Ram Production Strategy Takes Aim at Chevrolet

2018 Ram 1500 Rebel Sand Mojave II

Here's how it normally goes: When an automaker has a new model to build, the production plant needs to be shut down or slowed down to make the necessary manufacturing modifications. That downtime typically results in lost sales. Every moment delayed for the changeover is money lost.

But that might not happen with the next-generation Ram 1500, due out in 2018 for the 2019 model year.

According to Automotive News (subscription required), Ram may come out a huge winner, building the 2018 Ram 1500 at its current production plant while building the all-new 2019 Ram at a retooled plant. Both plants are in Michigan.

Much of this strategy hinges on Fiat Chrysler Automobiles, Ram's parent company, thoughtfully executing its plans to move pickup production from the old plant to the retooled one. Additionally, Ram should be able to offer better pricing for older, lower-end Ram 1500s, while the 2019 models will likely start out being heavily ordered in premium trim levels. The result could mean much stronger U.S. sales.

Ram and FCA are hoping this strategy works well enough to overcome the strong push recently from the mid-size pickup truck class, in which Ram has no offering, as well as the chance to better compete with the Chevrolet Silverado, which is a solid No. 2 in pickup truck sales. Look for Ram to make a hard push to become the No. 2 best-selling pickup in 2018, overthrowing the Silverado.

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Comments

They won't overtake Chevy. GM will discount their trucks as far as needed to keep the number two position. Ram should focus on quality and features, sales numbers will take care of themselves.

FCA's strategy is flawed. They need to target the number one full size truck--Ford F-Series. If they successfully do that, they'll overtake the number 2 truck, Chevy Silverado.

GM will never compete if they keep taking build designs from Luke Bryan

"Ram should be able to offer better pricing for older, lower-end Ram 1500s... The result could mean much stronger U.S. sales."

@mark williams

You can be sure that this tactic (I would hardly call it a strategy) has been thoroughly reviewed with top dealerships in the US to gauge their interest, and even gain approval.

From the dealer's perspective I'd want to know why I should ask my customers to wait even longer for the new models. Satisfying demand for all new RAM 1500 trucks with another retreaded truck model runs the risk of leaving money on the table.

The RAM 1500 is the crown jewel of their product line. Dealers are some of the smartest businessmen you've ever met. If this idea leaves them flat, you can be sure they'll raise hell.

GM did this same thing in 2007 with the Silverado/Sierra classic. The result was sales were pretty much flat with 846,000 in 2006 and 826,000 in 2007.

Another strike against this '2nd place' strategy is GM will be selling a new 2019 Silverado/Sierra accross the street.

I think this is more of a strategy to squeeze every drop out of the current platform than it is to take over 2nd place.

GM has deeper pockets than FCA, GM can discount their trucks into oblivion while FCA is scrapping by to even redesign the Ram 1500...

@Darklore That's not even a Silverado, it's a fricken Suburban, the author of that article has not credibility...

Ram can have 2nd place, they can steal sales from Frod, Frog, Fork, I mean Ford

This will only hurt Ford, haven't you seen the cheap plastic in the new Fords yuck.

This is the same tactic that FCA is using with the Dodge Caravan which is to sell a less expensive van with the tooling long since paid for alongside the Pacifica both of which are made in separate plants which will not effect the production of either. FCA needs these additional sales especially since their cars sales are faltering. I doubt this will cut into the newer Ram sales as much as it will add extra sales on tooling that has long since been paid for. Those who want the new Ram should be able to get them since each truck will be made in separate plants. Ram might not take away the number 2 spot from Chevrolet but it will give Ram additional sales that they might not otherwise have. It is more likely that the old Rams will be the lower trim value priced models and not the higher trim models that would compete against their newer Ram that is more profitable with higher trim models. This is what FCA is doing with the Dodge Caravan and Chrysler Pacifica with Caravan being the value priced lower trim older model and the Pacifica being the higher trim more profitable newer models.

They are going after the company that they tried and tried to get GM to buy them. Now that's funny.

This will only hurt Ford, haven't you seen the cheap plastic in the new Fords yuck.

Posted by: johnny doe | Oct 31, 2017 4:43:25 PM
OK, who let him out of his room. Geez some parents are just plain irresponsible.

GM did this same thing in 2007 with the Silverado/Sierra classic. The result was sales were pretty much flat with 846,000 in 2006 and 826,000 in 2007.

