Jeep sales jumped 33 percent as consumers demand SUVs
Italian-American automker sees annual rate topping 18 million
Fiat Chrysler Automobiles NV’s October U.S. sales rose 15 percent, extending its streak of monthly gains to 67 thanks to a 33 percent increase for the Jeep brand. Toyota Motor Corp. said its sales rose at least 10 percent, exceeding estimates for an 8.5 percent increase.
The Italian-American automaker reported selling 195,545 vehicles last month, exceeding the 13 percent average of eight analysts’ estimates compiled by Bloomberg. Jeep sport utility vehicles accounted for 38 percent of those deliveries with four models exceeding 10,000 sales, including Patriot, which reported a 56 percent increase. All brands reported increases as the unit posted its best October since 2001.
As Fiat Chrysler and other automakers report October sales on Tuesday, the industry may show a 10 percent jump in car and light-truck deliveries, to 1.41 million, the average of four analyst estimates. The annualized rate, adjusted for seasonal trends, will probably be 17.7 million, the average of 13 estimates in a Bloomberg survey. Fiat Chrysler projected a pace of 18.5 million, including medium and heavy trucks that typically account for at least 200,000 sales.
“October was a huge month for the industry, smashing expectations and continuing its hot streak,” said Bill Fay, group vice president and general manager for the Toyota Division. The brand’s RAV4 and Highlander SUVs set records for October.
Projected gains include 14 percent for Ford Motor Co. and 12 percent for General Motors Co.
“Last month’s sales strength continued to be broad based for the company with eight FCA vehicles setting October sales records across three of our brands,” Reid Bigland, head of sales for FCA US, the unit formerly known as Chrysler, said in a statement Tuesday.
While all of Fiat Chrysler’s brands improved from a year earlier, the unit’s run owes a lot to Jeep. The brand’s go-anywhere image was born on the battlefields of World War II and popularized in the 1980s SUV boom with the debut of the original Cherokee. This year, demand for Jeep’s growing lineup has been boosted by America’s renewed affection for pickups and SUVs, deepened by available credit, affordable fuel and the latest technology, is pushing auto sales to the highest level in at least a decade.
Jeep’s sales have been aided by longtime stalwarts Wrangler, up 15 percent last month from a year earlier, and Grand Cherokee, which rose 7 percent, as well as newer ones, like the resurrected Cherokee , which went on sale in 2013, and the Renegade , which started selling in the U.S. this year. Cherokee sales rose 12 percent percent while Renegade’s totaled 7,795.
Jeep appears to be immune to criticism from rankings of quality and reliability. Last month, Consumer Reports readers ranked the brand the second-least-reliable in the U.S., leading only Fiat. If quality alone mattered, Jeep might be doomed to the bargain bin.
Instead Jeep is, by any other measure, a massive hit. The brand is closing in on a second-straight year as the fastest-growing major auto line in the U.S. Sales in the market rose 24 percent this year through October, after soaring 41 percent in all of last year. Jeep and the Ram truck brand are the main moneymakers for Fiat Chrysler, the third-largest automaker in the U.S.
“Jeep reminds me of the European sports cars of the late ’50s and ’60s,” said Michelle Krebs, an analyst with Autotrader.com. “They were just nightmares in terms of quality and reliability, but people still loved them. Jeep is unique. People of all ages really aspire to owning one. It has a certain cachet, regardless of the surveys.”
It isn’t just Consumer Reports. J.D. Power ranked Jeep below industry average in this year’s survey of issues in the first 90 days of ownership. Only Subaru, Smart, Chrysler and Fiat ranked lower. Jeep placed third from the bottom in J.D. Power’s vehicle dependability study, a longer-term look at quality. Jeep outpaced only Land Rover and, once again, Fiat.
Jeep’s resiliency isn’t just a U.S. phenomenon. Globally, sales rose 39 percent last year, topping 1 million for the first time. As recently as 2009, Jeep was forecasting global sales of 800,000 for 2014.
A year ago, Sergio Marchionne, Fiat Chrysler’s chief executive officer, said Jeep would sell 1.9 million vehicles by 2018. Last week he said that target “is probably understated.”
Source: business insider.