By on May 11, 2010

Reuters reports:

Hyundai made a proposal to Chrysler earlier this year under which the U.S. automaker would build a truck for Hyundai based on Chrysler’s Ram truck platform… Chrysler Chief Executive Sergio Marchionne rebuffed Hyundai’s initial approach in February… saying the automaker needs to focus on its established turnaround plans under Fiat SpA. But Hyundai continues to look at truck options and could come back to Chrysler, according to two of those with knowledge of the talks, who were not authorized to discuss the matter because the closed-door discussions were preliminary.

Ram sales were down 23 percent last month, down 20 percent calendar-year-to-date, and down 24.3 percent in rolling 12-month totals. Hyundai is doing just fine without a pickup. Chrysler may have been crazy to turn down a shot at easy volume (that might have gone to Nissan), but Hyundai would be crazier still to ask a second time. After all, Volkswagen’s Chrysler rebadge, the Routan minivan, has sold only 14,580 units in the last 12 months.

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32 Comments on “Chrysler Rebuffed Hyundai Ram Rebadge Offer, Deal Still Possible?...”


  • avatar
    Dimwit

    I don’t get it. What is the attraction of rebadging a domestic? Why would anyone expect that the market buys your rebadge over the easily acquired domestic?

    If Hyundai was going to export these back to Korea or other markets I can see the plan. Not as an offer in the States. VW had a real brainfart when they went that route, so there’s your proof.

  • avatar
    HerrKaLeun

    I’m not a truck guy and hear mixed things about the RAM. but most people buy RAMs because of the name and reputation. The same truck as Hyundai wouldn’t sell.

    I think Hyundai want to get quick cash on (large) truck margins but don’t want to invest much money in a business model that will die out once gas gets more expensive again.

    Since Hyundai likely won’t be able to charge premium for the trucks, I don’t see them making profit considering the re badge cost and Chrysler not making any money to begin with.

  • avatar
    superbadd75

    I can’t imagine why Hyundai would want to put their excellent warranty on Chrysler’s garbage.

  • avatar
    Conslaw

    Carmakers rebadge for a very simple reason: the dealers want a product to sell. If you have a loyal customer who wants a pickup, you don’t want him to go visit another dealer. Rebadge sales aren’t usually high, but they are better than nothing. Most would-be Ram buyers wouldn’t shop Hyundai, but what if you have a Hyundai dealer around the corner, one that you have a positive experience with? If you need a truck, you might go with the Hyundai badge-job.

    • 0 avatar
      rudiger

      Yeah, if the price was right, it sounds like a no-brainer to me. For the cost of a few new emblems and a different grille, Hyundai gets a truck to sell. Volume might not be so great but, hey, they don’t need to sell a lot to recoup the minimal investment.

      Probably not exactly accurate to compare the Mitubishi Raider, either, since the bottom has completely fallen out of the compact pickup market in its entirety. The Toyota Tacoma has that one all sewn up with even Ford thinking about discontinuing the distant second, decades-old Ranger. You know a market’s bad when the number 2 seller is thinking about throwing in the towel.

      Hell, even the minivan market isn’t that bad (yet).

  • avatar
    Roundel

    Ask Mitsubishi how well the Raider sold…
    I don’t think Hyundai would be this stupid… If so, good on Sergio to reap some profit.

    • 0 avatar
      Syke

      Somehow I have a feeling that Hyundai dealers would be more effective selling Ram’s than Mitsubishi dealers have been selling Dakotas. The name on the hood ain’t gonna hurt, and the Hyundai dealer network is a lot more effective.

  • avatar
    Ion

    The Routan isn’t selling so bad………. for a Volkswagon. 14580 is close to, if not more units than Hyundai sells Genesis and in april or march the Routan was around 50 units short of outselling the Passat sedan.

    • 0 avatar
      Roundel

      Check your local Enterprise location… you will see where the Routans went.

    • 0 avatar
      cdotson

      Roundel…I’ve seen plenty of Dodges/Chryslers at Enterprise, but not yet seen a VW.

      There are two different Routans in my suburban neighborhood in the metro Richmond, VA area – hardly metropolitan. It’s also far from a high-rent neighborhood that would more typically be Euro badge-snobs. The ex-urbs further out have much more that type of resident, but I haven’t cruised them looking for minivans. As a point of reference, I can only vaguely recall maybe a single 2008+ model of a Chrysler/Dodge minivan within my neighborhood. Lots of Odys and Siennas though.

  • avatar
    AJ

    Sounds like Hyundai is after some truck technology, and maybe even thinks it can end up owning it? I would think if Chrysler’s sales keep going down, aren’t they going to again end up in the same mess as before (or are they still in it?). Maybe Hyundai can buy the brand. RAMs are actually nice trucks… especially with a Cummins.

