Chrysler and Fiat CEO Sergio Marchionne has said that Chrysler’s apparently poor September sales reflect the culmination of a number of actions, such as backing off from incentives, and suggested that observers looking for improvement should ‘wait till November’.
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Marchionne, speaking during a visit of the Italian Economic Development Minister to Chrysler World Headquarters in Auburn Hills, said that ‘you need to be absolutely careful…when you start looking at market share data, for any of the automotive producers in the US, [because] there are a number of things that have impacted on market share, volumes in the month of September’.
Chrysler’s US September sales figures look bad: Chrysler was off 44.5% on last year to 61,910 units. Marchionne sees mitigating factors.
As well as the market disturbance caused by ‘Clunkers’, Marchionne highlighted the need to accept market share decline as ‘we cleaned up our commercial practices in the field’.
“So the heavy incentive checks that one could find in most dealers are no longer available, the discipline required to maintain pricing in order to stay profitable in the car making business, the benefits of that philosophy are beginning to work their way through, we are not the only ones that are adopting this structure ourselves,” he noted, adding that,” General Motors has become a lot more disciplined on this than we have been.”
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By GlobalDataMarchionne said that a contraction is inevitable as manufacturers’ starting point was exaggerated and they need to work through this process of cleansing.
“It’s painful it looks ugly, people sit back and say ‘what are you going to do to try and incentivise the demand’, the real issue is that we need to go back to making products that people want at a price that is accessible and defensible in a competitive framework,” he said.
Marchionne dismissed the September sales results as not an indication of the work going on at Chrysler which is longer term in nature.
“September is not an indication of future performance, I’m not apologizing for it, it is the consequence of a number of actions that were taken in the past, all of which have culminated in the month of September – you may see similar numbers in October, I don’t know.
“Our intention is to improve share from this point on, but I don’t get alarmed. The machine is timed, we’re not bleeding as people think we are, the level of cost consciousness at this house is probably at a historical high, the real important issue is to try and build a future. And I would just ask you to wait until November and you can see it.
“The future is a lot a lot better than the market share in September would indicate.”
