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    September 2012: Chrysler Group LLC


    Chrysler Group LLC Reports September 2012 U.S. Sales Increased 12 Percent; Best September Sales in Five Years

    • Best September sales since 2007
    • 30th-consecutive month of year-over-year sales gains
    • Third-quarter sales up 13 percent versus same quarter a year ago
    • Chrysler, Jeep®, Dodge, Ram Truck, and FIAT brands each post sales increases in September compared with same month a year ago
    • FIAT brand sets all-time sales record with 51 percent increase
    • Both Fiat 500 and Fiat 500 Cabrio record sizeable sales gains
    • Dodge brand sales up 18 percent; best September sales since 2007
    • Sales of the all-new Dodge Dart up 72 percent compared with previous month as production ramp up continues in Belvidere, Ill. assembly plant
    • Dodge Journey sales up 41 percent; sets sales record for month of September; named a Road & Travel ‘Top 10 Pick’ in its 2012 SUV Buyer’s Guide
    • Dodge Avenger mid-size sedan sales up 89 percent; sets sales record for month of September
    • Dodge Grand Caravan sales increase 32 percent; best sales since 2006
    • Jeep brand sales increase 10 percent; best September sales since 2006
    • Iconic Jeep Wrangler and Jeep Patriot compact sport-utility vehicle (SUV) each set sales records for month of September
    • Jeep Grand Cherokee sales up 19 percent compared with same month a year ago; best September sales since 2005
    • Chrysler brand sales up 5 percent; best September sales since 2007
    • Chrysler 200 mid-size sedan sets sales record for month of September
    • Chrysler 300 flagship sedan posts best September sales since 2007
    • Ram Truck brand sales up 4 percent compared with same month last year
    • Ram Cargo Van sales up 223 percent versus same month a year ago
    • Ram Truck brand unveils new 2013 Ram 2500 and 3500 Heavy Duty pickups and 3500, 4500 and 5500 Chassis Cab work trucks at Texas State Fair

    Auburn Hills, Mich. , Oct 2, 2012 - Chrysler Group LLC today reported U.S. sales of 142,041 units, a 12 percent increase compared with sales in September 2011 (127,336 units), and the group’s best September sales since 2007.

    The Chrysler, Jeep®, Dodge, Ram Truck and FIAT brands each posted year-over-year sales gains in September compared with the same month a year ago. The FIAT brand’s 51 percent increase was the largest sales gain of any Chrysler Group brand for the month. September marked Chrysler Group’s 30th-consecutive month of year-over-year sales gains.

    “Last month marked our 30th-consecutive month of year-over-year sales increases and our strongest September in five years,” said Reid Bigland, President and CEO – Dodge Brand and Head of U.S. Sales. “Going forward with our current product line up, record low interest rates and a stable U.S. economy, we remain optimistic about the health of the U.S. new vehicle sales industry and our position in it.”

    As the production ramp up of the all-new Dodge Dart compact sedan continues in the Belvidere, Ill. assembly plant, Dart sales of 5,235 units were up a significant 72 percent in September compared with the previous month.

    While the Dodge Dart continued its steady monthly sales climb, six Chrysler Group models set sales records in September. The Chrysler 200 and sporty Dodge Avenger mid-size sedans each set records for the month of September. The Avenger achieved its record with a sizeable 89 percent sales increase compared with the same month a year ago.

    Two Jeep models – the Wrangler and Patriot – set September sales records, while a 51 percent increase earned the Fiat 500 an all-time sales record. In addition, the Dodge Journey set a sales record for the month of September demonstrating why it is the most versatile and affordable crossover in America. Sales of the Journey were up 41 percent in September compared with the same month last year.

    Other standout models in September were the flagship Jeep Grand Cherokee with sales up 19 percent, and the Dodge Grand Caravan with a sales gain of 32 percent.

    Chrysler Group finished the month with a 65-days supply of inventory (369,144 units). U.S. industry sales figures for September are projected at an estimated 14.9 million units Seasonally Adjusted Annual Rate (SAAR).

