Take My Pickup -- Please!

By Bill Visnic February 22, 2011

Take My Pickup Truck Please.jpg

It took the Chrysler Group LLC about an hour to respond at the recent Chicago auto show, where Hyundai Motor America president and CEO John Krafcik publicly declared there’s a price war going down. Chrysler’s answer took an intriguing direction: the launch of the Tradesman, a new variant of the Ram fullsize pickup, stuffed with the company’s Hemi V8 but priced barely more than a well-equipped compact car. It quickly followed up the Tradesman’s unexpectedly positive Chicago-show buzz by announcing a similarly-priced companion Ram model, tentatively named Adventurer and targeted at first-time buyers.

It’s a provocative play for Chrysler on several consumer levels, but the root strategy is nothing more complicated than a grab for market share – it’s an incentive without having to call it such. A strategy to parry a recent heavy hike in incentives by General Motors Co. and expanding spiffs Toyota Motor Sales USA has warned it won’t be afraid to deploy, either.

Industry captains like Krafcik fear the two giants won’t be able to help themselves, a couple of sloppy drunks with flush pockets that aren’t able to stay out of the incentives saloon. Chrysler, bereft of fresh product during its restructuring had no choice but to resort to scandalous incentives; now, it would like to keep some hard-won margins and maybe carefully score some new market share – all without having to take up arms in the nascent price war.

How else to view the new duo of Ram Adventurer and Tradesman that respectively go out the door for less than $24,000 and $23,000 with the 390-horsepower Hemi, automatic transmission, air conditioning and no shortage of other standard equipment? In the Hemi’s mid-2000’s heyday, it commanded thousands as the centerpiece of pricey option packages – and now Chrysler’s giving it up in a $23,000 pickup?

Fact is, Chrysler’s not really giving away much of anything. The new Ram models include some minor extra content, but according to Edmunds.com’s proprietary True Market Value pricing metric, customers already could buy similarly-equipped Rams – Hemi and all – for money comparable to the ballyhooed Tradesman and Adventurer prices that are causing such a ruckus.

It’s a gambit worthy of a full season of Mad Men, fabricating excitement for an aggressive price that effectively was already there.

Chrysler surely would like to sell more Rams. It surely would like to sell more Hemis. But it surely would prefer to stay in the rear areas if the industry’s deep-pocket players truly are gearing up for an incentive war – and Chrysler’s marketers have, for now, conjured a wily tactic to do just that.

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fulcrumb says: 12:11 PM, 02.26.11

This is a better way to market. Creating model variants with high levels of standard equipment and limited additional options brings focus to the line more effectively than rebates.
The dealer can order dozens more simply and without concern for when the consumer spiffs are going to change or end.

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