Blog
Photography By: 
FCA Image

Brand sinks 4 percent overall – Fiat Chrysler gain streak ends at 11 months.


by Matt Konkle
Quadratec Channel Editor


The ride couldn’t last forever, right? No matter how much Fiat Chrysler Automobiles executives hoped, prayed and, perhaps, fiddled with whatever lucky charms they have locked away in their Auburn Hills, Michigan North American headquarters.

No, the ride was destined to end at some point and it came to an abrupt halt in February, with FCA recently announcing its monthly sales dropped two percent against the same month last year. Not only that, but the Jeep brand itself toppled four percent and previously white-hot Wrangler dipped nearly six percent. The February sales retreat was FCAs first in 11 months.

Contrast that with January, where Wrangler soared 11 percent, and the question looms – what exactly happened in a month? Could the pending release of Jeep’s next biggest thing – the Gladiator – be a factor? Or is it something much more troubling for FCA like Jeep market saturation?

Realistically, there are a variety of issues that could be attributed to the year-over-year sales drop. And FCA, in fact, decided to cite some of the larger ones when focusing on February’s performance.

"The overall industry is starting off slower due in part to weather, the U.S. government shutdown and concern over tax refunds,” FCA Head of Jeep Sales Reid Bigland said in a statement. “We still see a strong, stable economy and anticipate any lost winter sales will be made up in the spring."

FCA also said in a release that they believe the February results are a sign of the Jeep Wrangler returning to ‘normal’ sales numbers now after benefiting from both new and older Wrangler production last year.

But dig a bit deeper, though, and those Gladiator and saturation questions begin to show merit.

For example, FCA began the year with a 116 days-on-hand Wrangler inventory level. That number, according to Automotive News, spiked to 166 in February as Toledo continued to crank out Wranglers at a high rate even though demand began to sputter.

For its part, FCA says that production schedule is the result of a calculated decision designed to keep supply high this spring. The company is planning to shut down Wrangler production lines at its Toledo North assembly complex sometime during the first half of this year in order to retool for the upcoming all-electric Wrangler. Once that is over, FCA says it expects inventory levels to level out.

“We’re going to continue actions to manage dealer inventories in Q1 and Q2,” said FCA CEO Mike Manley said during an earnings call earlier in February. “By the end of the first half, I expect our retail days of supply to be in line with our sales run rate.”

Another reality though could be the vehicle’s pricing as JL Wranglers carry a price tag significantly higher than previous models. That has not been a problem so far, but with over 240-thousand sold in the past year, it is possible the vehicle’s remaining audience could be more price sensitive than earlier buyers.

“I have the largest Wrangler supply I have ever had,” a salesman at a mid-western dealership recently told CarBuzz. “That (Jeep) has gone up in the last three years $12,000! These freakin’ things are $55,000 now. I think that vehicle is price-sensitive, and I think they went a little far with the pricing. They are a little aggressive.”

“When the rep calls up and says, ‘I’ve got 20 Wranglers,’ typically you’d say, ‘Send them.’ Now you’re saying, ‘Don’t send them,’ ” said another dealer representative to Automotive News. “This has been going on for a few months. It’s a trailing effect. Sales slow up, but production doesn’t.”

And then there is the looming Gladiator release.

Buzz for Jeep’s newest truck has only grown since its media release last November, even though important things like cost and availability are still up in the air for potential buyers.

Currently, order banks are rumored to open until sometime in April with a possible June production start date. That means, if the schedule goes as planned, Gladiators would not start trickling out until July; about a month later than projected.

Still, even without pricing and solid availability, there are buyers holding off on purchasing a Wrangler to see how well the truck performs. It worked the same way earlier last year when the JK Wrangler was winding down. Many interested in seeing the new JL held off their purchasing decisions which led to month after month of slower Wrangler sales until the JL finally reached dealership lots.

While this is not something FCA has specifically planned for this time around, the company seems to recognize a percentage of Wrangler buyers may swap over to the truck once the vehicle is available.

"We looked and tried to do as much work as possible to see if we felt that there would be large percentages of substitution between the two vehicles. In our plans, we’re expecting somewhere in the order of 10 to 15 percent." Manley said. "As I think about combined volume going forward, that really gives some illustration of some people moving from Wrangler to Gladiator. In terms of where volumes can go, I have no doubt that given the reception we’ve seen on Gladiator, that the production we have this year will be quickly taken up by our dealers, and hopefully, we’ll see them take it up equally fast when it arrives.”

Top Jeep Articles

Blog
Quadratec September Jeeps & Java To Have Photo, Winch Classes
  • Matt Konkle
  • August 14, 2019
Join us Sunday, September 8 for our next Jeeps and Java, and grab some great photography tips, as well as winch and recovery advice.
IMAGE GALLERY
2019 Topless for Tatas - Rausch Creek
  • Matt Konkle
  • August 12, 2019

Blog
Seven Reasons I Bought A Power Tank System For My Jeep Instead Of A Compressor
  • Scott Ammerman
  • July 26, 2019

Faster and more reliable than standard air compressors, Power Tank systems have many additional uses that should make it a 'go to' setup for any off-road Jeep driver.

Reference
Installing an AEV Heat Reduction Hood, Kentrol Stainless Hood Latches And Mechanical Hood Catches
  • Scott Ammerman
  • July 24, 2019

AEV's Head Reduction Hood is a perfect way to help your engine run cooler during the hot summer months, while Kentrol's stainless hood catches and mechanical latches make a perfect compliment.

IMAGE GALLERY
July 2019 - PA Jeeps All Breeds Jeep Show
  • Matt Konkle
  • July 22, 2019

YORK, PA—Hot, muggy July weather circled the York, Pennsylvania fairgrounds over the weekend like some sort of fiery albatross, but it didn't seem to dampen the spirits of all those who attended th

Reference
What is a Jeep Steering Stabilizer?
  • Matt Konkle
  • July 22, 2019
More than just an extra shock on your vehicle, a steering stabilizer helps eliminate driver fatigue as well as excessive road noise. But don't consider it a 'catch-all' application to eliminate all steering problems.
Blog
2019 PA Jeeps All Breeds Jeep Show Offers 'Something For Everyone'
  • Matt Konkle
  • July 17, 2019
24th annual event will have Jeep vendors, show-and-shine, obstacle course, food vendors, kids' activities and $20k in raffle prizes.
IMAGE GALLERY
July 2019 Jeeps & Java
  • Matt Konkle
  • July 17, 2019

Nice weather once again prevailed for this July's edition of our popular Jeeps & Java event, which helped bring a full house of vehicles to our West Chester, Pennsylvania headquarters.

Reference
How To Determine The Correct Jeep Upper Door
  • Matt Konkle
  • July 16, 2019
Replacing worn or damaged upper doors is a necessity to keep out the elements, but which one is best for your needs?