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