At NADA in New Orleans last week Jim Press painted a positive picture for Chrysler to a media roundtable, then he apparently gave an inspiring speech to his dealers and followed that with an uplifting conference call following this week's announcement that Chrysler experienced a 55 percent drop in January sales vs. a year ago and a 31 percent sales decline from December. Press also mentioned last week that Chrysler's market share of 10 percent is about where it was 15 years ago.
As in the sales Press Release, Jim Press pulled the positives, saying Jeep Wrangler sales increased 4 percent compared to January 2008, the new Dodge Journey sales continued to climb, Dodge Challenger and Avenger sales were both up 6 percent over December 2008 and the inventory level is down 13 percent compared with January 2008.
The January sales statement reads: "Total sales were suppressed by a significant reduction in fleet sales, which is aligned with the Company's sales strategy helping to maintain or improve the overall residual value of Chrysler vehicles for our customers. Fleet sales were down 81 percent for January compared to the same time last year."
At the media roundtable, Press repeated that Chrysler made a small profit in the first six months of 2008 and the second half was slammed by high gas prices, a free fall in consumer confidence and a severe credit crunch. His optimism goes as far as him saying, "2009 will be a spectacular year for us". On December 29th Chrysler received the first installment of a government "bridge loan" to the tune of $4 billion with a second installment of $3 billon expected on March 31st. Chrysler's finance company received $1.5 billion in TARP funds to help consumers get into new vehicles. Press expects to start paying the money back in 2012 on the premise that Chrysler will be "viable and remain solvent by investing in new products, marketing and dealers."
Press is bullish on the FIAT deal saying that it will accelerate fuel-efficient vehicles in the U.S., preserve jobs in America with Chrylser plants in the U.S. building FIATs and allow Chrysler dealers to sell FIATs to help sustain the U.S. auto industry. My global media friends tell me FIAT is making great cars, no longer Fix-It-Again-Tony. Press says that FIAT will invest in hardware and tooling for Chrysler facilities. The big question is how soon? A question that couldn't be answered. FIAT currently has no U.S. distribution and Chrysler's global presence is neglible compared to GM and Ford.
Another positive is that Dodge Viper sales jumped 74 percent in January to 127 from 73 a year ago as Chrysler announces that they have three possible buyers for the Viper business.
Project Genesis is the Chrysler program for reducing the size of its dealer network which currently stands at about 3,300 but Press will not give a forecast for dealer reduction categorizing the dealers into rural, secondary and metro market. Press said the rural dealers have strong market share and that was echoed by the rural dealers I spoke with at NADA who said they were happy with how the new Ram is selling.
We're in an uncertain economic environment - Press says, "if I was in a bar room brawl, there's nobody I'd rather be with than Chrysler, Dodge, Jeep dealers." The fight is going to be for the fewer than 10 million vehicles that may be sold in the U.S. this year.
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