Chrysler ‘On Track’ to Eliminate Sales Bank

Chrysler Group’s inventory of “unassigned vehicles” was about 10,000 by November’s end – down from its peak total of 100,000 just three months ago, according to Ward's data.

Chrysler declines to confirm the number. Steven Landry, vice president-sales and field operations, says only that the pace of decline is “on track” to eliminate the so-called “sales bank” that is not included when the auto maker reports inventory.

Chrysler tallies only units ordered by dealers. The additional vehicles essentially were built on spec until they could be matched with dealer orders.

Senior executives promised, by year’s end, to rid the company of this stockpile, a nagging reminder of poor forecasting that contributed to Chrysler’s $1.5 billion third-quarter loss.

As the unreported inventory fell, Chrysler’s November sales rose, defying industry pundits. Boosted by an uptick in pickup deliveries and a surge of interest in its all-new midsize SUVs, Chrysler managed a 2.9% sales increase last month vs. November 2005.

The 164,556 vehicles sold marked Chrysler’s best November in five years.

Dodge Ram deliveries rose 8.0% in November.

This time last year marked the beginning of a downturn for the auto maker. Prior to November 2005, Chrysler enjoyed 19 consecutive monthly sales increases.

Deliveries of Chrysler’s highest-volume product, the Dodge Ram pickup, rose 8.0% in November. Equally significant, however, is the apparent interest in the recently launched Dodge Nitro and Jeep Wrangler SUVs, both all-new.

Chrysler has dealer orders for 50,000 Nitros and 62,000 Wranglers. While confident in the appeal of these products, Landry is cautious in his assessment of the market reaction they have generated.

“It does, perhaps, give a really short-term indication that either people are moving down from bigger SUVs to smaller SUVs, or some people just want a midsize SUV,” he says.

Casting a shadow over Chrysler’s November performance is a report by Edmunds.com that shows the auto maker spent heavily on incentives. Including dealer spiffs, Chrysler spent an average of $4,224 per vehicle – up $88 from October.

Meanwhile, crosstown-rival Ford Motor Co. spent more than $1,100 less.

And Jeep topped Jaguar as the brand with the highest per-vehicle incentive – $5,398 vs. the luxury marque’s $4,340.

The year-to-date sales picture reflects the challenges facing Chrysler as it engages in cost cutting to reverse its third-quarter setback. Through November, sales are down 8.0% compared with the first 11 months of 2005.

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