Chrysler’s woes masked by Toyota recalls

By Drew Johnson - Posted March 10th 2010

With Toyota’s safety problems dominating news headlines, it’s easy to forget about Chrysler’s struggle for survival. The Michigan automaker’s sales have tanked since early 2009, with the start of 2010 not looking any better for Chrysler.
While most of the world’s automakers are starting to see some positive growth after months of record-low sales, Chrysler is still fighting to keep its head above water. Although Chrysler’s sales are down just 3 percent this year, the picture is actually much worse than it appears.

While a 3 percent decline sounds downright good in a world that has seen sales plunge well into the double digits, it has to be taken in context. That’s in comparison to early 2009 when Chrysler was shutting down plants due to a near 50 percent drop-off in consumer demand.

Moreover, Chrysler has actually inflated its 2010 sales figures through massive fleet sales. According to Edmunds, Chrysler’s sales to U.S. consumers are actually down 44 percent this year, placing Chrysler 7th on the U.S. sales list.

Most automakers have shied away from fleet sales in recent years to improve vehicle resale values, but Chrysler is admittedly using fleet sales as a major pillar of its business. “We have to rebuild consumers’ confidence in the company,” a Chrysler spokeswoman said. “The fact that large companies are willing to buy our vehicles helps rebuild that confidence, so fleet is part our businesses strategy.” More than 50 percent of Chrysler’s sales volume is made up of fleet and rental sales.

References
1. ‘Forget Toyota…’ view