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Published: Saturday, 1/4/2014 - Updated: 6 months ago

Toledo-built Jeeps drive Chrysler sales

Wrangler sets record in December, but demand dwarfed by Cherokee

BY TYREL LINKHORN
BLADE BUSINESS WRITER
An employee works on suspensions for the new Jeep Cherokee at the Toledo Assembly Complex. An employee works on suspensions for the new Jeep Cherokee at the Toledo Assembly Complex.
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December auto sales failed to meet analysts’ expectations of a 4 percent gain, but you wouldn’t know it by looking at what Toledo builds.

Chrysler Group LLC said it sold more Jeep Wranglers in December than ever, but even that record-setting achievement was overshadowed by the new Jeep Cherokee, which outsold it by nearly 3,000 units in its second full month on the market.

Though it’s too soon to call the Cherokee a hit, the Toledo-built sport utility vehicle has debuted strongly. Chrysler said Friday it sold 15,038 Cherokees in December, about 5,000 more than it sold in November. The vehicle went on sale in late October.

“Fifteen-thousand for a product launch is pretty impressive, especially given their previous difficulties getting this vehicle ready for the North American market,” said Peter Nagle, North American sales analyst with IHS Automotive.

Officials said December was Jeep’s second-best sales month on record, behind July, 2005. Overall, Chrysler sales rose 6 percent in December. Hyundai also posted a 6 percent gain. Nissan led the pack with an 11 percent increase.

Ford Motor Co. and Honda both gained 2 percent.

General Motors’ sales dipped 6 percent in December, but one analyst attributed that somewhat to GM keeping its incentive spending slightly below the industry average. “I think that’s a positive sign for the GM brand,” said Eric Lyman, an auto analyst with TrueCar.

Even with a lackluster closing month, 2013 was a good year to be in the auto industry. Ward’s Auto said total U.S. sales were a little more than 15.5 million, up about 7.5 percent from 2012 and the highest since the industry sold 16.1 million vehicles in 2007.

For the year, Ford led all major automakers with an 11 percent increase in U.S. sales to 2.4 million. Chrysler and Nissan reported 9 percent gains. GM, Toyota, and Honda all posted 7 percent gains.

The Toyota Camry was America’s best-selling car for the 12th straight year. Ford’s F-series pickup kept its perennial perch as the top truck in the United States.

For Chrysler, having the Cherokee off to a strong start is a good sign for this year. “It’s definitely the right product at the right time here,” Mr. Nagle said. “Those midsize and compact crossovers have been doing extremely well for the year.”

Mr. Nagle said the Cherokee fits nicely into Jeep’s lineup, likely attracting buyers who like the brand but can’t afford a similarly equipped Grand Cherokee and don’t need the Wrangler’s extreme capability.

IHS projects Cherokee sales of about 104,000 this year and 113,000 in 2015.

Chrysler executives have carefully avoided making any predictions for the Cherokee. However, Jim Morrison, Jeep’s director of product marketing, said Friday the company has been pleased with the Cherokee’s early success.

“It’s great to have Cherokee off to a good start,” he said. “It’s really good for the plant, it’s really good for the brand.”

Mr. Morrison made a point to say the company appreciates the work put in by its Toledo employees to get the Cherokee to market.

“We really are benefiting from a well-made, well-engineered, and well-built Jeep,” he said.

Based on early sales, Mr. Morrison said the V-6 option is popular, as are the upscale Limited trim and off-road themed Trailhawk packages.

Looking ahead for 2014, the industry is still expected to grow, though to a lesser extent than it did last year.

Analysts say much of the demand that built up during the recession has been filled. IHS Automotive anticipates the total market growing 2.5 percent to 3 percent for the year.

That could be good news for consumers.

“We’re starting to see with some of the December data that the incentives are starting to ratchet up as well,” TrueCar’s Mr. Lyman said. “What’s going to happen here as we go forward, production is starting to catch up and perhaps exceed that natural market demand.”

TrueCar expects incentive spending to go up 20 percent over the next three years.

Contact Tyrel Linkhorn at tlinkhorn@theblade.com or 419-724-6134.



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