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Fiat Chrysler hopes discounts, web can juice dormant auto sales

(Reuters) – With auto showrooms shut during the coronavirus pandemic, Fiat Chrysler Automobiles NV (FCHA.MI) (FCAU.N) on Wednesday reported a 10{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} drop in U.S. quarterly sales and moved to juice demand with bigger discount and a program allowing customers to buy vehicles entirely online.

FILE PHOTO: A Fiat Chrysler Automobiles (FCA) sign is at the U.S. headquarters in Auburn Hills, Michigan, U.S. May 25, 2018. REUTERS/Rebecca Cook

The automaker’s move toward online sales and home delivery breaks with a long U.S. auto sector tradition of manufacturers giving franchised dealers control of sales to consumers. Dealers have fought Tesla Inc’s (TSLA.O) efforts to sell vehicles directly to consumers through its website.

But the pandemic has been pulling auto retailing into the digital age, with dealerships shuttered across the country and sales likely to take a further beating in April as social distancing guidelines remain in place.

FCA shares fell 4.2{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} to $6.80 in early trade after the company posted a 10{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} drop in first-quarter U.S. auto sales, as the pandemic hurt demand and halted production from mid-March, although the company did not break out sales by month.

Hyundai Motor Co (005380.KS) said earlier that its U.S. sales fell 43 percent in March due to the pandemic. Other automakers also were expected to report lower sales.

“It goes without saying that the entire world is facing a tremendous challenge that is having a significant impact on business and our normal way of life,” Randy Parker, vice president for sales at Hyundai Motor America said in a statement.

FCA said its “Drive Forward program “allows customers to complete the entire vehicle purchase process online and from the comfort of their own homes.”

The system allows consumers to buy vehicles off dealer lots, trade in their old vehicle and apply for a car loan, FCA said.

The company also said that as of April 1 customers can take advantage of zero percent interest loans for 84 months and make no payments for 90 days on select 2019 and 2020 model vehicles.

FCA said it sold 446,768 vehicles in the first three months of 2020, compared with 498,425 units a year earlier.

Fiat said momentum in the first two months of the year was offset as the virus hit the economy in March. Its Ram pickup trucks were a bright spot as their sales rose 7{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} versus the first quarter of 2019.

Credit ratings agency Moody’s Investor Service expects global auto sales to fall 14{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in 2020, with light vehicle sales in the United States falling at least 15{3c4481f38fc19dde56b7b1f4329b509c88239ba5565146922180ec5012de023f} in the same period.

Reporting by Rachit Vats and Sanjana Shivdas in Bengaluru; Editing by Saumyadeb Chakrabarty, Anil D’Silva and David Gregorio

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