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Wednesday, May 14, 2008


Compare these following two statements: April 2008 saw a 29% decline, compared with the previous April, of Chrysler/Dodge/Jeep sales in the USA. Okay, now for statement #2 -> Chrysler Canada achieves its best April sales figure in over five years. 

Remember, the product lineups are the same, save for trim line and small option/equipment/features changes. So in what ways, specifically; are Canadians reacting differently to Chrysler LLC?

Historically, the Dodge Grand Caravan has been at or near the top of the list of best-sellers in Canada. Consumers north of the border are faced with higher prices (even when the dollar is at parity and even when the vehicle may've been built in Canada). Canadian consumers have also been faced with higher fuel prices than their American neighbours. Add these two factors together, and you see the need for vehicle purchases to be need-driven, rather than image-based. This results in the sale of a Dodge Grand Caravan, for instance, with a lower price and better fuel economy than the large SUV the equivalent American buyer would've purchased.

But this alone doesn't account for a company that has posted 21 consecutive months of improved sales compared with the same period of the previous year. Higher prices and more expensive fuel doesn't account for Chrysler/Dodge/Jeep being the fastest growing auto group in Canada during 2007. In fact, none of this explains how a company that builds the Commander, Sebring, and Caliber (not the Highlander, Camry, and Corolla) can be the second-largest seller in Canada.

Massive discounts -  aka incentives - go a long way to explaining much of the trend. In a land of higher prices and more expensive fuel, it helps when a company posts lower MSRPs on the sticker and counters Shell, Irving, and Petro-Canada with slogans like, "$1000 Free Gas!". Here are a few of the more telling results from April.

The Dodge Ram and Jeep Wrangler posted their best sales months ever. Dodge's Journey has quickly become the number two seller of crossovers, with 945 units sold in April, although we can't be sure of how Dodge classifies the category. We know they include 22 vehicles in the count. Jeep's Patriot and Compass, along with the Dodge Caliber, combined to sell 5,436 units in April. Minivan sales climbed 38%.

Is it possible for the trend to continue? Discounting Rams to the tune of $11,500 and offering 0% purchase financing at the same time might counteract $1.30/L fuel. The Sebring convertible enters the warm season with $7,000 chopped off the MSRP. Caliber pricing has plummeted to below $13K, the lowest price ever. In all, thirteen vehicles will feature an MSRP under $20,000. 

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