Tagged: Chrysler

Toyota reported a sales increase in May of 87% compared to the same month a year ago - when the company's vehicle production had plummeted due to the tsunami hitting Japan in March.  

There were more selling days this month than last May, but it is still a robust recovery from the disaster, which reduced inventories on Toyota dealer lots and sent some customers to other car companies.

Toyota remains number three in overall sales in the U.S., however, just behind Ford, which saw its sales increase 13% in May.

Chrysler's new car sales have been improving faster than almost any other car company in the U.S. in recent months.

But the company has also been relying on subprime borrowers more than almost any other car company.

That's according to Edmunds.com.

People with good credit can usually find a car loan with a four percent interest rate.

But a growing number of Chrysler's customers have poor credit - and their loans have 10 percent interest rates.

Edmunds analyst Jessica Caldwell says it's definitely boosting Chrysler's sales, but there are risks.

"I think subprime can tarnish your image in a way," she says.  "If you have a high percentage of subprime borrowers, people start to catch on or think that perhaps your brand isn't as prestigious as you would want to think it is."

Even though subprime car loans are riskier, there is still a relatively low rate of default.

People are much more likely to default on a subprime house loan than a subprime car loan. 

There’s an old Russian saying that, even, if you covered the world with asphalt, eventually a crack would form.

And in that crack, grass would grow. I was reminded of that yesterday by an Italian businessman my age, a man who is betting on green shoots coming through a town caked with many layers of asphalt. His name is Sergio Marchionne, and he is the CEO of a company called Fiat. Three years ago, he did something many at the time thought stupid. He took over a dying bankrupt company.

Chrysler says its Jefferson North Assembly Plant in Detroit will forgo the traditional two-week shutdown this summer.

The unusual move will help the company keep up with strong demand for the Jeep Grand Cherokee and Dodge Durango. 

Sales of the new Durango are up 33% from last year, and sales of the new Grand Cherokee are up 44%.  

The factory's employees are already working nine hour shifts plus two Saturdays a month, but Chrysler spokeswoman Jodi Tinson thinks they don't mind.

"Considering where we have been over the last couple of years, I think there is a very positive feeling that these vehicles are being so well received," says Tinson.   "And they (workers) are reaping the benefits by being able to work some overtime."

Chrysler had been planning to hire 1,100 new workers at the plant next January but will move that ahead to this November.

Chrysler will start renting office space in a downtown Detroit skyscraper later this year.

Chrysler’s CEO and other business leaders have already re-christened the building “Chrysler House.”

Chrysler will move only about 70 employees into the former Dime building in the heart of downtown Detroit. But CEO Sergio Marchionne says it reflects Chrysler’s commitment to “put down roots” in the city and the region.

Marchionne says the resurgent Chrysler sees its own fortunes tied to Detroit’s.

“The people of Detroit and this region have contributed to making our country great again with their talent, their commitment, and their sweat," Marchionne said. "Detroit is the place that we feel at home. That’s why we’re proud to say that from now on, this building is going to be known as Chrysler House.”

Marchionne also noted Chrysler’s plans to “substantially expand” its industrial presence in the city. The automaker plans to re-open one Detroit assembly plant, and up production at two others by next year.

The move is also another win for the city’s central business district, which has announced some major new tenants in the past few months.

Quicken Loans CEO Dan Gilbert has been one of the key figures pushing to revitalize downtown with his Detroit 2.0 initiative.

“Together we are creating an urban core in downtown Detroit, that will be a spark of the entire region, that will have jobs, growth, and excitement,” Gilbert said.

Marchionne says Chrysler employees will move in once the space is refurbished, likely sometime this summer.

The Detroit Free Press also reports that Chrysler has now committed $3.3 million to help build a light rail project in downtown Detroit. The M-1 rail project will jumpstart with funds from private backers. It's still awaiting approval from city, state, and federal officials.