hyundai pays $41 million for fuel economy fibbing

Hyundai has announced it will pay $41.2 million to 33 states and the District of Columbia in a settlement related to the unrealistic fuel economy ratings initially provided for its 2011-13 model year lineup. According to The Detroit News, the settlement does not include any admission of wrongdoing or legal violation, just that the money will go to settle the states’ consumer protection claims and to cover investigative costs.

In November 2012 Hyundai issued a voluntary adjustment of fuel economy ratings for roughly a quarter of its 2011-13 model year vehicles. The adjustment decreased their combined fuel economy by roughly 2 miles per gallon. The company also offered a lifetime reimbursement program to compensate anyone who had purchased one of the affected models.

After the introduction of a class action lawsuit in 2013, Hyundai began offering a lump sum cash payment to customers who didn’t want to go to dealerships to get their mileage verified for the reimbursement program.

Parts suppliers see trouble ahead

According to a recent survey conducted by the Original Equipment Suppliers Association, automotive parts suppliers are growing increasingly worried about a possible industry downturn. Automotive News reports that many suppliers think that U.S. consumers are holding back on their spending. Some suppliers are concerned with lower than anticipated sales of specific vehicle models and slowed growth of certain segments. There are even those who have expressed apprehension about November’s U.S. presidential election and the impact it may have.

Automotive News writes:

The OESA Supplier Barometer Index has provided a pulse-check on the business outlook of the organization’s 430 member companies every quarter since 2006. The index gauges their outlook on industry health and asks what specific concerns they have. Suppliers are often an early indicator of market conditions since they are on the advanced edge of automaker planning.

The October query put the North American supply base at a score of 48 out of 100 on the index — down from a 50 in July. Charles Chesbrough, OESA chief economist, said the seemingly small drop puts the industry sector into a “pessimistic” category.

“A score below 50 suggests suppliers have a negative view on their company’s business outlook,” Chesbrough told Automotive News. The index level of 48 is the gloomiest outlook the supplier industry has evinced since 2012, when global production disruptions followed the 2011 Japanese earthquake and tsunami.

[Images: FCA; Ford Motor Company; Hyundai; By Siyuwj/ WikimediaCommons ( CC BY-SA 3.0)]

Matt Posky
Matt Posky

A staunch consumer advocate tracking industry trends and regulation. Before joining TTAC, Matt spent a decade working for marketing and research firms based in NYC. Clients included several of the world’s largest automakers, global tire brands, and aftermarket part suppliers. Dissatisfied with the corporate world and resentful of having to wear suits everyday, he pivoted to writing about cars. Since then, that man has become an ardent supporter of the right-to-repair movement, been interviewed on the auto industry by national radio broadcasts, driven more rental cars than anyone ever should, participated in amateur rallying events, and received the requisite minimum training as sanctioned by the SCCA. Handy with a wrench, Matt grew up surrounded by Detroit auto workers and managed to get a pizza delivery job before he was legally eligible. He later found himself driving box trucks through Manhattan, guaranteeing future sympathy for actual truckers. He continues to conduct research pertaining to the automotive sector as an independent contractor and has since moved back to his native Michigan, closer to where the cars are born. A contrarian, Matt claims to prefer understeer — stating that front and all-wheel drive vehicles cater best to his driving style.

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  • Theoldguard Theoldguard on Oct 31, 2016

    My Focus was a great car---except of course the PowerShud-d-d-er transmission. After renting a Mazda 3 for a week, I thought the Focus handled just as well. The Mazda did have a better transmission, for sure. I always thought 200 was a very handsome car. I wish it had sold better. American styling is to me much better than that of Japanese. My next car will probably be a Civic, but it still looks a little weird to me.

    • JohnTaurus JohnTaurus on Nov 01, 2016

      I too thought the 200 was/is a good looking car, too bad its a terrible one underneath. A friend (woman in her 80s) bought a new Focus hatch last year. I asked he how she liked it. She said she loved it over her previous Chevy Sonic sedan, but had nothing else to say. Yes, its an automatic, but she evidently had no complaints.

  • HotPotato HotPotato on Nov 02, 2016

    Haven't we been here before? In 2000 Ford gave Americans their great-driving (if unreliable) Euro Focus. In 2004 Europe got a new improved Focus, but Americans did not. In 2007 Europe got a newer improveder Focus, and Americans got a terrible re-hash of the existing car, appallingly cost-cut and execrably restyled. Oops, turns out people don't just buy on price, not when Asian competitors exist! in 2011 Americans got the good "new" Euro Focus. (Which, as before, drove great and wasn't reliable.) But at least the regrettable 2007 US model kept the original Euro chassis. If Ford is going to ditch the road manners to save a few bucks, they are going to have some unhappy customers. Whether they realize it or not, Ford is the new VW: people are paying a little more for their products than they would for the competition, and buying them even though Consumer Reports warns they're going to break, *because they drive nicer.* Leave it to an American CEO to be totally oblivious to his own company's competitive advantage, and eliminate it in a short-sighted attempt to cut costs.

  • Varezhka I have still yet to see a Malibu on the road that didn't have a rental sticker. So yeah, GM probably lost money on every one they sold but kept it to boost their CAFE numbers.I'm personally happy that I no longer have to dread being "upgraded" to a Maxima or a Malibu anymore. And thankfully Altima is also on its way out.
  • Tassos Under incompetent, affirmative action hire Mary Barra, GM has been shooting itself in the foot on a daily basis.Whether the Malibu cancellation has been one of these shootings is NOT obvious at all.GM should be run as a PROFITABLE BUSINESS and NOT as an outfit that satisfies everybody and his mother in law's pet preferences.IF the Malibu was UNPROFITABLE, it SHOULD be canceled.More generally, if its SEGMENT is Unprofitable, and HALF the makers cancel their midsize sedans, not only will it lead to the SURVIVAL OF THE FITTEST ones, but the survivors will obviously be more profitable if the LOSERS were kept being produced and the SMALL PIE of midsize sedans would yield slim pickings for every participant.SO NO, I APPROVE of the demise of the unprofitable Malibu, and hope Nissan does the same to the Altima, Hyundai with the SOnata, Mazda with the Mazda 6, and as many others as it takes to make the REMAINING players, like the Excellent, sporty Accord and the Bulletproof Reliable, cheap to maintain CAMRY, more profitable and affordable.
  • GregLocock Car companies can only really sell cars that people who are new car buyers will pay a profitable price for. As it turns out fewer and fewer new car buyers want sedans. Large sedans can be nice to drive, certainly, but the number of new car buyers (the only ones that matter in this discussion) are prepared to sacrifice steering and handling for more obvious things like passenger and cargo space, or even some attempt at off roading. We know US new car buyers don't really care about handling because they fell for FWD in large cars.
  • Slavuta Why is everybody sweating? Like sedans? - go buy one. Better - 2. Let CRV/RAV rust on the dealer lot. I have 3 sedans on the driveway. My neighbor - 2. Neighbors on each of our other side - 8 SUVs.
  • Theflyersfan With sedans, especially, I wonder how many of those sales are to rental fleets. With the exception of the Civic and Accord, there are still rows of sedans mixed in with the RAV4s at every airport rental lot. I doubt the breakdown in sales is publicly published, so who knows... GM isn't out of the sedan business - Cadillac exists and I can't believe I'm typing this but they are actually decent - and I think they are making a huge mistake, especially if there's an extended oil price hike (cough...Iran...cough) and people want smaller and hybrids. But if one is only tied to the quarterly shareholder reports and not trends and the big picture, bad decisions like this get made.