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Why Fiat Chrysler’s US Sales Have Been Falling

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FCAU’s US sales in February

In February 2018, Fiat Chrysler’s (FCAU) total US sales dropped to 165,903 vehicles, ~1.4% lower than its February 2017 sales of 168,326 units but ~25% higher than its January 2018 sales of 132,803 units. February 2018 marked the 18th consecutive month of FCAU’s US sales falling YoY (year-over-year).

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US retail sales were almost flat

Last month, Fiat Chrysler’s retail sales were almost flat, at about 122,500 vehicle units, with a minor drop of ~0.7% YoY. In January 2018, the company’s US retail sales rose 2% YoY to 112,000 units. Fiat Chrysler’s February retail sales volume comprised ~74% of its total US sales.

Fleet sales are driving weakness

In February 2018, Fiat Chrysler continued to cut its US fleet vehicle sales. Sales were reduced by 3% to ~43,400 vehicle units, accounting for just 26% of its total US sales. However, February’s fleet sales were still much higher than January’s sales of 21,226 units.

As a part of its strategy to improve its operating margins, Fiat Chrysler has continued to reduce its US sales to the daily rental segment, like US giant General Motors (GM) has. Fiat Chrysler has made this reduction because daily rental sales typically result in lower profit margins for auto companies (FXD) than do retail sales.

Due to this planned cut in fleet sales, FCAU has been losing its US market share to peers GM, Ford (F), and Toyota (TM). Ford reported a decline of ~6.9% in its February US sales, while TM’s US sales rose 4.5% YoY. Continue to the next part to learn about Fiat Chrysler’s car and truck segment sales in February 2018.

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