Fiat Chrysler Automobiles‘ (NYSE: FCAU) bold bet on SUVs might be starting to pay off: The Italian-American automaker said that its U.S. sales rose 14% — reversing an 18-month streak of declines — thanks to huge demand for Jeeps.
Much of that demand came from retail buyers. An 11% retail sales gain was enough to push Fiat Chrysler Automobiles (FCA) past Ford Motor Company‘s (NYSE: F) retail sales total for only the second time since 2010. Ford’s U.S. sales rose 3.4% in March; Detroit rival General Motors‘ (NYSE: GM) rose 15.7%.
Continue Reading Below
Year to date, FCA’s sales in the U.S. are up 0.8% through March.
High and low points from FCA’s March sales results
The high points have to start with FCA’s powerhouse Jeep SUV brand, which had a tremendous month led by its all-new Wrangler and revamped Cherokee.
- Jeep sales rose 45% to 98,382 vehicles, its best monthly result ever.
- Sales of Jeep’s iconic Wrangler rose 70% to 27,829 vehicles, its best result ever.
- Sales of the Jeep Cherokee rose 63% to 23,764. That wasn’t quite its best result ever, but it’s a high number. It appears that the Cherokee’s new assembly line is now running at full speed.
- Sales of the stylish Chrysler Pacifica minivan rose 40% to 13,086.
- In what must be a sign of spring, sales of the Dodge Challenger muscle coupe rose 31% to 8,150.
- Alfa Romeo sold 2,576 vehicles, with the new Stelvio SUV nearly equaling the Giulia sedan’s total sales.
The low points:
Advertisement
- Sales of the Ram full-size pickup line fell 11% to 41,307. Although it’s never good to see a decline when Ford and GM post gains, it’s not quite as bad as it looks: FCA’s all-new 2019 Ram just began shipping in the second half of March.
- Both of FCA’s Ram ProMaster commercial-van models posted double-digit sales declines.
- Sales of the well-regarded three-row Dodge Durango crossover SUV fell 10%, and sales of its Jeep Grand Cherokee sibling declined 4%. The Grand Cherokee was the only Jeep model to post a sales decline in March.
- Fiat sales fell 47% to just 1,544 vehicles. The Italian brand’s quirky novelty appears to have faded for U.S. buyers.
The upshot: Marchionne’s plan is working, for now
CEO Sergio Marchionne was ahead of the industry in making a bold bet on SUV sales when he announced in early 2016 that the company would discontinue production of its two mass-market sedans, the Dodge Dart and Chrysler 200. Its only remaining car models are niche products with (in theory, at least) above-average profit potential: the little Fiat 500, the brawny Dodge Charger and Challenger, and the Charger’s upscale Chrysler 300 sibling.
Marchionne’s decision to abandon the mainstream sedan market set off an elaborate assembly plant shuffle. Production of the Ram 1500 and Jeep Cherokee moved to the sedans’ former factories, and the trucks’ former homes began undergoing renovation to build all-new models — more trucks and SUVs.
That plan is still unfolding, but now that Cherokee is up and running in the Dart’s former home in Belvidere, Illinois, and all-new Ram 1500s are beginning to ship from the 200’s former factory in Sterling Heights, Michigan, we’re starting to see the results: big sales gains that should drive big profit gains as the year goes on.
FCA still appears to be well behind on the key technologies that most analysts expected to drive the future of autos. But it appears exceptionally well positioned in the market that exists in the here and now. Assuming that the U.S. market remains strong, FCA’s strength in SUVs and trucks should drive outsized profit gains for at least the next couple of years, if not longer.
How FCA’s U.S. sales compared to rivals
Below you’ll find March sales totals for the six largest-selling automakers in the U.S. market. All but Nissan had sales gains to report.
Note that these totals include both retail and fleet sales.
10 stocks we like better than Fiat Chrysler AutomobilesWhen investing geniuses David and Tom Gardner have a stock tip, it can pay to listen. After all, the newsletter they have run for over a decade, Motley Fool Stock Advisor, has tripled the market.*
David and Tom just revealed what they believe are the 10 best stocks for investors to buy right now… and Fiat Chrysler Automobiles wasn’t one of them! That’s right — they think these 10 stocks are even better buys.
Click here to learn about these picks!
*Stock Advisor returns as of April 2, 2018
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford. The Motley Fool has a disclosure policy.
