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Chrysler Sales at 15-Year High, but Rejected Union Contract Weighs

Year over year, sales rose 14% at Fiat Chrysler Automobiles N.V. (NYSE: FCAU) in September to 193,019 units, the company’s best September sales level since 2000. The Jeep brand posted a sales gain of 40% year over year for the brand’s third-best sales month ever. The Jeep Compass posted a sales gain of 54%, the Cherokee posted a best-ever monthly sales gain of 38%, and Wrangler sales rose 28% to notch the model’s best-ever September sales.

Analysts at Kelley Blue Book (KBB) had projected September sales at 188,000. KBB analysts also reported that Chrysler’s average transaction price last month was $34,809, up 0.1% compared with the average price in August and up 4.1% year over year for the month.

While sales are strong, the company’s relations with the United Auto Workers union are not. The union is expected to announce later Thursday that its members have rejected Chrysler’s contract offer. The proposed contract would have maintained the two-tier wage system that the company and the union agreed would cap wages at for employees hired after 2007 at $25 an hour, up from the $19-an hour cap currently in place, but still below the roughly $29 an hour paid to workers who began their employment prior to 2007.

The company’s Jeep brand sold 77,201 units in September. Jeep has now set a sales record for 24 consecutive months. The company’s Jeep Renegade sold 7,924 units in its sixth month of availability.

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Ram pickup sales were flat in in September at 36,598 units, after posting a 6% year over year sales increase in August. Last year, Ram sold 36,612 pickups in September. For the year to date, Ram pickup sales are up 3% to 330,643 units, and total brand sales are up 6% to 358,488 units. Ram brands had their best September sales since 1996.

Year over year, sales of the company’s Chrysler brand fell 5% as sales of the new Chrysler 200 rose just 3% in September to 11,364. Year to date, Chrysler 200 sales are up 96%, and sales of Chrysler-branded vehicles are up 12%.

The company’s Dodge brand sales rose 3% year over year in September and are now down 14% for the year to date. The bright spot for the brand came in sales of its Challenger, up 26% to 4,552 units in September. Sales of the venerable Caravan dropped 6% in September and are down 38% for the year.

Chrysler projected a seasonally adjusted annual rate of sales in the United States from all manufacturers at 18.4 million units for 2015, sharply higher than last month’s projection of 17.8 million. The company ended the month with 76 days supply of inventory, up from 74 days of supply at the end of August.

Chrysler’s shares traded up 1.1% early Thursday, at $13.36 in a 52-week range is $8.54 to $17.08.

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By Paul Ausick


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