How Fiat Chrysler Automobiles Pulled Off a Big Sales Gain in 2018

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Fiat Chrysler Automobiles (NYSE: FCAU) said that its U.S. sales rose 14.3% in December, capping a banner year in which its sales rose 8.5% while key rivals lost ground.

How FCA's 2018 result stacks up

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How well did FCA do in 2018? Take a look at how its results compare with rivals'.

Automaker 2018 U.S. Sales Change vs. 2017
FCA 2,246,467 8.4%
General Motors (NYSE: GM) 2,954,037 (1.6%)
Ford Motor Company (NYSE: F) 2,485,222 (3.5%)
Toyota 2,426,672 (0.3%)
Honda 1,604,828 (2.2%)
Nissan 1,493,877 (6.3%)

What's working -- and what isn't -- for FCA in the U.S. right now

Like most of its rivals, FCA saw strong demand for trucks and SUVs, and weaker demand for mainstream sedans. But unlike most of its rivals, FCA has discontinued most of its mainstream sedans -- which is a big part of why it managed a solid sales gain in the U.S. in 2018.

What's working for FCA right now? Plenty.

Jeeps, Jeeps, Jeeps

FCA sold 973,227 Jeeps in the U.S. in 2018, up 17% from a (very good) 2017 result. Three models drove the gains: the Wrangler, all-new for 2018; the Cherokee, relocated to a factory that allows for higher production; and the compact Compass, all-new for 2017 and hugely improved. Only the aging Grand Cherokee and small Renegade were down from 2017, and not by much: It was a great year for Jeep by any measure.

Pickup trucks

FCA launched an all-new version of its Ram 1500 pickup early in 2018, and sold a mix of old and new trucks for much of the year as manufacturing of the new model ramped up. For the year, Ram pickup sales were up 7%, but the new truck gathered momentum as supplies increased: Sales in December were up 34% from a year earlier.

That 7% gain is still nothing to sneeze at. General Motors also had all-new full-size pickups in 2018, but managed just a tiny 0.2% year-over-year sales increase; Ford posted a 1.4% gain for its market-leading F-Series pickups in 2018.

Some surprises at Dodge

FCA's Dodge brand hasn't had much to brag about in recent years, but it managed a 3% sales gain in 2018. The models that drove it were a surprise:

  • The elderly Caravan minivan, which FCA has kept in production as a lower-cost alternative to the sleek Chrysler Pacifica, saw sales jump 21% in 2018. (The Pacifica's 2018 sales were roughly flat versus a very good 2017 result.)
  • The even-more-elderly Journey crossover SUV (the current version was launched in 2009!) posted a 5% gain in 2018. At this point in its life, its age is an advantage: FCA can sell the roomy seven-passenger Journey profitably at a starting price of just under $23,000.
  • The two-door Challenger muscle car, which was given an extensive overhaul for 2015, posted the best sales in its history in 2018 -- up 3% from a strong 2017.

Alfa Romeo finally got traction

FCA's upscale Italian Alfa Romeo brand has had a mixed reception since its return to the U.S. market a few years ago. On the one hand, reviewers have raved about the performance and handling of its Giulia sedan and Stelvio crossover SUV; on the other hand, the reliability of early examples was decidedly subpar.

If reliability concerns held Alfa back in 2018, it's hard to tell from its sales results. Sales of the Giulia rose 29% to 11,519, while sales of the Stelvio (which arrived in the second half of 2017) more than tripled to 12,043. That added up to a 98% overall gain for the year.

What isn't working: The company's namesake brands

The Fiat and Chrysler brands both struggled in 2018, with U.S. sales down 41% and 12%, respectively. Fiat's problem is a big one: Demand for all variants of its little 500 hatchback has fallen sharply, while the brand's only other U.S. model, the Mazda Miata-based Fiat Spider, sold only 3,515 examples in 2018.

Chrysler's problem is a lack of new product -- or really, a lack of products in general. As noted above, the stylish Pacifica minivan sold well, with 118,322 finding new homes in 2018. But the only other Chrysler still in production -- the big 300 sedan -- saw sales slump 9% to 46,593.

What's coming for FCA in 2019

All else being equal, new models tend to sell in greater numbers and at better prices than the end-of-life vehicles they replace. Here's a look at what we can expect from FCA this year.

  • A Wrangler-based Jeep pickup called the Gladiator will arrive later this year as a 2020 model.
  • A replacement for the Dodge Journey is expected at some point this year, but there could be a plot twist: It could be badged as a new Jeep, not a Dodge.
  • An all-new Fiat 500 is expected late in 2019, but it's not clear when (or whether) it will come to the U.S.

Looking past 2019, there are more new Jeeps expected, including an all-new Grand Cherokee and a new top-of-the-line model that will revive the Grand Wagoneer name. But FCA's plans are murky beyond that: It's not yet clear, for instance, whether all-new versions of the Dodge Charger and Challenger will arrive in 2021, or whether they'll be cancelled.

Still, given the number of fresh products in FCA's portfolio, it seems likely that the company will be able to sustain its sales success in 2019 -- as long as the economy holds up.

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John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford. The Motley Fool has a disclosure policy.