In With the Old: FCA Plans to Ram Its Way Through 2018

Unless you’ve been living under a rock, you know Ram will drop a new half-ton pickup at the North American International Auto Show in Detroit in January. It’s a big gamble redesigning a cash cow, lest the truck faithful turn up their noses at the new styling.

In the past, manufacturers have hedged their bets by simultaneously producing both the new and old styles, such as when Ford offered both the F-150 and F-150 Heritage in 2004. Now, Ram appears poised to deploy the same strategy in 2018, according to bossman Sergio Marchionne.

During last week’s FCA third-quarter earnings call, Marchionne disclosed that the company will continue making the current Ram through the calendar year 2018. Ram will have the manufacturing capacity to do so thanks to a retooled Sterling Heights Assembly Plant.

Sterling Heights will churn out the new Ram 1500 while the current bodystyle soldiers on at nearby Warren Truck Assembly Plant. More trucks on the ground is rarely a bad thing, as dealers understandably enjoy selling the high-margin machines. Plus, the extra capacity could give Ram a chance to knock Chevrolet’s Silverado down to third place on the sales charts.

Year-to-date, the entire light truck market is up 5.2 percent, with the Ram selling 374,901 pickups and the Silverado line finding 418,590 homes. Even with a new Ram on the horizon, that sales number represents a 3.8 percent increase over the same timeframe last year.

“My expectation is that we’ll run the old installation — and at least for the whole of 2018,” Marchionne said during last week’s earnings call. “Production capacity is confirmed, so it’s up to us to decide how long we run it.”

This author remembers it working at a Ford store in 2004, when we had the option of selling customers either the new F-150 or the F-150 Heritage Edition. Shoppers who wanted the latest and greatest were eagerly plugged into the new-style pickup, while those looking for value were shown the older model. Truth be told, it worked really well. July 2004 was the best month in our store’s history.

In most cases, manufacturers are able to offer the older version at a cut-rate price because development and tooling costs have been recouped ages ago. In Ram’s case, this will likely result in FCA initially cranking out top-dollar trims of the new truck to pad their bottom line and maximize transaction prices. The old style will be able to capture the lower-priced end of the market by offering heavier incentives without damaging the market value of the new truck. It’s a shrewd strategy, if the manufacturing capacity exists (and for Ram, it does).

If I occupied the manager’s chair at a Ram dealer, I’d be making damn sure my sales staff were strongly suggesting to customers considering a Colorado or Canyon that they can get a much bigger truck for similar money if they buy an old-style Ram. This is in addition to capturing a few brand loyal customers who are not cottoning to the new bodywork.

[Image: Fiat Chrysler Automobiles]