The short interest in Fiat Chrysler’s (NYSE: FCAU) stock soared 23%, or over 13 million shares, for the period which ended December 15. The company’s share price may be one reason for the negative bets. Another is its overall sales performance

The Fiat Chrysler numbers stand in contrast to those of rivals GM (NYSE: GM) and Ford (NYSE: F) each of which had a sharp decline in short interest.  Fiat Chrysler’s short total is 72 million, 9% of its share float. GM’s short interest fell 3.5 million, or 8% to 40.7 million, and is less 3% of the float. Share sold short in Ford fell  17.7%, or 20 million, to 92.8 million, which is 2.4% of its float

Fiat Chrysler had a bad year, particularly in the U.S. Its sales have been red hot for several years. Through the first 11 months of 2016, they are higher only 1% to 2,051,796. As was true for most companies which sell cars in the U.S., its SUV and truck businesses saved it. RAM sales rose 11% to 492,254 in the first 11 months. On a less positive note, the RAM pick-up continues to trail Ford F-150 and Chevy’s Silverado in sales.

Jeep also turned in extraordinary results, with sales up 8% to 843,217 in the first 11 months. However, the best selling Jeeps, the Wrangler, Cherokee, and Grand Cherokee lost almost all of their sales momentum. If Compass and Renegade sales had not been extraordinary, the division would have stumbled

Sales of flagship brand Chrysler fell 27% to 215,196. The number would have been much worse if not for the new Pacifica, which had no sales last year and 52,083 through the first 11 months.

Dodge sales fell 2% to 470,529 in the first 11 months. Its troubles would have been much worse of Caravan sales had not risen 35% to 120,991.

Fiat sales fell 19% for the period to 30,136. The figure would have been uglier, but sales of the 500X rose 40% to 10,869.

The final measure Wall St. watches with all car companies is consumer quality perception.  Recently 24/7 Wall St. made an assessment of this:

Fiat Chrysler Automobiles N.V. (NYSE: FCAU) brands usually do poorly in surveys of car quality. In the Consumer Reports’ Annual Owner Satisfaction Survey, all four of the company’s brands did poorly, and two did very poorly.

The survey covered 29 brands. The measure was:

Our brand rankings represent owner sentiment across each brand’s product line. (Model satisfaction is determined by the percentage of owners who responded “definitely yes” to the question of whether they would buy the same vehicle if they had it to do all over again.) To determine brand love—or disdain—we took a straight average of the satisfaction score for each brand’s models.

Fiat ranked 29th, Jeep 25th, Dodge 23rd and Ram 17th. However Consumer Reports said:

Meanwhile, Ram, a brand that sells just pickup trucks and vans, took a huge tumble from last year’s 5th place ranking to 17th.

Fiat Chrysler cars and light trucks have made similar grades in J.D. Power and American Customer Satisfaction Index studies.

Oddly, Fiat Chrysler executives have barely acknowledged the problem, and they have not set out any road map toward improvements. That should not give owners, dealers or prospective buyers much comfort.

Quite a hurdle to overcome

 

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