FCA broke out the chrome in a big way for its new Ram Laramie Limited, its latest entry in the booming luxury-truck space. Source: Fiat Chrysler Automobiles.
Who won the pickup wars in 2014?
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If you look strictly at year-over-year percentage sales gains, Fiat Chrysler was the undisputed champ. Its Ram pickup line posted a 24% sales increase last year, trouncing both General Motors and Ford .
But both Ford and GM have been trouncing Fiat Chrysler on a more important metric: profitability in North America. That has a lot to do with pickup sales, and a lot to with the kinds of pickups being sold.
That's where FCA has had a disadvantage. Last week, we got a look at how it plans to fight back -- and it involves a whole lot of chrome.
A whole lot of chrome and leather: Meet the Ram Laramie LimitedFCA took the wraps off of its latest Ram pickup variant, the Laramie Limited, at an event in Chicago this past week. It's a new top-of-the-line trim for the Ram that FCA's PR mavens described as "the benchmark in truck opulence."
What makes for an opulence benchmark in pickups? A whole lot of chrome, apparently. The new truck features an all-new grille that does away with the brand's long-standing signature crosshair pattern in favor of a "billet port" design that, well, isn't subtle.
The brightwork continues with chrome bumpers, huge chrome letters spelling out "RAM" on the tailgate, and lots of other splashes of brightwork.
The Ram Laramie Limited's interior features a whole lot of good leather and some unique trim touches. Source: Fiat Chrysler Automobiles.
There's more than chrome, though. Inside, the Laramie Limited features acres of good-quality leather, "Argento" wood trim, special dash accents, and a full complement of fancy lighting and electronics -- along with "Berber" carpets.
Ram brand chief Bob Heglboom said in a statement that the new Laramie Limited trim line "exceeds the high expectations of affluent truck buyers by combining capacity with refinement." It'll be available on the Ram 1500 in the second quarter, and the heavy-duty Ram 2500 and 3500 later in 2015.
Wow. So, why does this exist?
Why this thing exists: Because FCA needs the profitsHere's why this thing exists: First, because people will buy it, and second, because FCA needs to sell more high-end, high-profit trucks.
Why? Because FCA's operating profit margin in North America was just 4% last quarter despite those big gains in pickup sales (and despite big gains for Jeep SUVs, too). That doesn't compare well with Ford's 7.8% or GM's 8.7% -- and CEO Sergio Marchionne isn't happy about that.
The leaders of FCA's "NAFTA" unit are under pressure from the boss to improve those profit margins. Driving down costs will help over time, as will reining in Chrysler's traditional heavy use of incentives, but improving the unit's "mix" -- its ratio of high-profit sales to lower-profit ones -- can have a good effect right away.
The Ram Laramie Limited's tail got a dose of chrome, too. Source: Fiat Chrysler Automobiles.
That's where the Laramie Limited comes in. In recent years, plush versions of full-sized pickup trucks have become America's hottest-selling luxury vehicles. FCA's U.S. dealers already do a pretty good job of selling loaded Rams. TrueCar says the Ram's existing higher-end trims made it the second-biggest-selling vehicle over $50,000 last year. But it was way behind Ford's F-Series, which sold almost three times as many -- about 190,000 last year,TrueCar estimates, roughly a quarter of Ford's total F-Series sales.
Therein lies an opportunity, FCA's marketing mavens seem to have realized. They're probably right.
Luxury trucks have emerged as a surprisingly big and important marketFord essentially created this market with its first King Ranch F-150 in 2001, and it has done a terrific job of capturing these kinds of buyers. It clearly plans to build on that advantage with the King Ranch and Platinum versions of its all-new 2015 F-150, both of which have been selling within just a few days of landing at dealers so far.
GM is also working to do more in this space, with premium trim lines on its Chevy Silverado and GMC Sierra that incorporate the lessons it has learned (very well) with the higher-end versions of its premium SUVs, like the GMC Yukon Denali and Cadillac Escalade.
But FCA's smooth-riding Rams have already carved out a good presence in the luxury-pickup space. The new Laramie Limited might look like a lot of bling to those whose tastes run in different directions, but it's a safe bet that FCA's pickup experts know their buyers -- and that the chrome-bedecked Laramie Limiteds will draw quite a few happy, well-heeled customers.
The article Fiat Chrysler's Latest Move to Chase Ford's F-150: Luxury Trucks originally appeared on Fool.com.
John Rosevear owns shares of Ford and General Motors. The Motley Fool recommends Ford and General Motors. The Motley Fool owns shares of Ford. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.
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