Bloomberg News

Chrysler Sees U.S. June Auto Sales in Line With May

June 28, 2012

Chrysler Group LLC, the carmaker controlled by Fiat SpA (F), sees U.S. auto sales in June running at about the pace of May, the industry’s slowest month of 2012.

“We’re going to have a similar industry from a SAAR perspective that we had in May in June,” Reid Bigland, Chrysler’s head of U.S. sales, said today at the automaker’s proving grounds in Chelsea, Michigan. “We probably had a little bit of a pull-ahead into February and March” because of mild winter weather and “brighter prospects about the economy.”

Chrysler joins Ford Motor Co. (F:US), the second-largest U.S. automaker, which sees the industry sales pace in June being in line with May’s 13.8 million seasonally adjusted annualized rate, or SAAR, the slowest this year, according to researcher Autodata Corp.

U.S. vehicle sales, including medium- and heavy-duty trucks, are on pace for a low-14 million sales in June, “consistent with May,” Mark Fields, Ford’s president of the Americas, told reporters on June 26 in Dearborn, Michigan. Excluding medium-and heavy-duty deliveries usually lowers the rate by about 200,000 to 300,000 units.

Sergio Marchionne, chief executive officer of Chrysler and Fiat, is counting on U.S. growth this year to offset weakness in Europe, where sales are headed for a fifth-consecutive year of declines. Chrysler dealers this month began taking initial deliveries of the Dodge Dart compact, which Marchionne has said is the most important new model introduction since 2009.

Dart Sales

Dealers will sell the first “couple hundred” Darts in June, said Bigland, who is also president of the Dodge brand. The company has about 1,000 cars in inventory now and its plant in Belvidere, Illinois, will reach “full blast” output within the next four weeks, he said.

Chrysler also is considering adding a third shift at its Ram pickup factory in Warren, Michigan, Bigland said. The plant begins making the new Ram 1500 in September.

Ram deliveries rose 27 percent this year through May to 114,630, according to Autodata, which is based in Woodcliff Lake, New Jersey.

Chrysler continues to negotiate with a “variety” of financial institutions after telling Ally Financial Inc. (ALLY:US) in April that it would let a preferred lending agreement with the bank expire in April 2013, said Bigland, who declined to identify any specific companies.

Ally Pact

The pact with Ally required Chrysler to allow the Detroit- based lender (ALLY:US) to finance a minimum percentage of vehicles sold with subvented loans, made to consumers at below-market rates. Automakers pay lenders to make up the difference.

“It remains to be seen” whether Chrysler will select several lenders to work with going forward, Bigland said. “Personally, I don’t think competition is a bad thing.”

Wells Fargo & Co. (WFC:US), Santander Holdings USA Inc., General Electric Capital Corp., U.S. Bancorp and JPMorgan Chase & Co. are among banks that have negotiated with Chrysler about its auto-financing needs, three people familiar with the talks said in February.

“One positive with respect to the process is a lot of people want to come in and do some business,” Bigland said. “In 2009, most of these banks couldn’t finance a lemonade stand.”

Chrysler, based in Auburn Hills, Michigan, boosted U.S. sales by 33 percent this year through May to 689,257 cars and light trucks. Industrywide deliveries rose 13 percent during that span, according to Autodata.

Full-year sales for the industry will probably gain about 10 percent to 12 percent, Bigland said.

To contact the reporter on this story: Craig Trudell in Chelsea, Michigan, at ctrudell1@bloomberg.net

To contact the editor responsible for this story: Bill Koenig at wkoenig@bloomberg.net


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Companies Mentioned

  • F
    (Ford Motor Co)
    • $17.7 USD
    • -0.02
    • -0.11%
  • ALLY
    (Ally Financial Inc)
    • $23.9 USD
    • -0.05
    • -0.21%
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