Dodge, Jeep, And Ram Discounts Are Biggest In A Decade

The good news is that FCA and PSA have just signed the dotted line agreeing to a 50-50 merger. The not so good news for FCA is that it has too many unsold cars at the moment and it only has itself to blame for the problem. You see, FCA has been using a data-driven production strategy to determine how many vehicles to build. Its dealerships, however, are not fans of this because they can't sell everything FCA wants to ship to them.

But according to a new Bloomberg report, FCA is currently making an all-out push to sell off tens of thousands of vehicles its dealerships haven't even ordered. This plan includes the most aggressive discounts in nearly a decade when the financial crisis was at its peak. Internal marketing documents seen by Bloomberg reveal big discounts on certain 2019 model-year Dodge, Jeep, and Ram models.

In fact, FCA sales staff have been asked to work overtime to pressure the automaker's 2,400 dealers to accept more vehicles and reduce the unassigned inventory to zero before Christmas. But why build more vehicles than FCA dealers can sell in the first place? Because reducing production means a lower return on billions invested in a vehicle, meaning it's often cheaper to overproduce and use incentives later on. This is apparently what's happening, though FCA denies this.

Then again, FCA had an oversupply of 40,000 unassigned cars in the third quarter of this year that was later downed to 5,000. However, the number increased to 60,000 in November and 70,000 in December. As of last week, the number was at 25,800.