To make more Ram trucks, Fiat Chrysler reconsiders Mexico

Reuters / No Comments Share:
2019 Ram pickup trucks on display at the FCA Sterling Heights Assembly Plant in Sterling Heights Michigan. Reuters

MICHIGAN (Reuters) – Fiat Chrysler Automobiles NV’s new CEO is tired of being No. 3 in US pickup truck sales.

For in depth analysis of Cambodian Business, visit Capital Cambodia
.

With a strategy of loading up its revamped Ram 1500 full-size trucks with new features – ranging from 12-inch touch screens on the dashboard to large battery packs and electric motors to help adjust speed and gears and conserve fuel – the automaker is banking on a sustained surge in demand.

So chief executive Mike Manley is now reconsidering a decision announced in January to stop building Ram heavy-duty pickups at a plant in Saltillo, Mexico.

. .

That plant, and another in Warren, Michigan, between them would produce other Ram models and free up manufacturing capacity to make even more new trucks to eat into sales of Ford Motor Co’s F-Series or General Motors Co’s Chevrolet Silverado, and its higher-end GMC Sierra.

“We need to get ourselves into second” place, Mr Manley told Reuters exclusively in his first interview since taking over the No. 7 global automaker after Sergio Marchionne died suddenly. “Frankly, I don’t care which of the two I take share from.”

When US President Donald Trump was threatening action that would have imposed a 25 percent tariff on Mexican-made pickup trucks earlier this year, Fiat Chrysler said Saltillo would be “repurposed to produce future commercial vehicles.”

In 2017, Mr Marchionne had raised the possibility his company could move heavy-duty pickup production out of Saltillo, saying U.S. tax and trade policy would influence the decision.

“With a combination of Warren and Mexico building what we call the classic truck, we have enough production to increase output next year if it’s required,” Mr Manley said.

. .

“In my opinion it will be required. We are gaining share. Obviously I am looking for that to continue, but it’s an incredibly competitive segment,” he added.

The Ram and Jeep brands underpin the automaker’s North American business – which accounted for nearly 85 percent of Fiat Chrysler’s second-quarter pre-tax profit – and offset the struggles of its legacy Fiat business in Europe and operations in China.

Ford’s F-Series trucks have led the segment for four decades. In 2017, Ford had a 35.6 percent share of US retail truck sales, followed closely by GM at 34.2 percent and FCA with 22.3 percent.

Pickup trucks are the single biggest contributor to the Detroit Big Three automakers’ profits, so there is plenty at stake as they fight for market share.

In the battle for pickup customers, GM launched a new version of its Silverado truck designed with a focus on slashing weight and trimming production costs to compete with market leader Ford.

Phil Jansen, Fiat Chrysler’s head of product development, said when his team began redesigning the Ram 1500, they decided a lighter, all-aluminum body – which Ford uses for its trucks – was too expensive. GM executives reached the same conclusion.

But Fiat Chrysler took a chance that GM did not, and added a large battery pack and electric motor that assist with acceleration and shifting, plus deliver a smooth start-stop function that idles the engine when stopped in traffic, boosting fuel economy.

“It can save about this much fuel at an average stop,” said FCA electrification manager Brian Spohn, holding up a small tumbler of water.

Demand is so high, the company has pushed the screen’s supplier for as many screens as it can provide, according to a source familiar with production plans.

“We haven’t found the ceiling yet” for what US customers are willing to pay for additional features, said Jim Morrison, head of the Ram brand in North America.

“It is capable, if we wanted to, to push it up more from there,” Mr Manley told Reuters. “Clearly, having the capacity to fulfill our ambitions is important.”

Share and Like this post

Related Posts

Previous Article

HSBC helps boost FTSE 100 as markets recover from sharp falls

Next Article

Fangchenggang becomes main seaport gateway to Cambodia