    September 2012 U.S. Sales Highlights by Brand

    FIAT Brand

    FIAT brand sales were up 51 percent in September, the largest year-over-year percentage increase of any Chrysler Group brand. The Fiat 500 set an all-time sales record in September. Sales of the Fiat 500 Cabrio were up 44 percent versus the same month last year, while the Fiat 500 recorded a 52 percent year-over-year sales gain. The Fiat 500 Turbo, the fourth model in the FIAT brand lineup, should begin hitting dealership showrooms this month touting a 135-horsepower 1.4-liter MultiAir® Turbo engine, sport-tuned suspension, track-proven brakes, dynamic exterior design and sport-styled interior.

    Dodge Brand

    Dodge brand sales were up 18 percent in September, the brand’s best September in five years and second best sales month this year. Dodge brand sales of 47,356 units represented the largest sales volume of any Chrysler Group brand in September.

    Two Dodge brand models set sales records during the month. The Dodge Journey full-size crossover, with its 41 percent sales gain, established a sales record for the month of September and was one of Road & Travel Magazine’s top picks in the competitive crossover/SUV segment. The magazine named Journey one of its Top 10 vehicles in its 2012 SUV Buyer’s Guide.

    The Dodge Avenger mid-size sedan set a sales record for the month of September with its considerable 89 percent sales gain, the largest percentage increase of any Dodge brand model. Sales of the Dodge Dart were up 72 percent in September, compared with the previous month of August, as the all-new compact sedan continues its steady monthly sales climb. The brand’s minivan offering, the Dodge Grand Caravan, turned in a solid 32 percent sales gain in September.

    Jeep® Brand

    Jeep brand sales increased 10 percent, the brand’s best September sales in six years and its 29th-consecutive month of year-over-year sales gains. Two Jeep models had record-setting sales in September. The Jeep Patriot, the best-priced compact SUV in America, logged a 42 percent increase, the largest sales gain of any of the Jeep models and a sales record for the month of September. The iconic Jeep Wrangler also set a sales record for the month of September with its 6 percent sales gain.

    The Jeep Grand Cherokee, the brand’s flagship SUV, recorded a 19 percent sales gain and was the brand’s volume leader for the month. It was the Grand Cherokee’s best September in seven years. The Jeep brand announced in September that it is introducing this month the new Grand Cherokee Trailhawk and Wrangler Moab editions, both of which feature off-road equipment never before offered on a production Jeep vehicle.

    Chrysler Brand

    Chrysler brand sales were up 5 percent, the brand’s best September sales in five years and its 15th-consecutive month of year-over-year sales gains. The Chrysler 200 mid-size sedan contributed to the brand’s sales gain by setting a sales record for the month of September. Sales of the 200 were up 13 percent in September versus the same month last year. The Chrysler 200 has set a sales record every month this year, including an all-time sales record in March. Sales of the Chrysler 300 flagship sedan were up 7 percent, the full-size sedan’s best September in five years and 11th-consecutive month of year-over-year sales gains. The Chrysler brand in September introduced the limited-production Chrysler 300C John Varvatos Limited Edition and the 300C John Varvatos Luxury Edition. Working hand-in-hand, John Varvatos’ signature fashion style combined with Chrysler designers styling expertise forged two 300 sedan models that embody the soul of “Imported from Detroit.”

    Ram Truck Brand

    The Ram pickup truck extended its streak of year-over-year sales gains to 29-consecutive months. Sales of the Ram pickup truck, Chrysler Group’s volume leader, were up 6 percent in September compared with the same month a year ago. It was the pickup truck’s best September sales performance since 2007. The Ram Cargo Van posted a 223 percent sales increase compared with the same month a year ago.

    The Ram Truck brand unveiled the new 2013 Ram 2500 and 3500 Heavy Duty pickups and 3500, 4500 and 5500 Chassis Cab work trucks at the Texas State Fair in September. The Ram Truck brand now offers the most capable heavy-duty pickups in the segment – the new 2013 Ram Heavy Duty line features best-in-class towing and best-in-class Gross Combined Weight Rating (GCWR). Ram 2500 and 3500 Heavy Duty trucks also add new features, including an all-new interior, next-generation Uconnect Access, Powernet, new frames and new suspension. The new 2013 Ram Heavy Duty further solidifies the long list of leadership claims, including best-in-class total cost of ownership.