    • 0 avatar
      Robbie

      Is there such a thing as “truck technology”? It seems to me that building a truck isn’t particularly hard in terms of engineering…

    • 0 avatar
      bd2

      Hyundai already makes trucks, including heavy duty commercial trucks – plus Kia has the BOF Borrego which could easily be formatted into a pick-up.

      What’s stopping Hyundai is the 25% import tariff on foreign built pick-ups; a rebadge would enable Hyundai to see is there is enough interest in a Hyundai truck-line (much like what Honda did w/ the Passport) in the US and whether it is worth it for Hyundai to invest in a manufacturing plant for pick-ups down the road.

    • 0 avatar
      windswords

      Robby,

      If building full size pickups were as simple as you believe, everybody would be doing it. But obviously it’s not.

      bd2,

      I think you broke the code. Hyundai wants to see if they can play in this market. Then they will build capacity here and make their own vehicle. They are hoping that Chrysler is desperate enough to go for this. Sergio sees thru it and is not falling for it. Why would you want to help someone be your future competitor?

  • avatar
    willbodine

    I seem to recall that Nissan doesn’t plan to renew the Titan. That would make a better Hyundai than a Ram.

    • 0 avatar
      Mercennarius

      Nissan is building a new Titan. Nissan had originally started plans to work with Chrysler on a joint project that would result in a Nissan/Chrysler Titan replacement, when the economy fell so did the Chrysler truck deal. Nissan had to drop all plans with Chrysler and go back to building the Titan 100% in house like the original Titan was. This is why its taking a while for Nissan to release a replacement, the next gen Titan is still about 2 years out but its on its way and 100% Nissan. Thank god…

  • avatar
    toxicroach

    Well, I guess people like Rams. A Ram with a Hyundai warranty might do alright, really. I mean, Hyundai will be around in 10 years. Chrysler… not so much. Get the guys who want Rams but don’t want Chrysler.

    • 0 avatar
      gimmeamanual

      Toxic,
      You and I are on the same page. If you could get a Ram with a 10-yr warranty, at one would assume about the same cost, why wouldn’t you?

  • avatar

    Why foreign makes want into the fullsize truck market is understandable, but most simply don’t have a chance. Especially with a rebadge, the typical fullsize buyer will stick with the “American” make. New buyers into the market seem unlikely in the near future.

  • avatar

    It sounds pretty simple-build a full size truck but the real work world sorts out pretenders pretty fast.Put a Ram/Dodge on an oil rig site and let the rig hands pound on it for a year and it’ll still be around-no doubt after some pretty serious repairs but it’ll still be around.Toyotas and Nissans will be around too…as new fridges.Hyundai knows that…

    • 0 avatar
      PartsUnknown

      Really? Check this out:

      http://www.toyota.com/tundra/deconstructed/

    • 0 avatar

      that my friend, is an advertisement-I come from oil country and the fact is they don’t use anything but domestic trucks for work in the oil patch.Aside from the size advantage found in one ton trucks and big torque diesels you just don’t find Tundras near too many rigs.

      Those roads that the Texas ranchers use are like an interstate when compared to a muddy rig road.Most of the time a truck on a site has a big dozer attached to the bumper-that’s just to get around a muddy horrible mess.

      The Texas guys also respect equipment-rigs hands don’t so the trucks pay a huge price at the hands of operators.I’m not saying that non-domestic truck builders couldn’t build something that would stand up to the oil patch-I’m just saying that it hasn’t happened so far…

    • 0 avatar
      PartsUnknown

      Jerry,

      I realize it’s an advertisement, but I thought it was interesting anyway.

      I think the Tundra faces a huge uphill battle in commercial, industrial and agricultural applications because, 1) the domestic trucks are excellent and 2) there’s a bias against foreign or “Jap” trucks.

      I understand your point about the rigorous use trucks are subjected to by the oil rig guys, but it also reveals a contradiction in your comments: if the oil guys don’t use anything but domestics, then how can you (or they) be sure that the Tundra wouldn’t hold up to that level of abuse? That doesn’t make much sense. That leads me to believe that it is just an assumption, despite that fact that, on paper, the Tundra is equivalent to, or better than, the domestics in the specifications that count (excepting the one-ton/diesel thing).

      I think this is where a combination of bias and satisfaction with a particular Big 3 brand comes in. I don’t know that it means the Tundra isn’t built to withstand rigorous use.

      A note, I don’t own a Toyota (I drive a Honda) and I’m not anti-domestic (wife’s car is a Ford Taurus X).

