2014 Chrysler 200 Touring on 2040-cars

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The next steps automakers could take after sales drop again in April

DETROIT (Reuters) - Major automakers on Tuesday posted declines in U.S. new vehicle sales for April in a sign the long boom cycle that lifted the American auto industry to record sales last year is losing steam, sending carmaker stocks down. The drop in sales versus April 2016 came on the heels of a disappointing March, which automakers had shrugged off as just a bad month. But two straight weak months has heightened Wall Street worries the cyclical industry is on a downward swing after a nearly uninterrupted boom since the Great Recession's end in 2010. Auto sales were a drag on U.S. first-quarter gross domestic product, with the economy growing at an annual rate of just 0.7 percent according to an advance estimate published by the Commerce Department last Friday. Excluding the auto sector the GDP growth rate would have been 1.2 percent. Industry consultant Autodata put the industry's seasonally adjusted annualized rate of sales at 16.88 million units for April, below the average of 17.2 million units predicted by analysts polled by Reuters. General Motors Co shares fell 2.9 percent while Ford Motor Co slid 4.3 percent and Fiat Chrysler Automobiles NV's U.S.-traded shares tumbled 4.2 percent. The U.S. auto industry faces multiple challenges. Sales are slipping and vehicle inventory levels have risen even as carmakers have hiked discounts to lure customers. A flood of used vehicles from the boom cycle are increasingly competing with new cars. The question for automakers: How much and for how long to curtail production this summer, which will result in worker layoffs? To bring down stocks of unsold vehicles, the Detroit automakers need to cut production, and offer more discounts without creating "an incentives war," said Mark Wakefield, head of the North American automotive practice for AlixPartners in Southfield, Michigan. "We see multiple weeks (of production) being taken out on the car side," he said, "and some softness on the truck side." Rival automakers will be watching each other to see if one is cutting prices to gain market share from another, he said, instead of just clearing inventory. INVESTORS DIGEST BAD NEWS Just last week GM reported a record first-quarter profit, but that had almost zero impact on the automaker's stock. The iconic carmaker, whose own interest was once conflated with that of America's, has slipped behind luxury carmaker Tesla Inc in terms of valuation.

FCA goes all-in on Jeep and Ram brands on cheap gas bet

It's no surprise that as SUV and truck sales remain strong in the wake of unusually cheap gas, Jeep and Ram sales are taking off. What is a surprise is that FCA CEO Sergio Marchionne thinks that cheap gas will be a "permanent condition," and feels strongly enough about it to change up North American manufacturing plans. Jeep appears to be the biggest beneficiary of the product realignment. In addition to increasing the sales estimates for the brand worldwide upwards to 2 million units a year by 2018, the brand will get a flood of investment for new product and powertrains. Consider the Wrangler Pickup to be part of the salvo, as well as the Grand Wagoneer three-row announced in 2014 as part of the original five-year plan. The Wrangler four-door will get at least two new powertrains, a diesel and mild hybrid version, in its next generation. That mild hybrid powertrain may utilize a 48-volt electrical system like the one that's being developed by Delphi and Bosch – which the suppliers think will be worth a 10 to 15 percent fuel economy gain at a minimum. Down the road, in the 2020s, the Wrangler could adopt a full hybrid system. The diesel powertrain is planned for 2019 or 2020. The Ram 1500 is also pegged to receive a mild hybrid system, again potentially based on 48-volt architecture, sometime after 2020. Lastly, Jeep and Ram will take over some of the production capacity of existing plants. The Sterling Heights, MI, plant that builds the Chrysler 200 will now build the Ram 1500; the Belvidere, IL, facility that produces the Dodge Dart will take over Cherokee output; the big Jeep facility in Toledo, OH, will be used for increased Wrangler demand. In 2015, according to FCA's numbers, car and van demand went down by 10 percent, but SUV demand went up 8 percent and truck demand 2 percent. Considering that these are high-margin vehicles, FCA can't ignore the math. FCA also won't build any new factories to supplement production to meet demand, but instead are reshuffling production priorities. Think of it this way: FCA is gambling on cheap gas being a permanent part of our lives, at least into the 2020s. By doubling down on SUVs and trucks, the company stands to win big, unless a spike in gas prices changes the landscape. FCA isn't talking about a Plan B, so they're all in. It'll be interesting to see how this plays out.

Junkyard Gem: 1993 Plymouth Sundance Duster

When Chrysler introduced the Plymouth Duster for the 1970 model year, it was a sporty-looking fastback coupe version of the Valiant, itself a twin to the Dodge Dart. The Duster looked cool, didn't cost much, and could be very quick with the right powertrain choices; it stayed in production until the Valiant got the axe in 1976. A few years later, the Duster name went onto a coupe version of the Plymouth Volare, and then the middle 1980s saw the Turismo Duster and its legendary "Cocaine Factory" television commercial. The very last use of the Plymouth Duster name took place during the 1992 through 1994 model years, when the name was applied to a factory-hot-rod version of the Sundance. That's what we've got for today's Junkyard Gem: a purple '93 found in a Denver self-service yard. Because this was the early 1990s, the Sundance Duster got a full complement of dramatic-looking decals in bright colors. Just as was the case with its Valiant, Volare, and Turismo predecessors, the underlying model name itself was downplayed on the car's badging. In fact, the only place I could find the word Sundance was on the dash and in the owner's manual. While technically hatchbacks, the Sundance and its Dodge-badged twin (the Shadow) had a three-box shape that hid frumpy hatchback lines. Sort of a trunk, sort of a hatch, like the hatchback-coupe Chevy Novas of the late 1970s. That made this car a hot hatch, and one that could keep up with the likes of the Volkswagen GTI and Geo Storm GSi. The 3.0-liter Mitsubishi 6G72 V6 engine made 141 horsepower, making this 2,727-pound member of the K-Car family very quick for its cheap sticker price of $10,498 (about $19,360 today). This one even has the five-speed manual transmission, for lots of tire-squealing, torque-steering fun. I've seen a few of these cars on race tracks, and they have no problem reeling in a same-era GTI on a road course. Of course, the 6G72 likes to blow up in spectacular fashion when abused, but you could— and should— say the same about 16-valve Volkswagen engines. The Sundance/Shadow got the axe after 1994, when the Neon appeared as a more modern replacement; that meant the end of Lee Iacocca's Chrysler-rescuing K family in North America. This car started out in Denver and will be crushed in Denver. This content is hosted by a third party. To view it, please update your privacy preferences. Manage Settings.