By on November 30, 2009

All my ex-best sellers live in Texas

We noted earlier that Chrysler’s turnaround is dependent on Ram and other truck-based models to maintain the steady profit increases projected in its five-year plans. CEO Sergio Marchionne confirmed the importance of body-on-frame vehicles to Chrysler’s US lineup in a recent interview with Automotive News [sub]. “I think it will be very stupid for us to assume the same type of European style and sizing which has driven the automobile portfolio of Fiat Group will prevail in the U.S.” Marchionne tells AN’s Luca Ciferri. Marchionne says Chrysler’s US lineup of full-sized pickups, SUVs, large cars and minivans will see their fuel efficiency improve to keep up with pressures on the market, but that the US linup will not suddenly downsize or work away from its traditional strengths. Marchionne even aknowledged that the Ram brand would continue to be a crucial profit center, just as Fiat Professional-branded  commercial vehicles drive much of Fiat’s profit in Europe. But as another report in Automotive News [sub] explains, the truck market is continuing to erode underfoot. Chevrolet truck marketing executive John Schwegman explains that

in 2005, buyers who chose pickups “primarily for image” accounted for 200,000 to 250,000 annual sales. That fell to about 100,000 in 2008. This year, he says, only about 50,000 personal-use buyers will drive home full-sized pickups.

Ford analysts add that personal-use truck buyer numbers have fallen industry-wide by nearly 200,000 between 2003 and 2008. About 20 percent of the segment fit this category in 2003, making up an estimated 455,000 buyers. Even more troubling is Ford’s estimate that 43 percent of the truck market remains occasional-use buyers, who buy trucks to haul boats and trailers. Under continued pressure, more Americans could be forced to give up such frivolities, or look to the swollen used truck market to fill their needs.

Not that Chrysler’s truck mavens seem to be worried. While Ford and GM reps cite troubling statistics, and their refocused strategies, Chrysler’s Ram brand CEO Fred Diaz indulges in the gung-ho optimism that was the cause of much eye-rolling during his presentation at Chrysler’s five year plan announcement.

I know what the data say about the full-sized truck market, and I’m convinced the best way to fight the trend is to work extra hard to understand what personal-use customers want — but do it without compromising Ram’s reputation for hard work and capability

Nobody is ready to declare the final death of the personal-use truck market, but it’s clear that future growth will be determined more by needs and less by wants. A turnaround in the housing market would revive pickup sales, and there’s already anecdotal evidence of a recent turnaround in personal-use truck sales because, as last year’s gas price shocks fade from the market’s short-term memory. Ultimately though, Ford and GM believe the market for trucks could climb from 2010’s 1.2m unit estimate to two million units in the next three or four years. But that number won’t happen until construction firms start buying large numbers of trucks again, something analysts say won’t take place until after 2010. Meanwhile, the disappearance of personal-use truck drivers will impact profits as much as it has volume. The highest-profit trucks and SUVs were strictly personal-use machines like Harley Davidson F-150, Ram Lone Star, and other luxury-trimmed trucks. Though this spells reduced US-market profits for all of the Detroit automakers, none seem as vulnerable to the loss of the personal truck market as Chrysler.

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12 Comments on “Chrysler To Stay Truck-Heavy In Weak Personal-Use Market...”

  • avatar

    My old Dakota is smallish, simple, and gets 31 mpg on the highway.  That’s why I bought it, and that’s what I want in a new truck.


    • 0 avatar

      Volumes may be smaller, but I would guess they figured that in their plan since volumes were already reduced.  Besides, this truck just came out – so tooling is paid for already.   Quite frankly, styling wise it beats the heck out of anything out there, and Consumer Reports now recommends it.

  • avatar

    Well duh! Of course Chrysler is going to stay truck heavy right now. What else do they have? Are they going to triple Sebring/Avenger production? Who would buy them? Right now trucks/minivans/Jeeps are the only thing Chrysler has to work with, until the FIAT product revisions come on line starting next year. Cut em a little slack!

  • avatar

    Is this a better plan than selling trucks and SUVs to recoup the losses on small and midsize cars?

  • avatar

    Weak as the market may be the F-150 and Silverado/Sierra are still the top selling vehicles in the US.

  • avatar

    The new (2009/10) Dodge/RAM pickups are very nicely done. Owners on Edmunds give them high marks. Interior (for once!) uses class leading design and materials.  Hopefully, future FIAT lead revisions will continue these desperately needed improvements. Next up will be mildly revised Caliber, let’s see how that comes out.

  • avatar

    Build me an good looking S-10 sized crewcab pickup that gets 30+ mpg with a 150HP engine and Honda like reliability and I’d be checking them out. And yes a GOOD four cylinder and 5 speed manual tranny would be acceptable as long as the truck didn’t weigh 3 tons.
    I have no plans to buy a gas sucking pig to drive back and forth to work.

    • 0 avatar
      Martin Albright

      Joe, as much as I’d like to agree with you, I don’t think such a vehicle would be viable.  I actually owned something like that:  A small, light truck that got good MPG.  It was an 84 Mazda B2000.  It didn’t have the crew cab, but it would go an honest-to-God 400 miles on 11 gallons of gas.  It was also slower than molasses running uphill in January, had manual steering, no AC, no stereo and a simple vinyl bench seat. 

      It was a nice vehicle for a single guy who didn’t have a lot of money to spend (I was a buck sergeant stationed at Fort Lewis, WA) but I have to be honest and admit that the MPG is about the only thing I miss about that truck. 

      The thing is, “mid sized” trucks didn’t get to their current oversized proportions by accident.  They got that way because when consumers had a choice between a smaller and more economical truck, or a slightly bigger and more powerful one, they chose the bigger one almost without exception. 

      Cognitive Dissonance is the fancy name we give to the fact that the gap between what people say they want, and what they will actually spend their money on is often a chasm that would rival the Grand Canyon. 

  • avatar
    Martin Albright

    My name is Ram Dealer, and my inventory lot is full. 

    (and likely to stay that way.) 

  • avatar

    I use an 04 2500 Ram, and 05 3500 Dump truck for my roofing business. I have an old 78 200 4×4 that I use to plow the driveway with, my 07 1500 is for personal use, and will always be.

  • avatar

    2013, the year Ram takes industry leadership. How sweet it is for Mopar fans when we look back at articles like these.

  • avatar

    BTW, they did multiply Avenger and Sebring/200 production 3 times. No one saw that coming either. Hate him all you want but Olivier Francois was the man behind the “Imported from Detroit” Eminem ad and the new Dart ad.

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