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Chrysler's retail sales get boost this month


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Chrysler's retail sales get boost this month

Though overall numbers expected to drop, automaker confident about new Dodge ads

Alisa Priddle / The Detroit News

Auburn Hills -- Chrysler Group LLC said it is seeing a surge in retail sales this month, and executives hope to continue the momentum with a newly launched marketing campaign for the Ram Truck brand.

March retail sales are 51 percent above last month, but overall sales, which include fleet sales, could be down 12 percent from a year ago, said Fred Diaz, head of sales and the Ram brand.

All four Chrysler brands -- including Chrysler, Jeep and Dodge Car -- are enjoying increased retail sales this month, "which is huge," Diaz said Wednesday at an event outlining Ram's advertising and marketing plans.

But when March results are reported April 1, total Chrysler sales could be down 12 percent from a year ago, when the automaker was piling on the incentives.

"We were buying the market," Diaz said of discounts of as much as $8,000 last spring. Using incentives to clear excess inventory was among the "bad practices" that led the company to declare bankruptcy April 30, he said.

As Chrysler monitors Toyota Motor Corp.'s increasing incentives following a series of recalls, Diaz said Chrysler will honor its commitment to dealers to keep them competitive without reverting to huge discounts. Chrysler spent 31 percent less on incentives in February than a year ago, according to Autodata Corp.

Chrysler sold 84,449 vehicles in February, up marginally from February 2009, but the automaker has lagged behind other automakers in recovering from terrible sales levels during the past year.

And Chrysler relied heavily on fleet sales last month. A report from New York investment bank Moelis & Co. said 58 percent of Chrysler sales went to fleets. A confidential industry report shows retail sales fell 44 percent, while fleet deliveries increased 170 percent.

Diaz said Chrysler does not disclose fleet figures, but the February number was higher because the automaker benefited from pent-up demand. He expects fleet sales to account for 20-25 percent of sales for the year.

To ignite consumer interest in Ram trucks, new ads were launched last week. Many were targeted to specific regions, and trucks will tour the country all year as part of road tours and events to showcase them to the public, said Marissa Hunter, head of communications for the brand.

A new Ram Web site could launch as early as next week, and Ram will be a sponsor of the Country Music Awards on April 18.

"Chrysler executives understand the challenges they face and why their sales are not recovering as quickly," said analyst Stephanie Brinley of AutoPacific in Troy. "They were quiet for so long they've dropped off consumers' shopping lists."

Taking vehicles on tour is a good way to reintroduce the products, she said.

Diaz said when the automaker decided last year to split Dodge Car and Ram Truck into separate brands, people were caught off guard. But the idea is beginning to resonate with consumers as they become aware of the benefits of promoting such different vehicles separately. The word "Dodge" will continue to appear somewhere on each truck but is not used in advertising and has been replaced by "Ram" on the vehicle logo.

The Ram brand accounts for 25 percent of Chrysler Group vehicle shipments to dealers and contributes 30 percent of the company's revenue, Diaz said. Chrysler is spending more on marketing than in the past, but he would not provide figures.

Chrysler will not outspend the competition, marketing chief Olivier Francois said.

The budget is pretty evenly spread across the four brands, Francois said, but the timing of the spending differs. Ram is concentrated early in the year, Jeep will peak in June and July with the pending launch of the new Jeep Grand Cherokee, and Chrysler is later in the year when new and refreshed products hit the market.

An ad agency to promote the sale of the Fiat 500 in December has not been selected, Francois said, nor has the company decided how to position the 500, which is a trendy vintage car in Europe.

From The Detroit News: http://detnews.com/article/20100325/AUTO01/3250355/1148/Chrysler-s-retail-sales-get-boost-this-month#ixzz0jBwTsIds

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