Another strike against this '2nd place' strategy is GM will be selling a new 2019 Silverado/Sierra accross the street.

I think this is more of a strategy to squeeze every drop out of the current platform than it is to take over 2nd place.
Posted by: Jack | Oct 31, 2017 2:36:51 PM

I agree.

GM has three different truck plants. They slowly converted each plant over to the new platform during this period of time. The GMT900's were quite a totally different from the GMT800's. It's no different from what Ford did in 2014 when they boosted production of the steel F-150's and filled dealer lots to the brim, giving them a stable inventory while they slowly converted their plants over to the aluminum truck.

It works out nice for the customer too. If they don't want to deal with the inevitable headaches any first year model has, they still have an opportunity to buy a brand new old model that has all the bugs worked out.

Well by the looks of the new 2019 Ram they copied the styling of the Silverado....thats a start i guess

With RAM and GM about to launch all new full size platforms in the next year and FORD about to offer a midsize, the real loser will be the F-150. The F-150 will certainly look dated against the new RAM and GM twins plus be cannibalized by its own little sister.

With RAM and GM about to launch all new full size platforms in the next year and FORD about to offer a midsize, the real loser will be the F-150. The F-150 will certainly look dated against the new RAM and GM twins plus be cannibalized by its own little sister.

Oh no sir, quite the contrary. The RAM will be pummeling Chevy. The Ranger introduction at the Detroit Auto Show will suck the air out of the room, leaving GM gasping with their semi new trucks looking like the bricks they are replacing. If the GM midsize do not canabilize the full size brothers, what is your evidence the Ranger would take from F 150?
Waiting for the spin, here it comes 4,3,2,1.....

If the GM midsize do not canabilize the full size brothers, what is your evidence the Ranger would take from F 150?
Waiting for the spin, here it comes 4,3,2,1.....

Posted by: GM Blows Chunks | Oct 31, 2017 9:16:15 PM

You are quite dramatic and theatrical in your commenting, in reality, you would be a fool not to believe the new Ranger would cannibalize F-150 sales. The new competing full size platforms will certainly pressure Ford into offering hugh discounts on the F-150 just to stay relevant. Ford already knows this, why do you think they announced hugh cost saving measures.

Wow, you need to do considerably more research and reading. Have you actually read what the Ford cost saving iniative is about?
I did not see one iota of evidence from you that the Ford experience would differ from the GM. Are you side stepping that the mid size Colorado/Canyon took away sales from full?size?

Ford already knows this, why do you think they announced hugh cost saving measures. Posted by: GMSRGREAT | Oct 31, 2017

@GMSRGREAT

The announcement you refer to was part of the new Ford CEO's comments about their third quarter results. Ford's top brass has a hard time explaining to shareholders why Ford's share price has been stuck in first gear for several years, during a time when share prices at similar companies are going through the roof---GM, Cummins, Caterpillar to name a few.

Cost reductions would be a common promise for corporate managers to promise shareholders following several years of unsuccessful efforts to improve shareholder satisfaction. The new CEO at Ford made his comments only a few months following the release of their previous chief in May this year.

Pretty standard stuff for the Wall Street crowd. Not related to truck pricing in my opinion.

A few GM supporters need to stay on topic. By the way, these GM supporters seem to be the same person using different character names.
We have so many fantastic choices in trucks now, just pick one. Don’t put down others for their decisions. All these trucks can be built to suit individual taste or need.

Pretty standard stuff for the Wall Street crowd. Not related to truck pricing in my opinion.

Posted by: papajim | Oct 31, 2017 10:22:24 PM

Papajim, when you look forward a couple years, it is easy to see how the F-150 will come under pressure from its 2 main competitors and from within from the Ranger. I'm not suggesting that the recent cost saving measures announced by Ford is in response to this, however, you have to believe that planners within the company has been taking the timing of these events into account.

We disagree. Nobody knows what the pricing or the competitive landscape will be like in 2 yrs.

We can agree, however, that manufacturers always want to drive costs down.

Presently the NFL and the big TV networks are having trouble with THEIR costs. Especially ESPN.

You can be sure that Ford and GM will be raising hell with the ad agencies if the networks can't deliver on Sunday afternoon when the games are on. That's the big cost savings I see coming up for pickups--lower advertising and marketing costs.

