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FCA rides through tough sales period

Stay the course: FCA expects big things of the new Jeep Renegade and its forthcoming sister, the Fiat 500X (pictured), while a change of focus from mass sales to sustainable growth is being put in place.

Softening sales across FCA brands point to more stable, sustainable future, says CEO

16 Oct 2015

FIAT Chrysler Automobiles (FCA) Australia president and CEO Pat Dougherty is not concerned about softening sales across the company’s brands – Chrysler, Jeep, Dodge, Alfa Romeo and Fiat – despite downward turns of up to 49 per cent in a growing market.

Mr Dougherty told GoAuto that more aggressive tactics from rivals and a volatile Australian dollar were partly to blame for the downturn, which currently touches all of the company’s passenger vehicle lines with Chrysler sales down 49.2 per cent to the end of September, Alfa -39.7 per cent, Fiat -26.2 per cent, Dodge -18.1 per cent and its all-important Jeep brand -9.4 per cent.

Only Fiat Professional commercial vehicles are in positive territory, up 4.9 per cent.

“(Look at) our positioning relative to the competition in the high-volume segments,” said Mr Dougherty. “The competition has been able to be more aggressive than we have. When the free-trade agreement came through for the Japanese and Koreans, a lot of them passed it on to the market.

“We didn’t have that space where we could do that, so that created a larger gap between us and them. I think that there is definitely a relationship between price and volume.”

Chrysler’s drop in sales of almost 50 per cent has occurred despite the introduction of the updated 300 large car in July. A total of 735 Chrysler vehicles have been purchased to the end of September, the vast majority of them 300s, but the 300 is nonetheless down 50.2 per cent while the Voyager people-mover is 25 per cent in arrears.

Fiat’s downturn comes as its former runaway hit, the 500, softens 20 per cent in the face of rationalised pricing. Punto and the Panda are now all but invisible, contributing less than 400 units between them to the end of September, while the Freemont SUV is down 5.0 per cent. Total Fiat car sales for the year stand at 3296 units.

The new 500X due later this year, and the refreshed 500 coming in 2016, will be looked at to improve the brand’s fortunes over the next 12 months.

Jeep’s decline, meanwhile, rests with the Compass and Grand Cherokee – the latter being last year’s star performer for the group – down 25 per cent each on 2166 and 9580 sales respectively, while Patriot has plummeted 44 per cent.

The Cherokee is holding things together for the brand, up 143 per cent with 5492 units from total Jeep sales this year at 20,078.

Alfa has contributed 1304 sales year to date, and Dodge (with the sole Journey) 990, bringing the entire stable to 27,459 units. This time last year, the group had amassed 32,454 sales.

Mr Dougherty admitted there was more pain ahead for the group.

“We believe our brands offer a unique value with the Jeep range,” he said. “We had to make a business decision, and the business decision is to try and run a good, strong business and get through what we see as a weak Aussie dollar over the next year.

“Then, as we bring new product to market, like the Renegade, and then the next offering, and the next offering, and the next offering, we start to climb back up. Grow volume again. So, there’s a little deterioration in market share.

“We want to keep our dealers in the volume, but our position right now in the market is such that that’s where we’re going to be.”

Mr Dougherty nominated the new Renegade as the start of the next era of growth, predicting that the model would become a top-three seller for FCA.

“We think it’s going to be a good volume vehicle for us,” he said. “I think the success of the product across multiple markets now tells us that we’ve got a good opportunity here. We’re not staking or hanging our whole business on Renegade, but we believe that it could grow into a significant volume for us.”

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