Does a Ram Dakota Midsize Pickup Make Sense?
Or will the Jeep Scrambler fill the niche?
A new Ford Ranger is on the way back to the U.S. market, where Chevrolet and GMC sold a combined 145,102 Colorados and Canyons last year, and still didn't manage to catch the Toyota Tacoma's 198,124, number-one in the segment. Even Nissan sold 74,360 of its ancient Frontiers in 2017, so there's obviously some life in a segment consisting of pickup trucks that are only as large as the Ford F-150s, Chevy Silverados, and Ram 1500s of three or four generations ago.
The question then, is whether Fiat Chrysler is interested.
I had figured Sergio Marchionne had put this issue to rest when he answered former Automobile contributor David Kiley's question at the CEO's North American International Auto Show press conference last January thusly:
"We did not think it was necessary to re-enter that market after our last experience. It wasn't even a similar experience (to Ford and GM), we took our Dakota out of production in … 2010 … . Which had a cost structure very similar to our Ram 1500. We have not found an economic way to get this done."
But Marchionne left the door open for a Ford Ranger/Chevy Colorado competitor, another Fiat Chrysler executive told one of my colleagues at the Detroit show. I asked Ram truck division chief Jim Morrison for clarification at the Chicago Auto Show in February, and he could only cite the standard "no comment" on future product. If he couldn't deny it, let alone confirm it, does that mean a Ram Dakota is potential future product?
The door that Marchionne allegedly left open had nothing to do with his response to Kiley's question. At his NAIAS presser, Marchionne also spoke about—separately—Fiat Chrysler's plans to move assembly of the next-generation Ram heavy duty pickup trucks back to Warren, Michigan in two years, from Saltillo, Mexico, where the big rigs have been produced since the late '00s. Fiat Chrysler says it is spending about $1 billion to retool the Michigan plant, and the announcement coming shortly after President Trump signed the GOP's 2018 tax reform bill was seen as a feather in the cap of one of the White House's biggest legislative victories.
Fiat Chrysler is looking to replace the Ram HD in Saltillo with another truck product, specifically, a smaller commercial vehicle appropriate for the European market. That means it's likely to have a Fiat-based chassis. It could be a new, midsize pickup truck, but commercial delivery vehicles in Europe tend to be small vans rather than pickup trucks. In other words, the Ram ProMaster City, which is based on the aging Fiat Doblo.
Like the Ford Transit Connect, which comes from Turkey, the Ram ProMaster City is shipped from overseas as a passenger van with windows. Once in North America, both the Ford and the Ram are refitted with panels in place of the rear windows, except for those sold here as compact family passenger vans.
If Fiat Chrysler moves ProMaster City assembly to the Ram HD plant, and if President Trump does not tear up the North American Free Trade Agreement ahead of that, Ram will be able to import panel van versions across the border to the north without paying the 25-percent "Chicken Tax" on each unit. The Saltillo plant could become the source of Ram ProMaster Citys/Fiat Doblos for various markets around the world. [The Ram and Fiat vans also are assembled in Turkey, and there's a plant just for the Doblo, in Brazil.]
No matter what Fiat Chrysler ends up building in place of the Ram HD in Saltillo, it makes great economic sense to move the big, high profit margin model back to the U.S., where that margin can easily eat the higher labor costs.
I think Fiat Chrysler management, including Marchionne, who retires as CEO by the end of this year (though he'll remain Ferrari CEO) is keeping the door open in case Ford's re-entry into the segment becomes a thing. The question then is whether midsize pickup trucks have a finite demand, and whether Toyota, Chevy/GMC, Nissan, Honda, and Ford combined will eat up all the possible demand, or whether there's enough growth in the segment to accommodate a Ram Dakota.
Estimated demand for a new Ram Dakota probably would have to be at least a low six-figure number for Fiat Chrysler to devote retooling to such a truck instead of spending it on more Jeep or big Ram production.
In the current market, midsize pickups including the unibody Honda Ridgeline are "lifestyle vehicles," and Fiat Chrysler already has one in the works, the JL Jeep Scrambler expected within a year. Considering the wild success of the Jeep brand in recent years, the Jeep pickup is all the lifestyle Fiat Chrysler needs.
Of course, big pickup trucks, especially GMC Sierra Denalis and Ford Raptors are "lifestyle" vehicles, too, though they typically sticker for at least twice the price of the $30,000 midsize trucks that attract first-time buyers. The all-new 2019 Ram 1500 will offer plenty of competition in this sub-segment with well-equipped, high trim-level variants.
Bottom line on the possibility of a new Ram Dakota (or midsize truck of any name) is that until and unless there's an oil shock and/or gas and diesel prices climb significantly and permanently, I'd bet you can depend on Marchionne's answer to Kiley's question at his NAIAS press conference in January.
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