@papajim, We take what we want! After we take down Silverado, we want the #1 truck, sucka! johnny doe, we coming for you n#gga!

Papajim, when you look forward a couple years, it is easy to see how the F-150 will come under pressure from its 2 main competitors and from within from the Ranger. I'm not suggesting that the recent cost saving measures announced by Ford is in response to this, however, you have to believe that planners within the company has been taking the timing of these events into account.


Posted by: GMSRGREAT | Oct 31, 2017 11:22:54 PM

The F-150 will be under pressure from two truck builders that have enough sense to know that an all-aluminum bed is a terrible idea for guys that want a tough truck that won't rip when being used for work. Ford just updated their entire engine line and it will be quite some time before we see a big change (other than the diesel engine. Ford devotees that really wanted a Ranger and had no choice but to buy an F-150 will now be trading in their full-size for a midsize. The Raptor Jr. will either be weakened or overpriced in order to protect F-150 Raptor sales. If it gets the 2.7 Ecoboost, it will cost at least $50k. If it doesn't get the 2.7EB, it'll get a weak engine at a cheaper price, and the suspension will be a cheaper standard suspension with some entry level Fox Shocks much like the 2nd place TRD Pro.

If you guys want to invest, do not invest in GM, invest in Hersheys! ($104)

That being said, I did not see the new chevy/sierra as being a game changer. I am not particular to one brand, but it appears as Ford and Ram have the nicest trucks right now, but again, until I can see the new GM trucks up close that is all I can really say. Hopefully they are better and have some innovation.

#3 aims for #2. #2 aims for #1. Fiat's goal and plan is doable but there will be issues. The first of everything is at least initially screwed up. Fiat's shift from crappy car manufacturing to decent truck manufacturing wont be without hitches and even more disturbing increases the company's dependence upon a favorable economy and low stable fuel prices. This is a recipe for financial disaster when those 2 factors change. But financial disasters are nothing new to this former member of the big 3.

If you guys want to invest, do not invest in GM... Posted by: crunchtime | Nov 1, 2017

@crunchtime

I have five favorite industrial stocks today:

GM, Ford, Cummins, Caterpillar, and GE All are classic all American firms that build big powerful greasy machines that burn lots of fuel. Old school. Very American.

Of these companies only GE has been any kind of Wall Street darling up till recently. The conditions just were not there. GE won some new friends back when Obama was elected because they headed down the path of Green energy solutions, much like the leadership at Ford chose to do.

GE and Ford have both paid a big price in recent years for trying to play the whole green-tech Silicon Valley game.

Nonetheless, GE and Ford are both very cheap stocks today and you can be sure that with the right leadership they will turn things around.

We disagree. Nobody knows what the pricing or the competitive landscape will be like in 2 yrs.

We can agree, however, that manufacturers always want to drive costs down.

Posted by: papajim | Nov 1, 2017 1:39:34 AM

It is not uncommon for new model redesigned vehicles to have a lower selling price then previous versions as manufactures discover lower cost manufacturing techniques and suppliers. With both RAM and GM offering shiny new vehicles shortly, Ford will will come under pressure on pricing and attempting to stay relevant in this competitive market.

FCA is in a much different position than Ford and GM in that FCA needs additional sales of trucks and vans to pay the bills. GM is in the best financial shape of the 3. FCA has discontinues the Dodge Dart and the Chrysler 200 and Alfa Romeo and Fiat have not been as successful as FCA had promised. Chrysler itself offers 2 models (Chrysler 300 and Pacifica) while Dodge offers 4 which are not enough to justify their existence especially with an aging platform based on Mercedes for the Charger, Challenger, and 300. FCA keeps delaying the redesign of these models which could be that FCA is not going to replace these models and will continue them on the old platform until they no longer sell or cannot be updated which is a similar strategy used by Ford on the Ranger, Crown Victoria, and Grand Marquis. This leaves Ram and Jeep to carry the load.

Ford will will come under pressure on pricing and attempting to stay relevant in this competitive market. Posted by: GMSRGREAT | Nov 1, 2017

@GMSRGREAT

This volley seems like it's shooting at a moving target.

Pricing pressure is a dealer problem. MSRP pricing gives dealers, especially those selling American half ton trucks, to discount significantly and still make a profit.

There is some manufacturer participation in these discounts, but the makers count on their dealers to understand the local markets.

