Chrysler Thinks Ram Truck Can Gain Share
The Wall Street Journal reports that "Chrysler LLC is betting its new Dodge Ram pickup truck, coming this fall, can pull customers from rivals." Dodge is finally offering a crew cab version and is counting on it to for super-sized help. "I don't think there's any question that we can gain market share," said Ken Zangara, a Dodge dealer in Albuquerque, N.M. "The question is how big will the overall market be?" Yeah, that's the question alright! When even the dealers offer qualified optimism for a new product you know things are bad. Dodge has massive overcapacity in trucks with three factories poised to crank out over 600k trucks per year compared to 2007 sales of about 358k units ( this year's numbers are even worse). Ram sales tumbled 24 percent so far in 2008, which means Chrysler has 1.5 truck factories too many. UPI and others report a massive glut of used trucks on the market which are both competing against new truck sales and killing trade-in values for potential new truck buyers. Year on year trade-in comparables are down 14 percent. A nose job and crew cab option are not going to lift Dodge out its permanent third wheel status. But not to worry, soon Nissan will get a version of the Ram to not sell.
"Anyone one criticizing Toyota for chasing a larger piece of a smaller pie?" Actually, yes. Many have questioned the wisdom of Toyota making an over $2B investment to build a new factory in San Antonio to go after the shrinking US large truck market. The difference is that Toyota can afford to make some sub-optimal decisions while Chrysler is not in such a position. I don't think anyone, even inside Chrysler, expects the redesign to vault Dodge trucks up into anything even close to parity with Ford and Chevy/GMC in truck sales. Thus the permanent third wheel characterization. Toyota is still in a distant fourth place and the Nissan Titan was such a failure that Nissan is quietly turning over production to Chrysler's Mexico truck factory. I wonder how you say Hemi in Japanese?
Actually no. All the criticism I've heard is that the truck has had teething problems and is not the usual Toyota bedrock reliability. As for having a true full size pickup, Toyota was admired for going after the "last bastion" of the Detroit 3. All the talk was about how this would put pressure on the domestics. I never saw a comment like "how can Toyota justify this with gas prices rising and fuel economy becoming a concern for customers".
Of course now might be the best time to get into the truck market, ironically. It might be better to have a product in the market ready to scoop up market share when the other producers go belly-up. 2 billion is about 2 months profit for Toyota, so its not like they are in any danger from the move, and they are positioned to be the one of the few truck manufacturers not in Chapter 11 soon enough.
@windswords: Actually, I heard both. Only people that didn't want to hear it didn't.