    The 2013 Ram 3500, 4500 and 5500 Chassis Cab truck is the pinnacle of capability. Engineered and designed for extreme daily work, the Ram Chassis Cabs are products of a demanding environment and direct customer input. Ram’s halo truck line focuses on best-in-class capability and best-in-class total cost of ownership, a leading concern among business owners.

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    It seems that even at Chrysler Group, the small cars are the leaders. Total car sales are up by double digits while trucks are stable. I never would have imagined five years ago tha Chrysler could sell decent small cars (think Dart vs. Caliber, more so than the 500) since they were so completely married to trucks and SUVs. It certainly helps when the right leadership rights the ship and refocuses the whole company on product rather than its previous owners pursue profit for its own sake and by extension strip-mine Chrysler.

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    I think Chrysler had bigger problems than that, but at least the company is stable now and able to keep people employed.

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      Source: Bloomberg, Reuters, Automotive News (Subscription Required), General Motors, PSA Group
      Press Release is on Page 2


      Opel/Vauxhall to join PSA Group
      Establishes PSA Group as #2 in Europe. This strong and balanced presence in its home markets will serve as the basis of profitable growth worldwide Joint venture in auto financing with BNP Paribas to support development of Opel/Vauxhall brands €2.2 Bn transaction advances GM’s transformation and unlocks shareholder value through disciplined capital allocation Detroit and Paris – General Motors Co. (NYSE:GM) and PSA Group (Paris:UG) today announced an agreement under which GM’s Opel/Vauxhall subsidiary and GM Financial’s European operations will join the PSA Group in a transaction valuing these activities at €1.3 Bn and €0.9 Bn, respectively.
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      Creates sound European foundation for PSA to support its worldwide profitable growth
      “We are proud to join forces with Opel/Vauxhall and are deeply committed to continuing to develop this great company and accelerating its turnaround,” said Carlos Tavares, chairman of the Managing Board of PSA. “We respect all that Opel/Vauxhall’s talented people have achieved as well as the company’s fine brands and strong heritage. We intend to manage PSA and Opel/Vauxhall capitalizing on their respective brand identities. Having already created together winning products for the European market, we know that Opel/Vauxhall is the right partner. We see this as a natural extension of our relationship and are eager to take it to the next level.”
      “We are confident that the Opel/Vauxhall turnaround will significantly accelerate with our support, while respecting the commitments made by GM to the Opel/Vauxhall employees,” continued Mr. Tavares.
      Advances GM’s Transformation and Unlocks Value
      “We are very pleased that together, GM, our valued colleagues at Opel/Vauxhall and PSA have created a new opportunity to enhance the long-term performance of our respective companies by building on the success of our prior alliance”, said Mary T. Barra, GM chairman and chief executive officer.
      “For GM, this represents another major step in the ongoing work that is driving our improved performance and accelerating our momentum. We are reshaping our company and delivering consistent, record results for our owners through disciplined capital allocation to our higher-return investments in our core automotive business and in new technologies that are enabling us to lead the future of personal mobility.
      “We believe this new chapter puts Opel and Vauxhall in an even stronger position for the long term and we look forward to our participation in the future success and strong value-creation potential of PSA through our economic interest and continued collaboration on current and exciting new projects,” Ms. Barra concluded.
      Strengthens Each Company for the Long Term
      The transaction will allow substantial economies of scale and synergies in purchasing, manufacturing and R&D. Annual synergies of €1.7 Bn are expected by 2026 – of which a significant part is expected to be delivered by 2020, accelerating Opel/Vauxhall’s turnaround. Leveraging the successful partnership with GM, PSA expects Opel/Vauxhall to reach a recurring operating margin3 of 2% by 2020 and 6% by 2026, and to generate a positive operational free cash flow4 by 2020.
      PSA, together with BNP Paribas, will also acquire all of GM Financial’s European operations through a newly formed 50%/50% joint venture that will retain GM Financial’s current European platform and team. This joint venture will be fully consolidated by BNP Paribas and accounted under the equity method by PSA.
