Chrysler Group February U.S. Sales Increase 4% as Growth Rate Slows

Chrysler still managed to record its strongest February sales in five years in spite of changeovers. 

Chrysler Group today posted U.S. sales of 139,015 units, a 4% increase compared with sales in February 2012 of 133,521 units. While it was the Group’s best February since 2008, the overall market was predicted to grow at a 7% to 9% rate, if this holds true when final numbers are available late today, Chrysler is not keeping up with the auto sales recovery. The comeback car company has been consistently outpacing market growth, as has been Toyota Motor, which also posted a 4% sales gain.

The planned changeover of the out of production Jeep Liberty (1,500 sold or -79%) for the return of the Cherokee this fall, as well as an unexpectedly weak month for the flagship Grand Cherokee (9,400 or -26%) hurt. The on-going product launches now underway of the revised 2014 Jeep Grand Cherokee, Jeep Compass, and the new 2013 Ram Heavy Duty truck line also dampened results. The Ram pickup truck – the Group’s volume leader – increased sales 3% to 23,290, also diminishing overall results.

The trend line dip was forecast by CEO Sergio Marchionne, who said during the 2012 full-year earnings call at the end of January that Chrysler Group’s first-quarter volumes are expected to be lower than the volumes reached during the same quarter in 2012. He also surprised analysts by changing his business plan forecast for Chrysler, slashing free cash flow from $3 billion to only $1 billion for 2014, with 2013 at about half of the $2.2 billion 2012 generated, a result of Chrysler’s changing market mix and a nod to competition from the Japanese and Koreans in the U.S. He needs the cash to develop new products for Chrysler Group – more than $4 billion in capital expenditures annually – while shoring up Fiat’s shaky foundation. Fiat without Chrysler factored in the results lost more than $1 billion during 2012. (Read AutoInformed on Chrysler Group Posts 2012 Net Income of $1.7 Billion)

Nevertheless, the Dodge, Ram Truck and FIAT brands each posted year-over-year sales gains in February compared with the same month last year. The Dodge brand’s 30% increase – led by Charger and Avenger at 10,000 units each, and the all-new Dart at 8,000 – was the largest sales gain of any Group brand in February. The Ram truck sales increase was the 34th-consecutive month of year-over-year gains. It was the truck’s best February sales in six years. Sales of the Light Duty Ram pickup increased 2% while Heavy Duty Ram sales were up 14%. Two Jeeps had record-setting February sales. The Jeep Patriot compact SUV and the Wrangler each set sales records for the month of February, as did the Chrysler 200 mid-size sedan.

“In spite of a cautious ramp up of some of our most popular products which limited inventory last month, we still managed to record our strongest February sales in five years and our 35th-consecutive month of year-over-year sales growth,” said Reid Bigland, Head of U.S. Sales. “Looking ahead, we expect to get our inventory gaps corrected over the next 90 days resulting in additional products contributing to our growth.”