Ram Redesign Improves Fiat Chrysler's Shot at Luxury Prices
(Bloomberg) -- If you hadn’t noticed, Ford, Chevy and Ram pickups are now priced a lot more like luxury cars.
They still have to work, and the people who buy them obsess over towing, payload and durability to make sure they get their money’s worth. But a growing number of trucks also feature the kinds of comfort, safety and connectivity features traditionally seen on premium sedans.
Take, for instance, the new Ram 1500 that Fiat Chrysler Automobiles NV rolled out Monday at the Detroit auto show. While pricing hasn’t yet been released, an improvement in materials, interior design and capability should help the Italian-American automaker further boost price tags that have already climbed almost 70 percent since 2002, data from Edmunds show.
Though Ford Motor Co. scored some attention last year with a $100,000 F-Series, investors and shoppers shouldn’t sleep on the new Ram. Its high-end touches -- from the next-generation of SiriusXM radio to the ability to parallel park itself -- will give Fiat Chrysler new ammunition to battle its Detroit rivals for a bigger share of the lucrative full-size pickup segment.
“It represents a true opportunity to have a luxury truck that can still work for you,” Ram brand chief Mike Manley told reporters in Detroit Monday.
The stakes are high. The big three automakers sell more than 2 million large pickups a year in the U.S., generating annual revenue of more than $90 billion. Morningstar Inc. estimates that profits are at least $10,000 per truck -- and even more for high-end models -- compared with about $3,000 for passenger cars. That’s why the three companies invest so much to develop their pickups, and fight hard for every sale.
And the new Ram 1500 is putting up a fight. It has a 12-inch touch screen and the most powerful audio system available in a pickup, including 19 premium speakers. It also sports more than 100 safety and security features, including blind-spot monitors that adjust for use of a trailer.
The truck is also about 225 pounds lighter than the previous model, even though it’s longer and wider, thanks in large part to its frame made of advanced, high-strength steel. Fuel economy won’t be announced until closer to the on-sale date, but mileage should improve at least 10 percent, Manley said, thanks to a new eight-speed automatic transmission and a 48-volt, mild-hybrid system to support a Pentastar V-6 or Hemi V-8 engine.
Ram has managed to grow in the U.S. even with one of the oldest full-size pickups on the market, with sales up 40 percent since 2007, according to Autodata Corp. And the newest model will only further fuel sales growth, Manley said in an interview.
“We have an opportunity to continue some of the gains we made with the current truck,” he said.
Optimism that the redesigned Ram 1500 and a refreshed Jeep lineup could reverse the company’s 16-month negative U.S. sales trend has helped boost the automaker’s shares. Fiat Chrysler’s U.S.-listed stock has surged 31 percent already this year after almost doubling in 2017.
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