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THE GUARDIAN www.ngrguardiannews.com
Friday, June 6, 2014
Jeep: An unlikely 2014 sales hero IAT Chrysler Automotive’s FJeepgoals for expanding the brand this year and beyond are ambitious, for sure. But if Jeep keeps tacking on the kind of monthly sales comparisons that it has achieved so far this year, the company’s iconic utilityvehicle marque will be well on its way to reaching its bold aims. This week Jeep reported its best-ever sales month in the United States with a 58-percent year-over-year increase in May, which marked the third consecutive month in which Jeep set its all-time monthly sales record. The brand is way ahead of its pace from last year; for all of 2013, Jeep sold 490,000 units in the United States, up only 3 percent from a year earlier, and 732,000 worldwide. Clearly, reaching CEO Sergio Marchionne’s goal of 1 million global Jeep sales this year is within reason. If the brand continued for all of 2014 the proportional lead in U.S. sales that it has enjoyed through May over last year, Jeep would end the year with nearly 775,000 sales in its home market alone. Unlikely hero?: 2014 Jeep Compass. Jeep has been performing so
well this year in large part because of an increasingly optimized product line that relies on the flagship Grand Cherokee, whose sales were 13 percent ahead of 2013 through May; the iconic offroad nameplate, Wrangler, with sales ahead by 18 percent; and a revival of the Cherokee, a vast improvement over the Jeep Liberty it essentially replaced, and contributor of nearly 16,000 sales so far this year compared with just 200 by a fading Liberty last year. More impressive, however, might be the sales performance of the two hoary vehicles in the Jeep lineup: Compass and Patriot. The 2014 versions of each of the small SUVs gained little from the year before, mainly a newly optional six-speed automatic transmission to replace continuously variable transmissions in most models. Both nameplates are due to be replaced in 2016 with a single new model. But while they’re not ideal entrants, Jeep finds Compass and Patriot occupying the brand’s place in one of the hottest segments of the U.S. automotive market these days, so the company is trying to make the most of what
The front grill of a 2014 Chrysler Jeep Cherokee Trailhawk is seen on display outside Chrysler World Headquarters during the FCA Investors Day in Auburn Hills, Michigan. it’s got. And that has brought a big emphasis on making these vehicles — whose fixed costs presumably have been amortized long ago — as price-competitive as possible. Thus, both were named last month to Kelley Blue
Book’s annual list of the 10 most affordable SUVs. And both Patriot and Compass have contributed significantly to Jeep’s surge this year, with Compass sales up by 28 percent for the year to date, to nearly 28,000
units, and Patriot sales up by 18 percent, to more than 37,000 units. Their performance so far in 2014 has come on top of solid year-over-year sales gains for all of 2013 as well. Marchionne has staked
much on stoking explosive growth in Jeep sales in the U.S. and worldwide over the next few years. Jeep’s performance so far this year in its home market is an encouraging sign.
GM beats estimates for May sales as U.S. housing returns ENERAL Motors Co. (GM) question there’s a correlation G posted its best month of between housing starts and U.S. auto sales since before the pickup sales.” collapse of Lehman Brothers, joining other automakers reporting deliveries in May that exceeded analysts’ estimates on demand for pickups and sport-utility vehicles. GM’s sales, helped by redesigned Chevrolet Silverado pickups and Cadillac Escalade SUVs, rose 13 percent to 284,694, the Detroit-based automaker said today in an e-mailed statement. That beats a 6.4 percent increase projected by the average of analyst estimates, showing that consumers weren’t scared off by recent small-car recalls. Ford Motor Co. (F), Chrysler Group LLC, Toyota Motor Corp. (7203), Honda Motor Co. and Nissan (7201) Motor Co. also reported better sales than analysts had predicted. Industrywide sales rose 11 percent to 1.61 million light vehicles, researcher Autodata Corp. said in an e-mailed statement. That topped the average analyst estimate for a total of 1.54 million. The annualized pace, adjusted for seasonal trends, rose to 16.8 million, the highest since February 2007. Low interest rates kept customer payments attractive and helped spur housing activity. “We’ve had a lot of pent-up demand from the first quarter that was pretty soft because of weather conditions,” said Michelle Krebs, an analyst with researcher AutoTrader.com. “There’s no
GM with its new pickups, Ford with SUVs and Chrysler with its Jeep brand were able to take advantage of a rising market buoyed by improved housing starts. The pace of U.S. home construction jumped in April to its highest level since November. Housing starts climbed 13.2 percent to a 1.07 million annualized rate following March’s 947,000 pace, the Commerce Department reported on May 16. Permits for future projects increased, a sign activity might accelerate in coming months. GM rose 1.1 percent to $35.26 at the close in New York, narrowing the discount investors pay for its earnings relative to other consumer discretionary companies. Ford gained 0.7 percent to $16.55 after earlier reaching $16.72, the highest intraday price since January. “The momentum we generated in April carried into May, with all four brands performing well in a growing economy,” Kurt McNeil, GM’s U.S. vice president of sales operations, said in the statement. The month marked GM’s best May in seven years and best since August 2008, the month before Lehman Brothers Holdings Inc. filed for bankruptcy. Gains by GM suggest consumers are separating new models on the lot from the older small cars that make up the company’s 2.59 million recalled vehicles linked to at least 13 deaths.