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Fiat Chrysler reconsiders Mexico for making more Ram trucks

With a plan to load up its renovated Ram 1500 full-size trucks with new features – varying from 12-inch touch screens on the dashboard to large battery packs and electric motors to support adjusting speed and gears and conserve fuel – the automaker is banking on a sustained rise in demand.

So Chief Executive Mike Manley is now think again about a decision announced in January to stop building Ram heavy-duty pickups at a plant located in Saltillo, Mexico. That plant, and another in Warren, Michigan, between them would produce other Ram models and free up manufacturing space to make even more new trucks beat sales of Ford Motor’s F-Series or General Motors’s Chevrolet Silverado, and its higher-end GMC Sierra.

The CEO no longer wants the automaker to be No.3 automaker. “We need to get ourselves into second” place, Manley told Reuters exclusively in his first interview since taking over the No. 7 global automaker following the sudden death of Sergio Marchionne. “Frankly, I don’t care which of the two I take share from.”

When American President Donald Trump was threatening action that would have added a 25 percent tariff on Mexican-made pickup trucks previously this year, Fiat Chrysler stated Saltillo would be “repurposed to produce future commercial vehicles.”

In last year, Marchionne had raised the potential his company could move heavy-duty pickup production out of Saltillo, stating U.S. tax and trade policy would impact the decision.

Now, the United States, Mexico and Canada have a tentative trade agreement that enforces no ceiling on shipments of pickups to the United States from Mexico, provided they fulfill 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 boost output next year if it’s required,” Manley stated.

“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 included.

The Ram and Jeep brands underpin the automaker’s North American business – which represented almost 85 percent of Fiat Chrysler’s second-quarter pre-tax profit – and offset the hard times of its legacy Fiat business in Europe and operations in China.

Ford’s F-Series trucks have led the sector for four decades. In last year, Ford had a 35.6 percent share of U.S. retail truck sales, followed by General Motors at 34.2 percent and FCA with 22.3 percent.

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