The story behind Chrysler U.S. sales for August

Posted on Thursday, September 4th, 2008 at 9:07 AM EDT.

Michael Keegan
Vice President – Volume Planning & Sales Operations
The industry was down year-over-year 16 percent. That resulted in a 13.8 million seasonal adjusted rate for the month of August. So, of course, continuing the trend of being down year-over-year. But if there’s any bright spot in it – from a month-over-month perspective – if you recall last month the seasonal rate was 12.6 million units. So month-over-month there’s been an improvement in the way the month performed in terms of the annual outlook.

So that was the industry. From Chrysler’s perspective we were down 34 percent year-over-year, and down slightly sales month-over-month. Now if you recall, the month of August was the month where we announced that leasing would no longer be funded by our finance company. So leasing, which is typically accounting for 20 to 25,000 sales a month. There was still some leasing done out there by other banks, but it was less than 2,000 units. So we had – call it a 20 to 23,000 headwind of overcoming the drop of leasing. Now we’re find that the programs we are putting in place are shifting some people toward retail, which is good. That’s why were able to essentially hold our sales from a month-over-month perspective. As the dealers and our customers get more accustomed to the offers that we have out there at retail, and as the independent banks get more and more engaged in leasing, I think we’ll start to see an improvement off that as well. Both Ford and GM were also down in significant double digits year-over-year.

We have the minivan. The Town & Country was up 10 percent month-over-month. And that’s going against another headwind of a segment that’s been declining. The Ram Light Duty truck, which is in sell-down now getting ready for the great new Ram DS (1500), was up 14 percent month-over-month. So because of that great sales performance on the Ram Light Duty, we’re right in our glide path for where we want to be in terms of getting out of the inventory of the old one – gliding right into the new one that’s hitting dealer lots soon. And Wrangler, which is another great core product, was up 5 percent month-over-month as well.

Internally here you become a big fan of the Ram because we’re part of the company, but what’s really been encouraging for me as I begin to read the headlines of the some of the buff book magazines, the local news magazines, is they’re starting to test-drive that Ram vehicle and they’re describing the Ram in ways that we haven’t even described it in terms of what a groundbreaking, breakthrough product it is from a ride-handling performance, features. So we are really going to hit the ground running with the new Ram. To me it’s exceeding expectations in terms of how it’s being received and evaluated by third parties. So it’s not just us talking to ourselves. It’s third parties evaluating the Ram. As I mentioned earlier, with the sell-down that we’re now on track for the old Ram, we’ll have just enough on the ground for the people who like that old Ram style, and the new one, of course, is going to really hit the ground running.

From an employee perspective, as you’re hearing all this, I guess I’ll ask for a call to action, of sorts. As I mentioned, we saw the industry from a seasonal adjusted rate pick up a bit, so let’s get positive there. The other point is – when we talk about the new Ram coming out, educate yourself on the new Ram. Be the advocate for the new product to your friends and family. Specifically, we’ve come out in the month of September with an employee pricing offer to our suppliers and our military personnel. So if you know somebody in the military – if you have a friend or family member that works for a supplier, they now have an employee pricing offer for them. So, again, be our advocates out there – be our sales people out there, and let’s make September a great month.

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