Some two weeks ago Sergio Marchionne, one of the industry’s most polarizing figures, presented to investors the five-year plan for the Fiat Chrysler Automobiles (FCA) group. A lot of ink has already been spilled analyzing the announcements, as well as models and whole brands missing from the presentation, so we won’t aim to add to that at this [Read more…]
For the second year, in what we hope will become an annual tradition here at CarSalesBase, we are using the incoming new year as motivation to reflect back at 2016 and look at its success stories (see here for the 2015 surprises, and here for the 2015 disappointments). Let us know in the comments below if you agree or disagree!
For the past two decades, ever since Ford decided to make Jaguar into a global competitor to luxury car brands such as Audi, BMW and Mercedes-Benz, the British brand has suffered from false dawns and unfulfiffled promises. After doing surprisingly well in the US selling the much-derided X-Type and the uber-conservative S-type, with sales peaking at over 61,000 units in 2002, things took a turn for the worse, with sales dropping to around 15,000 a year, where they have been up until 2015.
This year, however, Jaguar is looking to sell over 30,000 cars for the first time in over a decade, more than doubling last year’s sales. The reason for this upswing is a barrage of new models, with particular success coming from the F-Pace SUV and the mid-sized XE (averaging about 1,500 and 1,000 units per month, respectively). The only bligth on the brand’s copybook is the relative failure of the new large XF to connect with the buyers, with sales in recent months substantially below the levels reached by its predecessor this time last year, no doubt hurt by cannibalization from its new stablemates.
When Fiat Chrysler Automobiles revealed this week that they were contemplating building a full-sized SUV on the platform of the next RAM pickup truck to compete with the Chevrolet Tahoe/Suburban and Ford Expedition, I noticed a lot of “finally, what took them so long?” reactions, but also online replies that went along the lines of “they keep promising new vehicles and then delaying them”. Those commenters are probably right on both counts, but that’s not what this article is about.
My opinion on this vehicle is two-sided: on one hand I believe it fills a huge (no pun intended) hole in FCA’s North American line-up, one that has high profit margins for a limited budget, but on the other hand I don’t think this is the way of the future and they might have better ways to spend their limited R&D resources. And thirdly I’m not sure launching it under the RAM truck brand would be the best option.
Let’s start with the pros
A full-sized SUV based on the body-on-frame platform of their full-sized pick-up truck is not that expensive to develop than an all-new model on an all-new platform and it would spread the development costs of the pick-up truck platform over a greater number of potential sales. Besides that, these kinds of SUV’s typically sell for more than $ 50,000 and have profit margins north of $ 10,000 per vehicle. [Read more…]
So, we’ve recently talked about how competition keeps the automotive industry alive. Now let’s talk about how government intervention in competition also keeps the industry alive, but at a cost to the consumer. I’m talking about the infamous “chicken-tax”, the 25% import duty the US government charges on every imported light truck (including commercial van or pick-up trucks) that reaches American shores.
It is called the chicken-tax, because it was introduced in 1963 by President Lyndon B. Johnson as a childish response to tariffs placed by France and Western Germany on imported US poultry. So it has been around for more than 50 years and during those decades it has brought North American manufacturers of pick-up trucks a windfall of profits, all at the expense of the American consumer. Because the biggest victim of these tariffs aren’t the foreign automakers, but the domestic truck buyers.
This import duty has caused the American pick-up market to become an isolated market, controlled for 85% by just three automakers: General Motors, Ford and Fiat-Chrysler Automobiles, with pick-ups that are barely exported to other parts of the world, but which deliver huge margins of more than $10.000,- per truck sold (or, as the Automotive News reporter calculates: roughly the median household income in Greece). Compare that to the compact and midsized sedan market, where the Japanese have been kicking the domestic manufacturer’s butts for decades and the Koreans have joined the party a few years ago. Especially the midsized sedan segment, where the Toyota Camry is king, followed by the Honda Accord and Nissan Altima, is a fiercely competitive segment, where few automakers actually turn a profit. [Read more…]
When Fiat took control of Chrysler in 2009, Fiat-Chrysler CEO Sergio Marchionne drew an ambitious five-year turnaround plan for the bankrupt American automaker, promising better product, improved quality, higher sales and profitability and independence of government ownership by 2014. On May 6th, a new five-year plan will be announced, which means it is time to look back at the previous plan and see how the company has fared in the past half decade.
Marchionne promised to more than double Chrysler Group sales from 1,3 million units in 2009 to 2,8 million sales in 2014. These numbers may be a bit misleading, as 2009 was a disastrous year for Chrysler, and a two month production shut down during its Chapter 11 bankruptcy procedure didn’t help either. But still, when comparing the 2014 goal with the 2008 score of 2 million sales, it would still mean a 40% increase in 6 years.
In 2013, Chrysler Group worldwide sales increased 9% to 2,4 million. In order for the 2014 target to be met, sales would have to grow another 16,7% this year. This target was reiterated in the 2013 financial report, so Chrysler itself is still confident the goal will be reached. In the first quarter of 2014, Chrysler Group US sales, which represent three quarters of the company’s worldwide sales, where up 11,1% on 2013, so the company probably needs to increase its momentum in order to reach the 2,8 million sales. [Read more…]
The Mercedes-Benz G63 AMG 6×6 is an automotive extravagance, absurdity on 6 wheels. Or, as Mercedes call it themselves: the automotive declaration of independence. Other people would call it an unnecessary waste of (natural) resources, but as Top Gear have shown in their review, there are some very important things you can do with the 6×6. For example: jumping sand dunes, climbing rocks and driving through a swimming pool full of people, which are of course very sensible things to do.
More is always better when it comes to power, and the G63 AMG 6×6 proves that for certain on-road, but mostly off-road activities, the same goes for the number of wheels. But what if you come up short on the € 380.000,- / US$ 525,000 / £ 315,000 excluding taxes Mercedes is asking for this six-wheeled monster?
Well, there are some alternatives for you, which you may be able to pick up for less money than that. [Read more…]