      The transaction is another step in GM’s ongoing work to transform the company, which has delivered three years of record performance and a strong 2017 outlook, and returned significant capital to shareholders. It will strengthen GM’s core business, support its continued deployment of resources to higher-return opportunities including in advanced technologies driving the future, and unlock significant value for shareholders.
      By immediately improving EBIT-adjusted, EBIT-adjusted margins and adjusted automotive free cash flow and de-risking the balance sheet, the transaction will enable GM to lower the cash balance requirement under its capital allocation framework by $2 Bn, which it intends to use to accelerate share repurchases, subject to market conditions.
      GM will also participate in the future success of the combined entity through its ownership of warrants to purchase shares of PSA. GM and PSA also expect to collaborate in the further deployment of electrification technologies and existing supply agreements for Holden and certain Buick models will continue, and PSA may potentially source long-term supply of fuel cell systems from the GM/Honda joint venture.
      Additional Information
      Terms of the Agreement
      Opel/Vauxhall automotive operations will be acquired by PSA for €1.3 Bn. GM Financial’s European operations will be jointly acquired by PSA and BNP Paribas for 0.8 times their pro forma book value at the closing of the transaction, or approximately €0.9 Bn.
      The transaction has a total value of €2.2 Bn, for Opel/Vauxhall automotive operations and 100% of GM Financial’s European operations.
      The transaction value for PSA, including Opel/Vauxhall and 50% of GM Financial’s European operations, will be €1.8 Bn.
      In connection with this transaction, GM or its affiliates will subscribe warrants for €0.65 Bn. These warrants have a nine-year maturity and are exercisable at any time in whole or in part commencing 5 years after the issue date, with a strike price of €1. Based on a reference price of €17.34 for the PSA share5 , the warrants correspond to 39.7 MM shares of PSA, or 4.2% of its fully diluted share capital6. GM will not have governance or voting rights with respect to PSA and has agreed to sell the PSA shares received upon exercise of the warrants within 35 days after exercise.
      The transaction includes all of Opel/Vauxhall’s automotive operations, comprising Opel and Vauxhall brands, six assembly and five component-manufacturing facilities, one engineering center (Rüsselsheim) and approximately 40,000 employees. GM will retain the engineering center in Torino, Italy.
      Opel/Vauxhall will also continue to benefit from intellectual property licenses from GM until its vehicles progressively convert to PSA platforms over the coming years.
      In connection with the transaction, GM will take a primarily non-cash special charge of $4.0-4.5 Bn.
      Ongoing Pension Fund Commitments
      All of Opel/Vauxhall’s European and U.K. pension plans, funded and unfunded, with the exception of the German Actives Plan and selected smaller plans will remain with GM. The obligations with respect to the German Actives Plan and these smaller plans of Opel/Vauxhall will be transferred to PSA. GM will pay PSA €3.0 Bn for full settlement of transferred pension obligations.
      Closing Conditions
      The transaction is subject to various closing conditions, including regulatory approvals and reorganizations, and is expected to close before the end of 2017.
      Warrants
      The issuance of the warrants is subject to the vote of shareholders at PSA’s General Meeting of May 10th, 2017. The three main shareholders of PSA (the French State, the Peugeot family and DongFeng) representing in aggregate 36.6% of the share capital and 51.5%7 of the voting rights of PSA have undertaken to vote in favor of the resolution related to the issuance of the warrants to GM. In the event the warrant issuance reserved to GM and its affiliates is not approved by PSA’s General Meeting, PSA will settle the €0.65 Bn in cash over five years.
    • By William Maley
      One vehicle that we are currently excited to see is the new Jeep Wrangler pickup. We last heard production of this model would begin in 2018 at FCA's assembly plant in Toledo, OH. But production has been pushed back.
      Speaking with The Detroit News, Jeep head Mike Manley revealed the production of the Wrangler pickup has been pushed back till late 2019. No reason was given for this pushback. As we reported back in December, production of the Wrangler pickup would begin sometime after March 2018 - the month that production of the current Wrangler is expected to end.
      The Detroit News also says a name hasn't been chosen for the upcoming Wrangler pickup. If we may make a suggestion, Gladiator or Scrambler.
      Source: The Detroit News

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