Ram HD Strategy: Preemptive Incentives
It’s 2009, and Chrysler Group is still hugely dependent on Ram sales to keep dealer volume flowing. Not that there’s anything wrong with pickups per se, but dependence on a shrinking market (down 34 percent year-to-date, compared to 27 percent reduction for all light-duty vehicles) is never a good thing. Cutting into profits to keep your share of said declining market is even less of a good thing. And yet Chrysler is planning on doing just that, cutting starting prices on 2500 and 3500 Heavy Duty Rams by $1,970. According to Automotive News [sub] Ram 2500 regular cab 4×2 with a 5.7-liter Hemi V-8 will start at $28,165, including shipping for the 2010 model year, despite offering more equipment than the outgoing model. Why? In a word, desperation. “There’s not a lot of strength in Chrysler’s portfolio right now, so they’re trying to give it its own identity,” says Edmunds Editor Karl Brauer. Except that “won’t sell unless they’re discounted to the hilt” was already part of the Chrysler portfolio’s identity. The only difference with the Ram is that it might just sell. As Cash-for-Clunker-era sales results prove, even huge rebates (on top of record manufacturer incentives) don’t do much to move Chrysler’s moribund car lineup. So why not try massive discounts on massive Rams? How much worse could (will) it get?
"As Cash-for-Clunker-era sales results prove, even huge rebates (on top of record manufacturer incentives) don’t do much to move Chrysler’s moribund car lineup." Let's try to be accurate journalists. Chrysler sold out of PT Cruisers, Calibers, and Jeep Patriots.
Tell me about it. I just spent this afternoon in the local Chrysler dealership for my '06 Dakota truck I bought there new. Needs an $1,100 solenoid/torque converter job. I shoulda gone to the Toyota dealer across the street.
They need to stop thinking of these as 'discounts,' despite what edmunds.com says. This is because there is no official handed-from-above number of what is the proper MSRP. The market determines the price. If the MSRP is a fiction, let's realize it and stop pretending. These are not discounts. These are just attempting to find the real world price level at which people will actually buy these things. They're not doing us a favor or offering us 'discounts.' They're fighting for survival and trying to sell a product. In fact, they're finally just facing reality, and stopping trying to use the no-choice price reductions as though they were doing the buyer a favor by offering urgent spectacular discounts.
Get that new Power Wagon down into the high 20's, and it's starting to make sense as a "deer season in the Sierras" kind of truck with a camper on the back :)