Daily Management Review

FCA Thinking About Mexico For Its Ram Pickups To Rival Ford And GM Trucks


Fiat Chrysler Automobiles hopes to trigger a sustained demand for its revamped Ram 1500 full-size trucks after the addition of a number of features. The auto maker said that such features on the truck would include placement of a 12-inch touch screens on the dashboard and arming the truck with large packs of batteries and electric motors so hat drivers are able to adjust speed and gears and save on fuel.
This decision has also reportedly forced the company’s CEO Mike Manley to reconsider the announced decision of stopping production of the vehicles at its factory in Saltillo, Mexico. This decision was announced by the company in January this year. The company plans to make use of its another plant in Warren, Michigan, US, together with its Mexican factory, to manufacture other Ram models as well as create enough capacity for the production of more truck as the company plans to compete with Ford Motor Co.'s F series and General Motors' Chevrolet Silverado.
"We need to get ourselves into second" place, Manley told the Reuters in an exclusive interview. "Frankly, I don't care which of the two I take share from."
Fiat Chrysler had said that said Saltillo would be "repurposed to produce future commercial vehicles" even at the time when threats of imposing a 25 percent tariff on Mexican-made pickup trucks were being issued by US President Donald Trump earlier this year.
The possibility of the company shifting the production of its heavy-duty pickup trucks to Saltillo had been raised in 2017 by Marchionne. The decision would have been influenced by U.S. tax and trade policy, the company had said.
But now the scenario has changed because there is no more any restriction or ceiling on the export of pickups top the US from Mexico as the two countries – together with Canada, now are party to a tentative trade agreement. However, the Mexican made vehicles would have to conform to the requirements of sourcing of parts for the pickups.
"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 North American business of the automaker is signified by the Ram and Jeep brands. This region accounted for almost 85 per cent of the pre tax profits of the company in the second quarter which helped the company to offset some of the slackness in its business in Europe and in China.
According to industry data, pickups account for the single biggest portion of the profits of the three Detroit based global automotive companies and therefore every company is eyeing a greater share of the market.