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Why Chrysler outshone GM and Ford in January

Rick Newman
The Exchange
FILE - This March 27, 2013 file photo shows the 2014 Jeep Cherokee Limited at the New York International Auto Show. (AP Photo/Richard Drew, File)

Chrysler is the perennial underdog among the three domestic car companies, so it’s news when the back-from-the-dead automaker trounces its crosstown rivals — especially when it does so without any help from Clint Eastwood or Bob Dylan.

That’s what happened in January, when Chrysler sales rose by a healthy 8% while sales slid by 8% at Ford (F) and 12% at General Motors (GM). Overall, car sales fell by 3% during the first month of 2014, due largely to the “polar vortex” and other unusually frigid weather patterns, which helped keep shoppers home.

But when you dig beneath the numbers, things aren't 100% rosy for Chrysler. And they aren't all bad for GM and Ford.

Chrysler did have two things going for it in January — the new Jeep Cherokee and the nearly new Dodge Ram pickup. Both divisions have been in desperate need of new products, since the pipeline of new vehicles essentially shut down as Chrysler approached bankruptcy in 2009. After Italy’s Fiat took over the company, it took a while to crank out new products, since the company in many ways was starting from scratch.

The Cherokee used to be a mainstay of the Jeep lineup, and the introduction of the new model was delayed by months. But that may have had the unintended benefit of building anticipation for the aggressive-looking crossover, which finally went on sale in the fall, just in time for a snowy winter. Jeep sales in January soared by 38% from the year before, the biggest jump among any mainstream nameplate, according to Automotive News. The Cherokee accounted for one-fourth of those sales, and the vehicle’s buzz probably drew people into showrooms who ended up buying another Jeep model.

Sales of the Ram pickup, the other star performer, rose by 24%. That’s partly due to a handsome housing recovery, which has stoked sales of all pickups. But the Ram, introduced last spring, has been a big hit for Chrysler and has been cutting into pickup sales at Ford and GM.

Numbers look better than they are

Chrysler also benefits from easy year-over-year comparisons with the first few months of 2013 — before the new Ram debuted — which will make its 2014 numbers look better than they really are. GM and Ford both actually outsold Chrysler in January, but their sales dropped from 2013 levels while Chrysler’s rose.

There remain some glaring weak spots in Chrysler’s portfolio. Sales at Dodge — which has one of the most geriatric lineups in the industry — fell 19%. And while Chrysler brand sales rose 2%, the division only has three vehicles and its total volume is just one-sixth of Chevrolet’s. The forthcoming 200 sedan — hawked by cultural rebel/car salesman Bob Dylan during the Super Bowl — is Chrysler’s hope for a comeback hit in the family-sedan category.

For GM and Ford, there was a bit of good news in their weak sales numbers. Both automakers cut back on fleet sales to government agencies and rental-car companies, which are usually very low-margin sales meant to move vehicles building up in inventory. Fewer fleet sales usually indicate stronger pricing power and better profitability.

Nissan and Subaru were the other sales winners in January, with gains driven by vehicles such as the new Nissan Rogue crossover and the all-wheel-drive Subaru Forester, a natural draw during winter. Sales fell at Toyota, Honda and Volkswagen, but analysts think traffic at dealerships will pick up in February and March — provided the polar vortex doesn’t return.

Rick Newman’s latest book is Rebounders: How Winners Pivot From Setback To Success. Follow him on Twitter: @rickjnewman.