Chrysler’s New U.S. Sales Chief to Try to Repeat Canada Record
Chrysler Group LLC’s new head of U.S. sales will try to duplicate the gains he made for the automaker in Canada, where it’s almost tied for the No. 2 seller of vehicles and has already exceeded market-share targets set for 2014.
Reid Bigland, named to the post in June, also kept his role as chief executive of Canada operations and added oversight of the Dodge brand. Chrysler recorded a Canadian sales increase of 13 percent so far this year after a 26 percent gain last year.
“I think he’s going to take his plan and what’s done in Canada and drop it down on the U.S.,” said Bill Johnston, a Chrysler franchise owner and dealer council president in Canada. “Aggressiveness is what he’s going to bring to the U.S.”
Sergio Marchionne, chief executive officer of Chrysler and Fiat SpA, wants Chrysler U.S. sales to rise 45 percent this year. Chrysler’s rate of increase through July is less than half the target. Bigland takes the reins of U.S. sales as Chrysler prepares to bring to showrooms next year a new small car derived from Fiat (F) technology.
Chrysler U.S. sales this year through July rose 21 percent compared with last year, according to researcher Autodata Corp., based in Woodcliff Lake, New Jersey. Its market share rose to 10.2 percent in that time from 9.3 percent a year earlier.
Marchionne wants a U.S. market share of more than 13 percent in 2014, according to his November 2009 business plan. Fiat, based in Turin, Italy, took control of Chrysler during the U.S. company’s U.S.-backed bankruptcy and reorganization.
Auburn Hills, Michigan-based Chrysler’s U.S. sales growth has been driven by established vehicles, such as the Jeep Grand Cherokee, whose deliveries more than doubled through July to 63,869, that have undergone improvements.
“The real proof in the pudding is going to be over the next couple of years as they become much more active in the small-car market, a market that they even admittedly have been on the sidelines for,” Michael Robinet, vice president of IHS Automotive in Northville, Michigan, said in a telephone interview.
Chrysler will have to take a different approach to win new business, Robinet said. “Everybody and their uncle are putting more and more resources into small cars,” he said.
Bigland, 44, replaced Fred Diaz, who is now running Mexico operations along with overseeing the Ram brand.
Marchionne’s five-year turnaround plan called for Chrysler’s Canadian market share to expand to 13.8 percent in 2014 from as low as 11 percent in 2009. Chrysler captured 15.3 percent of the Canadian market through July, according to J.D. Power & Associates, a Westlake Village, California-based researcher.
Bigland navigated Chrysler’s Canada operations through the uncertainty of the automaker’s U.S. bankruptcy reorganization and faced challenges with the credit crisis in 2008 that left his operations without the ability to offer lease deals.
“We leased 55 percent of our vehicles in Canada prior to July 2008 and to this day our leasing is zero,” Bigland said. “It really created a significant adjustment for us as to how we went to market and the types of financing arrangements that we used to accompany our vehicles.”
Bigland also developed promotions in Canada for specific models, such as the Journey sport-utility vehicle.
Sales of the Journey rose 50 percent this year through July after rising 55 percent last year to finish as the year’s top-selling crossover in Canada, the company said. U.S. sales of the Journey only rose 2.9 percent through July, after a 9.8 percent decline in 2010.
“It’s got a lot of unrealized potential in the U.S.,” Bigland said of the Journey.
David Kelleher, a Chrysler dealer in Glen Mills, Pennsylvania, said he expects Bigland will put resources toward programs similar to the “No Payments for 90 Days” promotion announced last week and other sales events that draw attention while costing less than incentives of the past decade.
“That’s a very small cost item but it’s a heavy retail message,” said Kelleher, who sits on Chrysler’s U.S. dealer council. “He’s probably the most retail-oriented executive that I’ve ever come across.”
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