Honda laps a broken down Chrysler to become No. 4 in US auto sales
Honda, the company that got its start selling mopeds, has replaced Fiat-Chrysler as the No. 4 automaker in the US.
If you think Honda gained the No. 4 spot by selling a few extra Civics from the cash for clunkers program, think again. The Japanese automaker has sold over 1 million cars this year and has crushed Fiat-Chrysler with a sales lead of 200,000. Last year, Chrysler outsold Honda by 25,000 cars.
Fiat-Chrysler has insisted that this is just a temporary setback and they will regain lost ground after their new products hit the US market. Honda is going to stay at No. 4 for the time being because it’s going to take years to fix Chrysler.
Sergio Marchionne, the CEO of Fiat-Chrysler, announced last month a five-year plan to restructure the company. Deadweight like the PT Cruiser has been axed, but its replacement may not come until 2012.
Can Fiat-Chrysler scrape-by while the company retools Fiat supplied models for the US market? Once those cars get here will they sell? The last two times Chrysler teamed up with a foreign car company, things did not work out so well.
Remember the Eagle Summit? Neither does anybody else. The Chrysler Crossfire did not help save Daimler-Chrysler’s partnership either.
The Fiat supplied models will be a breath of fresh air to the rather stale lineup Chrysler currently offers. The Fiat 500 will be sold in Chrysler dealerships and can be seen as an Italian Mini Cooper. A turbocharged 135-hp option could interest enthusiasts.
Another model Fiat-Chrysler hopes will be a sales success in the US is the Fiat Panda. The Panda is a five-door hatchback that has sold over a million units in Europe. The Panda could be sold as compact 4×4 Jeep.
Small Cars like the Fiat 500 and Panda are successful in Europe in part because of high gas taxes. The US has lower gas prices and it remains to seen if the HEMI-loving Chrysler loyalists will embrace the new models. Fiat’s offerings do have a European chic that may bring in new customers.
Honda is not resting on its laurels and hopes to recreate the success of the CR-X with the hybrid CR-Z. The CR-Z will be the first hybrid that offers a manual transmission and may also be the first hybrid that is not a total bore to drive. Fiat-Chrysler’s five year plan does not include a hybrid or electric vehicle.
The biggest hurdle for Fiat-Chrysler to overcome is the trust of consumers. Older consumers also remember the age of “fix it again Tony” Fiat’s and younger generations have not exactly embraced Chrysler’s non-performance models.
Honda has none of these negative brand name perceptions and does not need dramatic restructuring to recoup sales. Their only weakness is a rather bland product line and Fiat-Chrysler’s superior trucks.
The long delay for Fiat-Chrysler to deliver new models gives Honda a lot of time to enjoy their new found No. 4 position. Honda is an excellent position to stay at No. 4 with a lineup of interesting fuel efficient cars like the CR-Z and the unique Accord Crosstour. If sales do pick up for Honda, they may even able to bring back the canceled RWD platform for Acura.
Fiat-Chrysler has an uphill battle if it wishes to regain its former No. 3 position. It’s not just Honda that Fiat-Chrysler has to worry about, there will also be strong competition from small European imports like the Ford Fiesta and Mazda 2. Fiat-Chrysler’s whole model line is going to need to be a sales success to regain their former glory.