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AUBURN HILLS: Fiat Chrysler Au­to­mo­biles’ new CEO is tired of be­ing No.3 in US pickup truck sales. 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, 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 per cent tar­iff on Mex­i­can-made pickup trucks ear­lier this year, Fiat Chrysler Au­to­mo­biles (FCA) said Saltillo would be “re­pur­posed to pro­duce fu­ture com­mer­cial ve­hi­cles.”

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

Now, the United States, Mex­ico and Canada have a ten­ta­tive trade agree­ment that im­poses no ceil­ing on ship­ments of pick­ups to the United States from Mex­ico, pro­vided they meet thresh­olds for the share of parts pro­duced within the re­gion.

“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,” 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 per cent 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 per cent share of US re­tail truck sales, fol­lowed closely by GM at 34.2 per cent and FCA with 22.3 per cent.

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.

Fiat Chrysler, which re­ports third-quar­ter re­sults on Tues­day, took a dif­fer­ent tack with the new Ram. The au­tomaker stuffed more fea­tures into the ve­hi­cle — in­clud­ing an op­tional 12-inch touch screen and par­tial elec­tri­fi­ca­tion that saves fuel and helps with ac­cel­er­a­tion and cruise con­trol - on a bet that cus­tomers would pay more in re­turn.

So far, the gam­ble ap­pears to be pay­ing off. The new Ram 1500’s av­er­age sale price for the year to date through late Oc­to­ber hit $46,856, - higher than the $42,389 av­er­age for the Ford F-150, ac­cord­ing to in­dus­try data.


Hay­den El­der, owner of El­der Chrysler Dodge Jeep Ram in Athens, Texas, said three times in un­der a month he has had fam­i­lies trade in nearly-new large SUVS made by FCA’S ri­vals for a new Ram 1500. “This new Ram is the big­gest leap I’ve ever seen from one ver­sion to an­other,” El­der said. About 70 per cent of the 800 ve­hi­cles he sells an­nu­ally are trucks. 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.

The de­ci­sion to of­fer a larger dash­board screen than its ri­vals have came late in the de­sign process. Ini­tially, the big screen was of­fered in the top three of the truck’s six ver­sions. Fiat Chrysler has since de­cided to of­fer it on an ad­di­tional ver­sion.

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.

Fiat Chrysler had prob­lems ear­lier this year ac­cel­er­at­ing pro­duc­tion of the new Ram truck on a highly-au­to­mated pro­duc­tion line in­stalled at a Detroit-area plant that pre­vi­ously made slow-sell­ing sedans.

Among the prob­lems: Dropped bolts and other de­bris would shut down au­to­mated ve­hi­cles that car­ried truck frames through part of the as­sem­bly process. The so­lu­tion was to put de­bris-sweep­ing skirts on the car­ri­ers, FCA ex­ec­u­tives said on a re­cent tour of the plant.

Now, the Ster­ling Heights As­sem­bly Plant is crank­ing out around 65 trucks an hour, 20 hours a day, six days a week - a pace of about 400,000 ve­hi­cles per year. “It is ca­pa­ble, if we wanted to, to push it up more from there,” Man­ley told Reuters. “Clearly, hav­ing the ca­pac­ity to ful­fil our am­bi­tions is im­por­tant.”

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