Sergio: Ram Incentives Are Here to Stay, and Who Cares If No One Builds Us a Small Car?

Steph Willems
by Steph Willems
sergio ram incentives are here to stay and who cares if no one builds us a small

Ram’s September sales surge grew its share of the full-size pickup segment, but only after Fiat Chrysler Automobiles threw incentives at buyers that easily topped those of its Detroit Three rivals.

Expect that to continue, says FCA CEO Sergio Marchionne. While some automakers, namely Ford, have slowed production to keep pace with lower demand, FCA sees an opportunity to spend more to sell more.

Speaking to industry analysts recently, Marchionne said FCA won’t slow down production of Ram trucks, nor will it ease up on the incentives that brought record sales last month, Wards Auto reports.

“I have no indication that would suggest we’re going to take production down in Q4,” Marchionne said. “You can use whatever definition of capacity utilization you’d like, but we’re over 100 (percent) of that number.”

The automaker aims to introduce its next-generation Ram 1500 in January 2018. That model comes with the tightest of timelines, so much so that Marchionne cut engineers some slack and allowed them to make some of their own decisions. In the meantime, Rams will continue to be sold with a pile of cash on the hood.

Average incentive spending in the Ram pickup range grew $1,100 between August and September, meaning customers enjoyed discounts averaging $7,100 per vehicle last month. Compare that to the roughly $5,200 average for the Ford F-150 and $5,650 for the Chevrolet Silverado. Ram sales jumped 29 percent over the previous September, boosting market share from 20 percent a year earlier to 25 percent.

Expect those boosted incentives to continue for the next 90 days.

“We’ve taken a very hard look at our level of penetration in some of the key truck areas in the U.S.,” Marchionne said. “We spent a lot of time with the management team yesterday to try to understand how to pitch the position for the next 90 days.”

Despite industry-wide incentives topping those seen during the recession, Marchionne is so pleased at Ram’s performance that he doesn’t care about his dead or dying small cars. After appealing to the industry, no automaker stepped forward to offer a small car for Marchionne to rebadge. That’s okay, he claims.

Failing to find a replacement for the Chrysler 200 and Dodge Dart is the same as a “rounding error,” he claims, meaning it won’t impact the automaker’s balance sheet. The public loves trucks and SUVs, so why worry?

“We need to recognize this is not a fashion shift from passenger cars into utility vehicles and pickup trucks; it is a structural change,” he said.

FCA is notoriously capricious with its lineup, so it wouldn’t be surprising if the death of Chrysler and Dodge small cars isn’t permanent.

[Image: Fiat Chrysler Automobiles]

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  • Dwford Dwford on Oct 26, 2016

    The reason they don't seem small or midsize cars is that for DECADES Chrysler has never stuck with those market segments. Yes, they have had cars in them, but their commitment has been shaky, and they don't keep consistent names over time. GM and Ford finally figured out to keep the same name from one generation to the next, even if the last generation was mediocre (2015 Malibu). Customers don't trust them to stand behind their cars with future development, so every car is a poor investment in the eyes of the customers.

  • Matt3319 Matt3319 on Oct 26, 2016

    Chrysler would have kept on selling the 200 if it wasn't called the 200 for its second generation. Just like they did with the new Pacifica. If they could have named it something different than 200, which makes everyone think of the previous POS. How about Conquest or Chrysler Plummet?? Same goes for the Dart. I recall the pre-rusted 70's POS. They should have gone with Swinger or Diplomat!!!

  • LYNN DELANEY Mine is a 2001 Pure White Miata. I bought it at Concord Mazda. I love it but Imay be about to get rid of it I guess. It's been in my garage for quite awhile. Why? 1. I don't have a lot of money (I'm a retired teacher) And I've had issues with it that require financing. For example when you insert the key and turn it nothing happens. Why? I got it at Concord Mazda and somehow. it came to my condo shared garage to die and has remained such to this day. If you want to experience it you put the key in the keyhole and turn it but silence ensues and you wonder why but you know it's because the key was "programmed and it worked when you brought it home but not since.I'm told it requires a new battery but I've not had the financial energy to deal with it. I love my Miata but will I keep it? I'm unsure. Next step? Install a new battery...When it came home from Concord Mazda it was perfect for a quick minute. I tested it. I drove it around my block in Oakland, California just one time. That was the end of it. Since them I'm told it needs a new battery. It's a 2001. Shall I go ahead and splurge?
  • Dusterdude @El scotto , I'm aware of the history, I have been in the "working world" for close to 40 years with many of them being in automotive. We have to look at situation in the "big picture". Did UAW make concessions in past ? - yes. Do they deserve an increase now ? -yes . Is their pay increase reasonable given their current compensation package ? Not at all ! By the way - are the automotive CEO's overpaid - definitely! (That is the case in many industries, and a separate topic). As the auto industry slowly but surely moves to EV's , the "big 3" will need to be producing top quality competitive vehicles or they will not survive.
  • Art_Vandelay “We skipped it because we didn’t think anyone would want to steal these things”-Hyundai
  • El scotto Huge lumbering SUV? Check. Unknown name soon to be made popular by Tiktok ilk? Check. Scads of these showing up in school drop-off lines? Check. The only real over/under is if these will have as much cachet as Land Rovers themselves? A bespoken item had to be new at one time. Bonus "accepted by the right kind of people" points if EBFlex or Tassos disapproves.
  • El scotto No, "brothers and sisters" are the core strength of the union. So you'll take less money and less benefits because "my company really needs helped out"? The UAW already did that with two-tier employees and concessions on their last contract.The Big 3 have never, ever locked out the UAW. The Big 3 have agreed to every collective bargaining agreement since WWII. Neither side will change.