International Flavor Helps to Keep Chrysler's Recovery Firing on All Cylinders

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Researched by Industrial Info Resources (Sugar Land, Texas)--It's hard to believe that The Chrysler Group LLC (Auburn Hills, Michigan), a subsidiary of Fiat SpA (PINK:FIATY) (Turin, Italy), was going through bankruptcy proceedings and facing possible closure only a few years ago. Fiat saved America's third-largest automaker by taking over the struggling manufacturer after the federal government used taxpayer funds to bail out the automotive giant. Since that time, Chrysler has been making all the right decisions and sales have been booming. A large part of that success can be attributed to the complete revamp that Fiat forced on Chrysler, which brought a bit of international flavor to the storied American automaker.

Virtually everything has gone right since Fiat began running Chrysler. The automaker slimmed down its infrastructure through the closure of plants, trimmed its workforce to a manageable number, reworked its contracts with the unions, and streamlined its supplier network. Fiat also revamped almost the entire Chrysler lineup of vehicles and added some of its own, reintroducing the Fiat brand to American roads. Now, Fiat is planning to bring the Alfa Romeo back to the U.S., recently announcing plans to begin selling the iconic automobiles later this year. Alfa Romeo left the U.S. market in 1995 as sales were almost non-existent and quality issues became a mounting problem.

Fiat and Chrysler's revamping efforts have been paying off handsomely for the automaker. Sales in January 2013 increased 16%, making it the best January for Chrysler since 2008. This also marks the 34th consecutive month of sales increases for the automaker. Chrysler posted an annual profit of $1.7 billion in 2012, and most experts are predicting that the future will only be better. The best estimates at this point in the year are that the U.S. automotive sales market will surpass the 15 million-unit mark in 2013, as sales across the board for all automakers have been consistently improving for quite some time.

Virtually every unit within the Chrysler network of vehicles posted a sales increase in January. Chrysler models increased sales 18%, while the Dodge models saw their sales improve 37% for the month. Ram truck sales increased 14% as the Ram 1500 was named the 2013 "Truck of the Year" at the North American International Automotive Show in Detroit, Michigan. Fiat 500 sales improved 31% for the month, a significant improvement after the slow sales start the Fiat model had on its re-introduction to North American shores. The only Chrysler brand that saw a decline in sales in January was Jeep, which was down 4% after the automaker ceasing production of the Jeep Liberty model last August.

Fiat and Chrysler introduced two new Fiat 500 design concepts in January. With sales of the import improving, plus the plans to re-introduce Alfa Romeo to the U.S. in the near future, the automaker is betting heavily on these foreign vehicles making a splash in North America. This could certainly lead to additional Fiat models being introduced in the future as well. If Alfa Romeo sales take off, plans are already in the works to bring more competitively priced versions of the luxury vehicle to the U.S. Three additional models are expected to be introduced after the initial introduction of the Alfa Romeo 4C this year, which will put the automaker in direct competition with the other luxury automakers that have done so well in the U.S., such as BMW (Bayerische Motoren Werke AG) (GER:BMW.DE) (Munich, Germany).

While continuing to build on the success of the new Chrysler, Fiat is also using the American automaker for a shot at its own redemption in North America. Much like its Alfa Romeo brand, Fiat was forced out of the North American markets due to quality concerns, and Fiat is hoping that the revamped lineup of vehicles will do much to rebuild their reputation among North American consumers. The results have been satisfactory so far, and as long as Chrysler and Fiat can maintain the sales surges they have seen for the last 34 months, the experiment will continue and additional models will be planned. Chrysler is riding the wave of vehicle sales, just like its competitors, and is hoping that the bottom does not fall out of the market in the near future.

Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, and eight offices outside of North America, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Industrial Info's quality-assurance philosophy, the Living Forward Reporting Principle™, provides up-to-the-minute intelligence on what's happening now, while constantly keeping track of future opportunities.