Black Friday Deals Behind The Chrysler 200’s Hot Sales

On closer inspection...

On closer inspection…

After years of having to put a brave face on what everyone knew was just an updated Sebring, Chrysler’s 2015 200 was supposed to be the brand’s bold return to the midsized segment. Reviewers gave mixed-to-positive reviews, all concluding that the new 200 is a definite step up from the old model. Sales were up over 150% Year-Over-Year in November… so has Fiat’s CUSW platform made Chrysler competitive in the hotly-contested midsized sedan segment?

As the numbers above indicate, probably not. According to national sales data from TrueCar’s website, only the cheapest model of the new 200 (LX FWD) is selling close to MSRP ($68 above, actually). Every other trim of the new 200 is selling at deep discounts, despite having launched just this year. In fact, consumers spent less on average for the second level (Limited FWD) than the base trim, and average discounts for the top trim reach nearly $4,000. Though it’s impossible to know what the average of these averages is without knowing the sales mix, the fact that the typically loss-leading lowest trim is the only one maintaining any pricing discipline, its clear that this brand-new car is buying market share in hopes of appearing successful. Given that Edmunds says the Chrysler brand as a whole averaged a 20% discount in October, it’s clear that FCA’s attempt to transform Chrysler into a mass-market offering is not going to be a gimme.

US Car Sales On Fire… But Who Is Doing The Buying?

Bought... but not paid-for.

Bought… but not paid-for.

With America’s Seasonally Adjusted Annual Selling Rate (SAAR) creeping  above 16 million units in November, driving the market to new post-bailout highs, the usual cheerleaders are out in force to celebrate the strength of the US auto sales. But in the rush to spread the good news, few are looking at the troubling data underlying these frothy sales numbers. In the US, automakers count sales upon delivery to dealers rather than consumers. When times get tough and demand shrinks, OEMs often force dealers to take on more inventory in order to temporarily improve sales numbers. We saw both GM and Chrysler dump huge amounts of inventory on dealers in the leadup to their 2008 collapses, and we’ve reported on a similar dynamic at play in the current European downturn.

We won’t know the extent to which dealers are stacking up inventory until we see a full December 1 report from Automotive News, but initial signs are not promising. Already in October, Wards Auto saw an uncomfortable build-up in inventories across the industry that has apparently only grown among the worst offenders. At the time Wards predicted that “the excess will be alleviated in November, when most of the lost sales are recouped,” but although pricing discipline has remained high the inventories are continuing to build as we head into December.

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As the world spins: The mystery of the missing sales

Inside the truck wars black ops...

Inside the truck wars black ops…

Spend enough time looking at anything, and patterns eventually emerge; stare hard enough at auto industry news, and you can discern the movings of the PR teams who craft the messages that drive 95% of all auto media content. Spend enough time reading and a sweeping drama emerges: one side probes a competitor at a point of perceived weakness, the defender digs in or counter-attacks, a problem appears from nowhere while another problem fades away, yesterday’s non sequitor becomes today’s news.

In the polite world of the auto media, the journalist’s role on this battlefield is to be the straight man: to merely repeat each feint and parry in this informational melee as if they were the weather, or stock prices. Even the combatants themselves will back away from any direct confrontation when pressed, caught between the pull to ruthlessly compete and the inherently conservative culture of all large corporate communications departments.

But the battle for reality is constantly being waged in the auto industry… and the action is always most exciting when the stakes are highest. Which is what makes GM’s new truck launch the perfect case study.

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