Chrysler December Sales Rise 5.7% to Extend Streak to 45 Months

Bloomberg News

, the automaker being acquired by Fiat SpA, said December U.S. sales rose 5.7 percent, extending a streak of monthly gains to 45, while falling short of analysts' estimates.

Chrysler deliveries increased to 161,007 cars and light trucks, the Auburn Hills, Michigan-based company said today in a statement. The average of six analyst estimates in a survey by Bloomberg News was for an 8.4 percent increase. Turin, Italy-based Fiat said Jan. 1 it had reached a $4.35 billion deal with a union trust to buy all Chrysler stock it doesn't already own.

U.S. automakers' breadth of offerings are drawing more buyers to brands as diverse as Dodge, Chrysler Group's value line, and 's Cadillac luxury marque. U.S. car and light truck sales in December are projected to climb 3.8 percent to 1.41 million, the average of nine estimates. That would push deliveries for the full year to more than 15.6 million, the most since 2007.

'Our Jeep and Ram Truck brands had a strong finish led by the all-new 2014 Jeep Cherokee and the Ram pickup truck, Motor Trend's 2014 Truck of the Year,' Reid Bigland, Chrysler's head of U.S. sales said in the statement. 'Sales of the new Cherokee topped 15,000 units in December as our newest SUV continues its solid sales performance out of the gate.'

Cherokee climbed 48 percent from November to 15,038 in its third month in the market, helping Chrysler extend its streak of year-over-year sales gains. Deliveries of Ram pickups gained 11 percent from a year earlier to 33,405, and sales of Town & Country minivans rose 5 percent to 9,737.

Fiat Ownership

Fiat announced a deal with a United Auto Workers retiree medical trust to buy its 41.5 percent of Chrysler for $3.65 billion and have Chrysler contribute an additional $700 million toward former union workers' health-care costs. Together, Fiat and Chrysler will be the world's seventh-largest automaker with about 4 million sales a year globally.

The U.S. market probably ended 2013 with an annualized sales rate adjusted for seasonal trends of 15.8 million, the average of 14 December estimates, up from 15.2 million a year earlier. November's pace of 16.4 million was the fastest since February 2007, according to researcher Autodata Corp. Chrysler projected a rate of 15.8 million, including medium- and heavy-duty vehicles, which typically account for at least 200,000 deliveries a year.

Market Share

The three Detroit-area automakers entered last month with a chance to gain U.S. market share for the year, armed with what Kevin Tynan, an auto analyst for Bloomberg Industries, said is their most competitive lineups in a generation.

Fielding attractive cars such as 's Fusion has freed the Detroit Three from the longtime bind of choosing between volume or charging enough for their cars to earn profits on them, he said. Each of the automakers boosted the average selling prices of their vehicles in 2013 as they outpaced a U.S. auto market now poised for a fifth consecutive year of expansion in 2014.

'Prior to 2009, for Detroit it was 'pick one,'' Tynan said in a telephone interview. 'If you were doing volume, you weren't doing any kind of pricing or profitability. And if you were doing any kind of pricing, you weren't getting any volume. It's all come together now to where they can have it both ways. That's significant.'

Ford Brand

Leading the way for Detroit last year was the Ford brand, which extended its sales lead over the Toyota line on the strength of Fusion and its F-Series pickups.

The second-largest U.S. automaker said this week that it expects to sell more than 2.4 million Ford brand vehicles in 2013, up from 2.16 million a year earlier. Analysts project that deliveries of Ford and Lincoln brand vehicles for the Dearborn, Michigan-based company increased 4.3 percent in December, the average of nine estimates.

The Ford brand's lead over the namesake for Toyota City, Japan-based Toyota was 388,825 light vehicles entering December, according to Woodcliff Lake, New Jersey-based Autodata. The Toyota line trailed Ford by 322,521 in 2012.

Americans paid $34,164 per vehicle from Ford and $34,869 per car and truck from GM last year, according to research by Kelley Blue Book that includes preliminary data for December. Compared with the industry average, that equates to a premium of $2,118 per Ford Motor model and $2,823 for each GM vehicle, Kelley Blue Book said. Chrysler's transaction prices rose at a faster rate than the industry to pull within $100 of the average.

Cadillac, Dodge

The gains by Detroit are striking Toyota and Tokyo-based Honda (7267) in the hearts of their lineups. Deliveries of Ford's Fusion climbed 22 percent from January to November, outpacing gains of 1.3 percent for Camry and 11 percent for Accord. And Fusions sold for an average of $26,378 last year, a premium of $897 to Accord and $2,224 to Camry, the lock to be the top-selling car in the U.S. for a 12th consecutive year.

The Fusion is a standout in a crowded field of more competitive passenger cars from Detroit. Deliveries of GM's Cadillac cars jumped 55 percent last year through November, and Chrysler's Dodge line of cars boosted sales by 31 percent. Those were the two biggest gains of any car brand with at least 20,000 deliveries last year.

Sales probably rose 1.5 percent for Detroit-based GM, the averages of nine analysts' estimates. GM would eke out a market share gain of less than 0.02 percentage point based on analysts' projections for its sales and those of the industry. Ford entered December with an increase of almost 0.5 percentage point, the industry's largest advance, and Chrysler's share had risen by about 0.1 point.

Toyota, Honda

The U.S. automakers are arguably going for their first sweep of market share gains since 1988. While Ford reported a market share gain in 2011, its calculation excluded year-earlier sales for the Volvo brand, which it owned for the first seven months 2010. If Volvo deliveries from before Ford's sale of the brand to China's Zhejiang Geely Holding Group Co. are counted in its 2010 results, Ford's share slipped from 16.9 percent to 16.8 percent in 2011.

Toyota, Honda and European carmakers including Volkswagen AG will test Detroit's growth this year. Automakers plan to add 2.1 million vehicles of incremental capacity in North America after 2013, with almost all of the output being added by Asia and Europe-based companies, IHS Automotive said last month.

Deliveries probably rose 3.1 percent for Toyota and 4.1 percent for Honda in December, according to the averages of seven analysts' estimates. Sales probably increased 13 percent for Nissan Motor Co. (7201) and 7.2 percent for affiliates Hyundai Motor Co. and Kia Motors Corp., the analysts projected.

Sales by Wolfsburg, Germany-based Volkswagen probably fell 13 percent, according to the average estimate from four analysts.

Pricing, Inventory

A potential challenge for the broader industry will be to maintain pricing as additional production capacity comes on line, especially since inventory has climbed in anticipation of the first year of at least 16 million light vehicle sales since 2007. Industrywide supply of passenger cars rose to 1.8 million at the beginning of December, the highest monthly total since March 1996, according to Automotive News Data Center.

'If you believe sales next year are going higher, and that we're going to come into a very robust spring and summer sales cycle, a lot of the inventory concerns that are out there will dissipate very quickly,' Erich Merkle, Ford's sales analyst, said last month in a telephone interview.

To contact the reporters on this story: Mark Clothier in Southfield, Michigan, at mclothier@bloomberg.net; Craig Trudell in Southfield, Michigan, at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Jamie Butters at jbutters@bloomberg.net