If you are talking about driving costs out of the manufacturing operation, it's a different topic.

Cost control is a daily exercise for all manufacturers. Every day. Regardless of what they make.

Papa/gmsrgreat, both great points, but since Ford has a new vehicle out anyway, it seems that is where the concentration is with customers and marketing. Many of the F150 commercials are about the truck itself. I do not see any good marketing from Gm. They keep replaying those award commercials which do not focus on the truck but the company as a whole. In fact I cannot remember a truck commercial from chevy or sierra that I remember and that is not good. Never the less, I will look at them when its time to go test driving, I just do not really know what to expect as I'm not seeing anything marketed. ( a confused current customer)
-CT

@papajim, We take what we want! After we take down Silverado, we want the #1 truck, sucka! johnny doe, we coming for you n#gga!
Posted by: HEMI V8 RAM | Nov 1, 2017 4:27:26 AM

This.

The way to gain market share is a balanced strategy , but.....

JUST MAKE A GOOD TRUCK.

Ram has done a good job of offering a lot ......

Arguably best styling , certainly most unique.
Best interiors.
Air suspension offered.
Coil spring suspension offered.
Only diesel in half ton offered.
Best bed management system offered.
Only extended "mega" cab offered .

Ram is behind in some KEY areas however:
Payload and actual towing are substantially down
Very heavy relative to competitors.
No telescoping wheel(?!)
Poor crash ratings relative to competitors (oldest truck)
Top engine offering a bit down to competitors.

IF they fix these things and build a QUALITY product they have a shot......BUT , GM has been building some very good products as of late and they are doing quite well (unlike Ford) financially.

@Trucker,FCA actually 3rd quarter profits of $2.1 Billion ! they are in better shape than people think.More profit than Ford !

Ford might be in trouble...There cars dont make a profit,Fusion,Taurus,Focus dont make profits..

FCA sales are down because they are reducing fleets,whereas Toyota,Honda,Hyundai,VW,GM,Ford are increasing their fleet numbers..

300,Charger & Challenger make profits..

They have new products coming for Dodge,Chrysler and as well as Jeep and RAM..

FYI 300,Charger,Challenger are not based on a Mercedes...the LX 2005 -2010 used rear suspension design and seat frames from a Mercedes..The LY 2011-2014 redo the Mercedes components were gone and the Redo of the car in 2015- now have none..

Ford cars are all Euroepan/Volvo and other based..Only Ford is the F series truck as the vans are European.

GM,Camaro,Cadillac are Opels with new sheet metal...

FCA actually 3rd quarter profits of $2.1 Billion ! they are in better shape than people think.More profit than Ford Posted by: Turbo Z | Nov 1, 2017

@turboZ

You left out a major figure!

People who bought FCA stock 12 months ago at $7 per share, now own shares that sell for $17 per share. That blows the doors off of the cap upside for any major industrial stocks I follow!

papa, you own Ford and Fiat stock??

@Turbo Z--I said they still share a Mercedes platform not components. Yes the 300, Challenger, and Charger make a profit as did the Crown Victoria for Ford but their volume has decreased. The market for automobiles especially full size sedans has been declining rapidly. FCA has not confirmed any plans to redesign the 300 and Charger and eventually if they do not then they will most likely not continue. It is hard to justify the existence of the Chrysler brand with just an aging sedan and a minivan which is a new product. The Dodge brand is slightly better. There have been rumors that the Challenger would go through a redesign but nothing about the Charger or 300. When has Dodge had a new product or totally redesigned product? Years. The real value of FCA is Jeep and Ram which have and will have new products. If you took away Jeep and Ram then FCA would probably not have any profits. FCA is making the best decision under the circumstances by continuing production of the Grand Caravan and the older Ram. Both are and will be low price leaders and draw customers to their showrooms. FCA sales are down and FCA needs more sales.

http://www.thetruthaboutcars.com/2017/11/detroits-october-2017-sales-ford-soars-fiat-chrysler-hits-brakes/#more-1598240

own Ford and Fiat stock? Posted by: crunchtime | Nov 1, 2017

@CT

Do you? Pretty nice returns on equity, eh?

Dudlydolittle you are most like right about Ram not takeing number 2 spot From Chevy. But the comment about Ram focusing on quality and features need to apply to Chevy as well. If Chevy dont

My mistake Dudleydorright.



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