Fiat Chrysler Automobiles’ surging Ram truck brand had a monster month in June, carrying the Italian American carmaker to a surprise total sales gain in a shrinking market.
Ram’s pickup model deliveries soared 56% to 68,098 units, approaching the level of monthly sales typically reached only by Ford Motor Co.’s F-Series, the top-selling vehicle line in America for almost four decades. Ram powered a 1.9% increase in total deliveries for Fiat Chrysler, the only major automaker to boost sales and beat estimates.
Toyota Motor Corp., Honda Motor Co. and Nissan Motor Co. reported steeper sales declines for June than analysts estimated in a Bloomberg News survey.
Ram’s standout June puts the truck further ahead of General Motors Co.’s Chevrolet Silverado, which has long been the No. 2 model line in the highly lucrative full-size pickup segment. Trucks have become even more crucial to Fiat Chrysler, GM and Ford as consumers thumb their noses at passenger cars, taking wind out of the broader U.S. auto market’s sails.
The industry is headed for the second annual sales decline in three years.
“This truck is getting the attention of all brands’ previous pickup owners,” said Cass Burch, who owns two Chrysler-Dodge-Jeep-Ram dealerships in south Georgia. “It’s the very best pickup truck we’ve ever had for sale.”
Ram’s June sales were only about 3,400 units behind the roughly 71,500 pickup deliveries that Ford averaged per month in the first quarter of the year. Ford will report second-quarter results on Wednesday. GM said its quarterly deliveries dropped 1.5% as the Detroit-based automaker slowly ramps up production of redesigned Silverado and GMC Sierra pickups.
The story behind the Ram pickup’s emergence is more than just 12-inch touch screens and fancier leather seats. Fiat Chrysler has been flooring it with a two-pronged approach to winning market share. First, it’s continuing to manufacture the cheaper Ram Classic — a bare-bones version of its truck built on an older platform — through at least the end of this year, in tandem with the 2019 model year pickups decked out with higher-tech touches.
And Fiat Chrysler has been heaping healthy discounts on both models. It switched from offering a fixed rebate amount to a percentage discount off sticker prices in June, Burch said.
“You have a discounted Ram Classic and a very competitive Ram,” said Jeff Schuster, senior vice president of forecasting for LMC Automotive. “I anticipated a big month, but not this big.”
Poaching truck buyers with big incentives is a down payment on future sales, and the hefty profit margins on pickups give automakers more room to offer substantial deals.
Japan’s Toyota, Honda and Nissan barely compete in the pickup battle dominated by Detroit. But while they pack plenty of punch in SUV segments, top models like the Toyota RAV4 and new entries such as Honda’s Passport were unable to offset slumping sedan sales in June. Total deliveries fell 3.5% for Toyota and 7.3% for Honda.
Nissan, on the other hand, posted gains with its most affordable cars — the Versa and Sentra were up 15% and 3.2% — but SUVs including the Rogue and Murano are aging, and the company has been trying to rein in incentives. Total sales fell 15% last month.
“We’re focused on aligning supply to demand and having healthy inventory,” Billy Hayes, division vice president of Nissan sales in the U.S., said by phone.