  • avatar
    gslippy

    Message to Hyundai: Bad idea. Don’t be beguiled by the ‘me-too’ mentality. Stick with the winning formula you have. Truck buyers will spot a Ramdai a mile away, and purchase the Ram instead.

    If you want to sell a truck, develop your own.

  • avatar
    npbheights

    Why in the heck would Hyundai want to sully it’s reputation for quality by selling a Chrysler product. I drove a friend’s 65,000 mile 2006 RAM a few weeks ago. It had a mis and under the ‘rug’ on the dashboard was the famous RAM collapsing dashboard. What junk. Hasn’t Chrysler been building cars since the 1920′s? When are they going to get it right?

    I love the look of the Challenger and wanted to buy one, but Chrysler quality had me paralyzed in fear. I actually went to the dealership to look at an SE about a year ago. I’ll never forger it.. I popped the hood and the front of the engine has this big aluminum piece on the front that looked like it had hairline cracks all over it. The black dashboard looked like it had this chalky residue all over it. Knowing what happens to Chrysler dashboards, I was spooked by that.

    The Routan makes more sense. VW has nothing to loose reputation-wise by selling Chrysler.

  • avatar
    cdotson

    I’m not a would-be Ram buyer, but I’m a Ram owner (2002 1500 quad cab 2wd sport package manual V8…rare as hen’s teeth). This past weekend the family and I shopped a 2011 Sonata as we’re sensing the need to acquire another vehicle soon. We’d rather have a minivan, but the leading contenders will both be updated to some degree later this year (Honda and Chrysler) and I’d rather wait to see if 1) I like the updates better and 2) if I don’t the current ones should get cheaper. The sedan would be my commuter if/when we get a minivan later.

    Personally I like the exterior/interior styling of the VW Routan better than the Chrysler T&C (which in turn beats the Dodge out of contention), but buying Crisisler’s bailout boats gives me heartburn and I’m not confident in their long-term support. This makes me equally nervous about the VW – why should I expect them to be able to acquire OEM-specific parts should Chrysler start pushing daisies? Unless someone knows better than I the assumption I will operate under is that VW leans heavily on Chrysler for parts/service items and wouldn’t have the ability to fend for themselves down the road. The same would be true of a Hyundodge truck…what good is the 10yr powertrain warranty (my Ram came with a 7 year at the time) or even the 5yr full warranty if the OEM that provides parts won’t be around that long?

  • avatar
    Mike66Chryslers

    Hyundai should partner with Mahindra to sell their diesel-powered compact pickups, instead of Mahindra trying to go it alone in North America.

  • avatar
    Carlson Fan

    I’m sure they market research but I just can’t figure out who would buy this. I would think most Hyundai shoppers don’t have the budget for a full size truck. Unless they plan to stock a bunch of standard cab, V6 powered, 2WD base models. But no one buys those anymore. Everyone wants them loaded up with all the goodies.

    • 0 avatar
      George B

      Hyundai is a growing company that can stand behind their warranty. Chrysler is basically a dead company that would quickly disappear if financial life support was withdrawn. Therefore, the same exact vehicle can command a higher price sold through Hyundai compared to Chrysler.

      The local Hyundai dealer near my house has large numbers of the upper trim package Sonatas on the lot and smaller numbers of the base model. I would guess that Hyundai customers would want a truck with a good set of standard features at a good price, not basic model at a lower price.

  • avatar
    Rod Panhard

    What about the idea that there are areas in the U.S. where one may find a Hyundai dealer, but not a Chrysler? So if the local Hyundai store has pickups, perhaps the truck shopper will come in, try out a truck and return one day for a higher-margin sedan or econocar. I dunno, this makes sense to me. But then again, so did the idea of Chryser becoming a contract-manufacturer for anyone else back when Cerberus was running the joint.

  • avatar
    peteinsonj

    This is a brilliant move by Hyundai, really.

    Just like Genesis, Equus — they are putting a toe in the water, to learn about the market, buyers, and just, quite frankly, to get started.

    It doesn’t need to be a rousing sales success or even close to perfect. In 5 years (sooner?) they’ll likely have their own platform — this will give them say, 5 years of experience.

    That’s a good thing for the dealers, even greater for the brand.

  • avatar
    Rusted Source

    Seems to me this is more about the messaging than the motoring.

    “We gonna slap a huge slanted oval H on a monster big truck, and sell it for a gud price. Then y’all are invited for some Bar-B-Q down in Montgom-ray, Alabama. We’ll drink some beers, watch some college football and talk about how great it is to be American.”

    The original plan was to have you over for some kimchi and noodles to discuss South Korea’s chances of winning the World Cup, but that got scrapped.


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